SEMI-ANNUAL
REPORT
SEPTEMBER 30, 1995
U.S. Government
SECURITIES FUND
Treasury Total
RETURN FUND
Utility
FUND
Equity
FUND
Midwest Group of Funds(R)
===============================================================================
MIDWEST STRATEGIC TRUST
312 Walnut St., 21st Floor
Cincinnati, Ohio 45202-3874
Nationwide (Toll Free) 800-543-8721
Cincinnati 629-2000
Rate Line 579-0999
Shareholder Services
Nationwide (Toll Free) 800-543-0407
Cincinnati 629-2050
BOARD OF TRUSTEES
Robert Betagole
Dale P. Brown
Margaret S. Hansson
H. Jerome Lerner
Robert H. Leshner
Richard A. Lipsey
Donald J. Rahilly
Fred A. Rappoport
Robert B. Sumerel
OFFICERS
Robert H. Leshner, President
John F. Splain, Secretary
Mark J. Seger, Treasurer
UNDERWRITER
MIDWEST GROUP FINANCIAL SERVICES, INC.
312 Walnut St., 21st Floor
Cincinnati, Ohio 45202-3874
TRANSFER AGENT
MGF SERVICE CORP.
P.O. Box 5354
Cincinnati, Ohio 45201-5354
This report is authorized for distribution only when it is accompanied
or preceded by a current prospectus of Midwest Strategic Trust.
11/95
LETTER FROM THE PRESIDENT
================================================================================
Dear Fellow Shareholders:
We are pleased to provide the unaudited semi-annual report for the U.S.
Government Securities Fund, Treasury Total Return Fund, Utility Fund and Equity
Fund for the six months ended September 30, 1995.
Overall, the economy has expanded at a manageable rate, and inflationary
pressures have been minimal. In July, the Federal Reserve Board eased its
monetary policy and cut short-term interest rates by .25%. This drop helped to
stimulate consumer spending and enhance corporate profitability.
Both the equity and bond markets continued to perform well over the past nine
months, as evidenced by the record highs of the Dow Jones Industrial Average.
During this same period, the Standard and Poor's (S&P) 500 Index was up 29.73%.
This bullish stock market was bolstered by second and third quarter corporate
earnings reports which remained strong.
Utility stocks have also performed well all year, as denoted by the S&P Utility
Index, and we anticipate that they will continue to do so. Low interest rates
along with mergers and consolidations in the industry have enabled companies to
cut costs, capture market share and improve earnings.
The U.S. Government Securities Fund seeks high current income, consistent with
the protection of capital, by investing primarily in mortgage-backed securities
which are issued or guaranteed as to principal and interest by the U.S.
Government, its agencies or instrumentalities. For the nine months ended
September 30, 1995, the Fund's total return (excluding the impact of sales
loads) was 11.32%.
The Treasury Total Return Fund seeks the highest level of total return over the
long term, consistent with the protection of capital, by investing primarily in
direct obligations of the United States Treasury. For the nine months ended
September 30, 1995, the Fund's total return (excluding the impact of sales
loads) was 3.67%.
The Utility Fund seeks a high level of current income by investing primarily in
securities of public utilities. Capital appreciation is a secondary objective.
For the nine months ended September 30, 1995, the Fund's total returns
(excluding the impact of sales loads) were 15.01% and 14.32% for Class A shares
and Class C shares, respectively.
The Equity Fund seeks long-term capital appreciation by investing primarily in
common stocks that offer growth potential. For the nine months ended September
30, 1995, the Fund's total returns (excluding the impact of sales loads) were
22.72% and 21.97% for Class A shares and Class C shares, respectively.
Looking forward, the rate of corporate earnings growth is likely to decelerate
in 1996 for several reasons: the economy itself is slowing, corporations have
little pricing power, consumer spending is fading and the business cycle is
nearing completion. Legislative action on budgetary and tax reform issues may
have a greater impact on market direction than corporate earnings, economic
growth or interest rate movements. The Funds continue to be positioned well for
the current market environment.
Sincerely,
Robert H. Leshner
President
<TABLE>
<CAPTION>
STATEMENTS OF ASSETS AND LIABILITIES
September 30, 1995 (Unaudited)
=======================================================================================================================
U.S. TREASURY
GOVERNMENT TOTAL
SECURITIES RETURN
FUND FUND
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
ASSETS
Investments in securities:
At acquisition cost.................................................... $ 29,060,069 $ 16,970,781
=============== ===============
At amortized cost...................................................... $ 29,053,816 $ 16,997,147
=============== ===============
At value (Note 1)...................................................... $ 29,313,732 $ 17,019,061
Investments in repurchase agreements (Note 1)............................. 680,000 4,878,000
Cash ..................................................................... 343 886
Receivable for capital shares sold........................................ 3,236 681
Interest receivable....................................................... 284,526 171,250
--------------- ---------------
TOTAL ASSETS........................................................... 30,281,837 22,069,878
--------------- --------------
LIABILITIES
Payable for securities purchased.......................................... 3,019,469 --
Payable for capital shares redeemed....................................... 65,819 113,991
Dividends payable......................................................... 20,529 6,744
Payable to affiliates (Note 3)............................................ 18,281 18,807
Other accrued expenses and liabilities.................................... 6,529 4,250
--------------- ---------------
TOTAL LIABILITIES...................................................... 3,130,627 143,792
--------------- ---------------
NET ASSETS ............................................................... $ 27,151,210 $ 21,926,086
=============== ===============
Net assets consist of:
Capital shares............................................................ $ 31,082,811 $ 23,982,941
Accumulated net realized losses from security transactions................ (4,191,517) (2,078,769)
Net unrealized appreciation on investments................................ 259,916 21,914
--------------- ---------------
Net assets................................................................ $ 27,151,210 $ 21,926,086
=============== ===============
Shares of beneficial interest outstanding (unlimited number
of shares authorized, no par value) (Note 4)........................... 2,848,915 2,619,751
=============== ===============
Net asset value and redemption price per share (Note 1)................... $ 9.53 $ 8.37
=============== ===============
Maximum offering price per share (Note 1)................................. $ 9.72 $ 8.72
=============== ===============
<FN>
See accompanying notes to financial statements.
</FN>
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
STATEMENTS OF ASSETS AND LIABILITIES
September 30, 1995 (Unaudited)
=======================================================================================================================
UTILITY EQUITY
FUND FUND
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
ASSETS
Investments in securities:
At acquisition cost.................................................... $ 38,566,444 $ 5,575,505
=============== ===============
At amortized cost...................................................... $ 38,540,179 $ 5,575,505
=============== ===============
At value (Note 1)...................................................... $ 42,460,855 $ 6,481,500
Investments in repurchase agreements (Note 1)............................. 136,000 766,000
Cash ..................................................................... 748 646
Receivable for capital shares sold ....................................... 49,868 1,117
Dividends and interest receivable......................................... 268,663 7,395
--------------- ---------------
TOTAL ASSETS........................................................... 42,916,134 7,256,658
--------------- ---------------
LIABILITIES
Payable for capital shares redeemed....................................... 107,943 11,182
Dividends payable......................................................... 48,908 680
Payable to affiliates (Note 3)............................................ 34,114 3,937
Other accrued expenses and liabilities ................................... 4,860 2,895
--------------- ---------------
TOTAL LIABILITIES...................................................... 195,825 18,694
--------------- ---------------
NET ASSETS ............................................................... $ 42,720,309 $ 7,237,964
--------------- ---------------
Net assets consist of:
Capital shares ........................................................... $ 39,333,309 $ 6,679,110
Accumulated net realized losses from security transactions................ (533,676) (347,420)
Accumulated undistributed net investment income........................... -- 279
Net unrealized appreciation on investments ............................... 3,920,676 905,995
--------------- ---------------
Net assets ............................................................... $ 42,720,309 $ 7,237,964
=============== ===============
PRICING OF CLASS A SHARES
Net assets attributable to Class A shares ................................ $ 38,923,552 $ 5,086,069
=============== ===============
Shares of beneficial interest outstanding (unlimited number
of shares authorized, no par value) (Note 4)........................... 3,384,835 454,315
=============== ===============
Net asset value and redemption price per share (Note 1)................... $ 11.50 $ 11.20
=============== ===============
Maximum offering price per share (Note 1)................................. $ 11.98 $ 11.67
=============== ===============
PRICING OF CLASS C SHARES
Net assets attributable to Class C shares ................................ $ 3,796,757 $ 2,151,895
=============== ===============
Shares of beneficial interest outstanding (unlimited number
of shares authorized, no par value) (Note 4)........................... 330,579 191,936
=============== ===============
Net asset value, offering price and redemption price per share (Note 1)... $ 11.49 $ 11.21
=============== ===============
<FN>
See accompanying notes to financial statements.
</FN>
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
STATEMENTS OF OPERATIONS
For the Six Months Ended September 30, 1995 (Unaudited)
===================================================================================================================
U.S. TREASURY
GOVERNMENT TOTAL
SECURITIES RETURN
FUND FUND
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
INVESTMENT INCOME
Interest............................................................... $ 962,438 $ 736,560
--------------- ---------------
EXPENSES
Investment advisory fees (Note 3)...................................... 98,677 90,843
Accounting services fees (Note 3)...................................... 20,250 17,250
Transfer agent fees (Note 3)........................................... 12,920 21,609
Postage and supplies................................................... 7,281 14,491
Professional fees...................................................... 7,265 5,165
Registration fees...................................................... 4,770 4,434
Custodian fees......................................................... 4,702 3,440
Trustees' fees and expenses............................................ 2,845 2,845
Insurance expense...................................................... 2,438 1,911
Distribution expenses (Note 3)......................................... 2,124 2,012
Reports to shareholders................................................ 1,540 2,553
Other expenses......................................................... 2,072 1,359
--------------- ---------------
TOTAL EXPENSES....................................................... 166,884 167,912
Fees waived by the Adviser (Note 3).................................... (9,000) (16,500)
--------------- ---------------
NET EXPENSES......................................................... 157,884 151,412
--------------- ---------------
NET INVESTMENT INCOME .................................................... 804,554 585,148
--------------- ---------------
REALIZED AND UNREALIZED GAINS (LOSSES) ON INVESTMENTS
Net realized gains from security transactions.......................... 1,018,448 12,178
Net change in unrealized appreciation/depreciation on investments...... (146,328) 5,171
--------------- ---------------
NET REALIZED AND UNREALIZED GAINS ON INVESTMENTS ......................... 872,120 17,349
--------------- ---------------
NET INCREASE IN NET ASSETS FROM OPERATIONS ............................... $ 1,676,674 $ 602,497
=============== ===============
<FN>
See accompanying notes to financial statements.
</FN>
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
STATEMENTS OF OPERATIONS
For the Six Months Ended September 30, 1995 (Unaudited)
====================================================================================================================
UTILITY EQUITY
FUND FUND
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
INVESTMENT INCOME
Interest .............................................................. $ 293,738 $ 37,318
Dividends ............................................................. 914,024 56,627
--------------- ---------------
TOTAL INVESTMENT INCOME ............................................. 1,207,762 93,945
--------------- ---------------
EXPENSES
Investment advisory fees (Note 3) ..................................... 160,772 24,756
Accounting services fees (Note 3) ..................................... 24,000 24,000
Transfer agent fees, Class A (Note 3).................................. 21,856 6,000
Transfer agent fees, Class C (Note 3).................................. 6,000 6,000
Distribution expenses, Class A (Note 3) ............................... 20,588 470
Distribution expenses, Class C (Note 3) .................................. 9,774 2,622
Postage and supplies................................................... 12,108 3,823
Registration fees, Common ............................................. 2,754 1,804
Registration fees, Class A ............................................ 2,081 1,639
Registration fees, Class C ............................................ 1,579 1,409
Professional fees ..................................................... 5,346 3,746
Custodian fees ........................................................ 3,365 3,125
Trustees' fees and expenses ........................................... 2,845 2,845
Reports to shareholders ............................................... 3,353 584
Insurance expense ..................................................... 2,899 593
Other expenses ........................................................ 1,906 564
--------------- ---------------
TOTAL EXPENSES ...................................................... 281,226 83,980
Fees waived and expenses reimbursed by the Adviser (Note 3)............ -- (35,195)
--------------- ---------------
NET EXPENSES ........................................................ 281,226 48,785
--------------- ---------------
NET INVESTMENT INCOME .................................................... 926,536 45,160
--------------- ---------------
REALIZED AND UNREALIZED GAINS (LOSSES) ON INVESTMENTS
Net realized gains (losses) from security transactions ................ (164,702) 211,231
Net change in unrealized appreciation/depreciation on investments...... 4,156,393 644,394
--------------- ---------------
NET REALIZED AND UNREALIZED GAINS ON INVESTMENTS ......................... 3,991,691 855,625
--------------- ---------------
NET INCREASE IN NET ASSETS FROM OPERATIONS .............................. $ 4,918,227 $ 900,785
=============== ===============
<FN>
See accompanying notes to financial statements.
</FN>
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
STATEMENTS OF CHANGES IN NET
ASSETS For the Periods Ended September 30, 1995 and March 31, 1995
=====================================================================================================================
U.S. GOVERNMENT TREASURY TOTAL
SECURITIES FUND RETURN FUND
- ---------------------------------------------------------------------------------------------------------------------
Six Months Year Six Months Year
Ended Ended Ended Ended
Sept. 30,1995 March 31, Sept. 30, 1995 March 31,
(Unaudited) 1995 (Unaudited) 1995
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
FROM OPERATIONS:
Net investment income........................ $ 804,554 $ 2,181,908 $ 585,148 $ 1,408,592
Net realized gains (losses) from
security transactions ..................... 1,018,448 (5,097,610) 12,178 (1,660,245)
Net change in unrealized appreciation/
depreciation on investments................ (146,328) 2,526,800 5,171 (348,543)
------------ ------------- ------------- ------------
Net increase (decrease) in net assets
from operations ............................. 1,676,674 (388,902) 602,497 (600,196)
------------ ------------- ------------- ------------
DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income................... (804,554) (2,181,908) (585,148) (1,408,592)
From net realized gains from
security transactions ..................... -- (128,416) -- --
------------ ------------- ------------- ------------
Decrease in net assets from
distributions to shareholders ............... (804,554) (2,310,324) (585,148) (1,408,592)
------------ ------------- ------------- ------------
FROM CAPITAL SHARE TRANSACTIONS (Note 4):
Proceeds from shares sold.................... 2,902,842 4,299,872 214,013 3,955,275
Net asset value of shares issued in reinvestment
of distributions to shareholders........... 638,161 1,876,091 509,771 1,234,357
Payments for shares redeemed................. (3,436,388) (17,781,225) (4,788,805) (9,480,316)
------------ ------------- ------------- ------------
Net increase (decrease) in net assets from capital
share transactions........................... 104,615 (11,605,262) (4,065,021) (4,290,684)
------------ ------------- ------------- ------------
TOTAL INCREASE (DECREASE) IN NET ASSETS ........ 976,735 (14,304,488) (4,047,672) (6,299,472)
NET ASSETS:
Beginning of period.......................... 26,174,475 40,478,963 25,973,758 32,273,230
------------ ------------- ------------- ------------
End of period................................ $ 27,151,210 $ 26,174,475 $ 21,926,086 $ 25,973,758
============ ============= ============= ============
ACCUMULATED UNDISTRIBUTED NET
INVESTMENT INCOME ........................... $ -- $ -- $ -- $ --
============ ============= ============= ============
<FN>
See accompanying notes to financial statements.
</FN>
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
STATEMENTS OF CHANGES IN NET ASSETS
For the Periods Ended September 30, 1995 and March 31, 1995
======================================================================================================================
UTILITY EQUITY
FUND FUND
- ----------------------------------------------------------------------------------------------------------------------
Six Months Year Six Months Year
Ended Ended Ended Ended
Sept. 30, 1995 March 31, Sept. 30, 1995 March 31,
(Unaudited) 1995 (Unaudited) 1995
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
FROM OPERATIONS:
Net investment income........................ $ 926,536 $ 1,748,651 $ 45,160 $ 88,431
Net realized gains (losses)
from security transactions................. (164,702) (330,519) 211,231 (558,651)
Net change in unrealized appreciation/
depreciation on investments................ 4,156,393 91,379 644,393 983,919
------------ ------------- ------------- ------------
Net increase in net assets from operations...... 4,918,227 1,509,511 900,784 513,699
------------ ------------- ------------- ------------
DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income, Class A.......... (859,431) (1,651,628) (37,006) (64,588)
From net investment income, Class C.......... (67,105) (97,023) (7,875) (25,618)
------------ ------------- ------------- ------------
Decrease in net assets from distributions
to shareholders.............................. (926,536) (1,748,651) (44,881) (90,206)
------------ ------------- ------------- ------------
FROM CAPITAL SHARE TRANSACTIONS (Note 4):
CLASS A
Proceeds from shares sold.................... 1,910,659 8,624,377 881,276 1,844,954
Net asset value of shares issued in
reinvestment of distributions
to shareholders ........................... 763,475 1,451,000 35,356 61,635
Payments for shares redeemed................. (7,419,968) (10,224,952) (728,543) (1,218,368)
------------ ------------- ------------- ------------
Net increase (decrease) in net assets from
Class A share transactions................... (4,745,834) (149,575) 188,089 688,221
------------ ------------- ------------- ------------
CLASS C
Proceeds from shares sold.................... 719,191 2,807,607 180,180 341,886
Net asset value of shares issued in
reinvestment of distributions to shareholders 61,743 91,538 7,789 24,412
Payments for shares redeemed................. (918,256) (1,012,792) (289,166) (4,386,211)
------------ ------------- ------------- ------------
Net increase (decrease) in net assets from
Class C share transactions................... (137,322) 1,886,353 (101,197) (4,019,913)
------------ ------------- ------------- ------------
Net increase (decrease) from capital
share transactions .......................... (4,883,156) 1,736,778 86,892 (3,331,692)
------------ ------------- ------------- ------------
TOTAL INCREASE (DECREASE) IN NET ASSETS ....... (891,465) 1,497,638 942,795 (2,908,199)
NET ASSETS:
Beginning of period.......................... 43,611,774 42,114,136 6,295,169 9,203,368
------------ ------------- ------------- ------------
End of period................................ $ 42,720,309 $ 43,611,774 $ 7,237,964 $ 6,295,169
============ ============= ============= ============
ACCUMULATED UNDISTRIBUTED NET
INVESTMENT INCOME ......................... $ -- $ -- $ 279 $ --
============ ============= ============= ============
<FN>
See accompanying notes to financial statements.
</FN>
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
U.S. GOVERNMENT SECURITIES FUND
FINANCIAL HIGHLIGHTS
===================================================================================================================
Per Share Data for a Share Outstanding Throughout Each Period
===================================================================================================================
Six Months
Ended Year Ended March 31,
Sept. 30, 1995
(Unaudited) 1995 1994 1993 1992 1991
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value at beginning of period........... $ 9.22 $ 9.85 $ 10.47 $ 10.18 $ 10.04 $ 9.78
--------- --------- --------- --------- --------- ----------
Income from investment operations:
Net investment income......................... 0.29 0.58 0.64 0.69 0.79 0.81
Net realized and unrealized
gains (losses) on investments............... 0.31 (0.59) (0.59) 0.47 0.14 0.26
--------- --------- --------- --------- ---------- ---------
Total from investment operations................. 0.60 (0.01) 0.05 1.16 0.93 1.07
--------- --------- --------- --------- ---------- ---------
Less distributions:
Dividends from net investment income.......... (0.29) (0.58) (0.64) (0.69) (0.79) (0.81)
Distributions from net realized gains......... -- (0.04) (0.03) (0.18) -- --
--------- --------- --------- --------- ---------- ---------
Total distributions.............................. (0.29) (0.62) (0.67) (0.87) (0.79) (0.81)
--------- --------- --------- --------- ---------- ---------
Net asset value at end of period................. $ 9.53 $ 9.22 $ 9.85 $ 10.47 $ 10.18 $ 10.04
========= ========= ========= ========= ========== =========
Total return(A) ................................. 13.09%(C) 0.06% 0.30% 11.71% 9.46% 11.37%
========= ========= ========= ========= ========== ========
Net assets at end of period (000's) ............. $ 27,151 $ 26,174 $ 40,479 $ 31,633 $ 40,253 $ 43,753
========= ========= ========= ========= ========== =========
Ratio of expenses to average net assets(B) ...... 1.20%(C) 1.20% 1.20% 1.20% 1.19% 1.30%
Ratio of net investment income to
average net assets ............................ 6.11%(C) 6.26% 6.14% 6.61% 7.73% 8.19%
Portfolio turnover rate.......................... 214%(C) 205% 246% 188% 55% 53%
<FN>
(A)The total returns shown do not include the effect of applicable sales loads.
(B)Absent fee waivers by the Adviser, the ratio of expenses to average net
assets for the period ended September 30, 1995 would have been 1.27%(C) (Note
3).
(C)Annualized.
See accompanying notes to financial statements.
</FN>
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
TREASURY TOTAL RETURN FUND
FINANCIAL HIGHLIGHTS
======================================================================================================================
Per Share Data for a Share Outstanding Throughout Each Period
======================================================================================================================
Six Months
Ended Year Ended March 31,
Sept. 30, 1995
(Unaudited) 1995 1994 1993 1992 1991
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value at beginning of period........... $ 8.36 $ 8.95 $ 9.70 $ 9.10 $ 9.00 $ 8.78
--------- --------- --------- --------- --------- ----------
Income from investment operations:
Net investment income......................... 0.20 0.43 0.37 0.55 0.60 0.61
Net realized and unrealized gains (losses)
on investments.............................. 0.01 (0.59) (0.39) 0.87 0.17 0.22
--------- --------- --------- --------- --------- ----------
Total from investment operations................. 0.21 (0.16) (0.02) 1.42 0.77 0.83
--------- --------- --------- --------- --------- ----------
Less distributions:
Dividends from net investment income(A) ..... (0.20) (0.43) (0.37) (0.55) (0.60) (0.61)
Distributions from net realized gains(A) ..... -- -- (0.36) (0.27) (0.07) --
--------- --------- --------- --------- ---------- ---------
Total distributions.............................. (0.20) (0.43) (0.73) (0.82) (0.67) (0.61)
--------- --------- --------- --------- ---------- ---------
Net asset value at end of period................. $ 8.37 $ 8.36 $ 8.95 $ 9.70 $ 9.10 $ 9.00
========= ========= ========= ========= ========= ==========
Total return(B) ................................. 5.11%(D) (1.75%) (0.54%) 16.21% 8.98% 9.95%
========= ========= ========= ========= ========= ==========
Net assets at end of period (000's).............. $ 21,926 $ 25,974 $ 32,190 $43,427 $ 49,071 $ 65,326
--------- --------- --------- --------- --------- ----------
Ratio of expenses to average net assets(C) ...... 1.25%(D) 1.25% 1.25% 1.25% 1.25% 1.21%
Ratio of net investment income to
average net assets ........................... 4.84%(D) 5.06% 3.84% 5.82% 6.58% 6.96%
Portfolio turnover rate.......................... 0%(D) 63% 526% 161% 130% 198%
<FN>
(A)For the years ended prior to March 31, 1993, the per share data was
calculated using average shares outstanding throughout each year, whereas for
the periods ended March 31, 1993 and thereafter, the per share data was
calculated based upon actual distributions. Actual distributions per share
based upon the actual number of shares outstanding on the ex-dividend dates of
distributions amounted to $.61 and $.62 from net investment income for the
years ended March 31, 1992 and 1991, respectively, and $.08 from net realized
gains for the year ended March 31, 1992.
(B)The total returns shown do not include the effect of applicable sales loads.
(C)Absent fee waivers by the Adviser, the ratios of expenses to average net
assets would have been 1.39%(D) and 1.37% for the periods ended September 30,
1995 and March 31, 1995, respectively (Note 3).
(D)Annualized.
See accompanying notes to financial statements.
</FN>
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
UTILITY FUND - CLASS A
FINANCIAL HIGHLIGHTS
======================================================================================================================
Per Share Data for a Share Outstanding Throughout Each Period
======================================================================================================================
Six Months
Ended Year Ended March 31,
Sept. 30, 1995
(Unaudited) 1995 1994 1993 1992 1991
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value at beginning of period........... $ 10.47 $ 10.52 $ 11.34 $ 10.58 $ 10.01 $ 9.75
--------- --------- --------- --------- --------- ---------
Income from investment operations:
Net investment income......................... 0.25 0.43 0.37 0.48 0.51 0.61
Net realized and unrealized gains (losses)
on investments.............................. 1.03 (0.05) (0.59) 1.62 0.75 0.30
--------- --------- --------- --------- ---------- ---------
Total from investment operations................. 1.28 0.38 (0.22) 2.10 1.26 0.91
--------- --------- --------- --------- ---------- ---------
Less distributions:
Dividends from net investment income (A) ..... (0.25) (0.43) (0.37) (0.48) (0.51) (0.61)
Distributions from net realized gains(A) ..... -- -- (0.23) (0.86) (0.18) (0.04)
--------- --------- --------- --------- ---------- ---------
Total distributions.............................. (0.25) (0.43) (0.60) (1.34) (0.69) (0.65)
--------- --------- --------- --------- ---------- ---------
Net asset value at end of period................. $ 11.50 $ 10.47 $ 10.52 $ 11.34 $ 10.58 $ 10.01
========= ========= ========= ========= ========= ==========
Total return(B) ................................. 24.49%(D) 3.68% (2.11%) 20.64% 11.84% 9.23%
========= ========= ========= ========= ========= ==========
Net assets at end of period (000's).............. $ 38,924 $ 40,012 $ 40,373 $ 42,051 $ 29,398 $ 11,214
========= ========= ========= ========= ========= ==========
Ratio of expenses to average net assets(C) ...... 1.25%(D) 1.25% 1.25% 1.40% 1.63% 1.80%(C)
Ratio of net investment income to
average net assets ........................... 4.39%(D) 4.06% 3.32% 4.41% 4.83% 6.25%
Portfolio turnover rate.......................... 18%(D) 17% 91% 137% 33% 61%
<FN>
(A)For the years ended prior to March 31, 1993, the per share data was
calculated using average shares outstanding throughout each year, whereas for
the periods ended March 31, 1993 and thereafter, the per share data was
calculated based upon actual distributions. Actual distributions per share
based upon the actual number of shares outstanding on the ex-dividend dates of
distributions amounted to $.48 and $.57 from net investment income for the
years ended March 31, 1992 and 1991, respectively, and $.13 and $.03 from net
realized capital gains for the years ended March 31, 1992 and 1991,
respectively.
(B)The total returns shown do not include the effect of applicable sales loads.
(C)Absent fee waivers by the Adviser, the ratio of expenses to average net
assets for the year ended March 31, 1991 would have been 1.91% (Note 3).
(D)Annualized.
See accompanying notes to financial statements.
</FN>
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
UTILITY FUND - CLASS C
FINANCIAL HIGHLIGHTS
=====================================================================================================================
Per Share Data for a Share Outstanding Throughout Each Period
=====================================================================================================================
From Date of
Six Months Public Offering
Ended Year (Aug. 2, 1993)
Sept. 30, 1995 Ended Through
(Unaudited) March 31, 1995 March 31, 1994
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Net asset value at beginning of period.................... $ 10.46 $ 10.51 $ 11.55
--------------- --------------- ---------------
Income from investment operations:
Net investment income.................................. 0.20 0.35 0.23
Net realized and unrealized gains (losses) on investments 1.04 (0.04) (0.81)
--------------- --------------- ---------------
Total from investment operations.......................... 1.24 0.31 (0.58)
--------------- --------------- ---------------
Less distributions:
Dividends from net investment income................... (0.21) (0.36) (0.23)
Distributions from net realized gains.................. -- -- (0.23)
--------------- --------------- ---------------
Total distributions....................................... (0.21) (0.36) (0.46)
--------------- --------------- ---------------
Net asset value at end of period.......................... $ 11.49 $ 10.46 $ 10.51
=============== =============== ===============
Total return(A) .......................................... 23.72%(B) 3.00% ( 7.89%)(B)
=============== =============== ===============
Net assets at end of period (000's)....................... $ 3,797 $ 3,599 $ 1,742
=============== =============== ===============
Ratio of expenses to average net assets .................. 2.00%(B) 2.00% 2.00%(B)
Ratio of net investment income to average net assets ..... 3.63%(B) 3.41% 2.19%(B)
Portfolio turnover rate................................... 18%(B) 17% 91%(B)
<FN>
(A)The total returns shown do not include the effect of applicable sales loads.
(B)Annualized.
See accompanying notes to financial statements.
</FN>
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
EQUITY FUND - CLASS A
FINANCIAL HIGHLIGHTS
====================================================================================================================
Per Share Data for a Share Outstanding Throughout Each Period
====================================================================================================================
From Date of
Six Months Public Offering
Ended Year (Aug. 2, 1993)
Sept. 30, 1995 Ended Through
(Unaudited) March 31, 1995 March 31, 1994
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Net asset value at beginning of period.................... $ 9.84 $ 9.26 $ 10.02
--------------- --------------- ---------------
Income from investment operations:
Net investment income.................................. 0.08 0.15 0.08
Net realized and unrealized gains (losses) on investments 1.36 0.59 (0.34)
--------------- --------------- ---------------
Total from investment operations.......................... 1.44 0.74 (0.26)
--------------- --------------- ---------------
Less distributions:
Dividends from net investment income................... (0.08) (0.16) (0.08)
Distributions from net realized gains.................. -- -- (0.42)
--------------- --------------- ---------------
Total distributions....................................... (0.08) (0.16) (0.50)
--------------- --------------- ---------------
Net asset value at end of period.......................... $ 11.20 $ 9.84 $ 9.26
=============== =============== ===============
Total return(A) .......................................... 29.33%(C) 8.07% (3.98%)(C)
=============== =============== ===============
Net assets at end of period (000's)....................... $ 5,086 $ 4,300 $ 3,346
=============== =============== ===============
Ratio of expenses to average net assets(B) .............. 1.25%(C) 1.25% 1.24%(C)
Ratio of net investment income to average net assets ..... 1.59%(C) 1.57% 0.82%(C)
Portfolio turnover rate................................... 78%(C) 159% 109%(C)
- ----------------------------------------------------------------------------------------------------------------------
<FN>
(A)The total returns shown do not include the effect of applicable sales loads.
(B)Absent fee waivers and/or expense reimbursements by the Adviser, the ratios
of expenses to average net assets would have been 2.35%(C), 1.94% and 2.04%(C)
for the periods ended September 30, 1995, March 31, 1995 and March 31, 1994,
respectively (Note 3).
(C)Annualized.
See accompanying notes to financial statements.
</FN>
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
EQUITY FUND - CLASS C
FINANCIAL HIGHLIGHTS
====================================================================================================================
Per Share Data for a Share Outstanding Throughout Each Period
====================================================================================================================
From Date of
Six Months Public Offering
Ended Year (June 7, 1993)
Sept. 30, 1995 Ended Through
(Unaudited) March 31, 1995 March 31, 1994
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Net asset value at beginning of period.................... $` 9.86 $ 9.26 $ 10.00
--------------- --------------- ---------------
Income from investment operations:
Net investment income.................................. 0.05 0.10 0.03
Net realized and unrealized gains (losses) on investments 1.34 0.57 (0.32)
--------------- --------------- ---------------
Total from investment operations.......................... 1.39 0.67 (0.29)
--------------- --------------- ---------------
Less distributions:
Dividends from net investment income................... (0.04) (0.07) (0.03)
Distributions from net realized gains.................. -- -- (0.42)
--------------- --------------- ---------------
Total distributions....................................... (0.04) (0.07) (0.45)
--------------- --------------- ---------------
Net asset value at end of period.......................... $ 11.21 $ 9.86 $ 9.26
=============== =============== ===============
Total return(A) .......................................... 28.20%(C) 7.32% (3.58%)(C)
=============== =============== ===============
Net assets at end of period (000's)....................... $ 2,152 $ 1,995 $ 5,857
=============== =============== ===============
Ratio of expenses to average net assets(B) .............. 2.00%(C) 2.00% 1.94%(C)
Ratio of net investment income to average net assets ..... 0.85%(C) 0.68% 0.58%(C)
Portfolio turnover rate................................... 78%(C) 159% 109%(C)
- ---------------------------------------------------------------------------------------------------------------------
<FN>
(A)The total returns shown do not include the effect of applicable sales loads.
(B)Absent fee waivers and/or expense reimbursements by the Adviser, the ratios
of expenses to average net assets would have been 2.98%(C), 2.50% and 2.33%(C)
for the periods ended September 30, 1995, March 31, 1995 and March 31, 1994,
respectively (Note 3).
(C)Annualized.
See accompanying notes to financial statements.
</FN>
</TABLE>
<PAGE>
NOTES TO FINANCIAL STATEMENTS
September 30, 1995 (Unaudited)
================================================================================
1. Significant Accounting Policies
The U.S. Government Securities Fund, the Treasury Total Return Fund, the Utility
Fund and the Equity Fund (collectively, the Funds) are each a diversified series
of shares of Midwest Strategic Trust (the Trust). The Trust is registered under
the Investment Company Act of 1940, as amended, as an open-end management
investment company. The Trust was established as a Massachusetts business trust
under a Declaration of Trust dated November 18, 1982. The Declaration of Trust,
as amended, permits the Trustees to issue an unlimited number of shares of each
Fund.
The Utility Fund and the Equity Fund each offer two classes of shares: Class A
shares (sold subject to a maximum 4% front-end sales load and a distribution fee
of up to .25% of average daily net assets) and Class C shares (sold subject to a
maximum contingent deferred sales load of 1% if redeemed within a one-year
period from purchase and a distribution fee of up to 1% of average daily net
assets). Each Class A and Class C share of a Fund represents identical interests
in the investment portfolio of such Fund and has the same rights, except that
(i) Class C shares bear the expenses of higher distribution fees, which is
expected to cause Class C shares to have a higher expense ratio and to pay lower
dividends than those related to Class A shares; (ii) certain other class
specific expenses will be borne solely by the class to which such expenses are
attributable; and (iii) each class has exclusive rights with respect to matters
relating to its own distribution arrangements.
The following is a summary of the Funds' significant accounting policies:
Security valuation -- The Funds' portfolio securities are valued as of the close
of business of the regular session of the New York Stock Exchange (currently
4:00 p.m., Eastern time). U.S. Government obligations and mortgage-backed
securities are generally valued at their most recent bid price as obtained from
one or more of the major market makers for such securities or are valued based
on estimates of market values obtained from yield data relating to instruments
or securities with similar characteristics. Portfolio securities listed on stock
exchanges and securities traded in the over-the-counter market are valued at the
last sales price as of the close of business on the day the securities are being
valued. Securities not traded on a particular day, or for which the last sale
price is not readily available, are valued at the closing bid price quoted by
brokers that make markets in the securities. On limited occasions, if the
valuation provided by a pricing service ignores certain market conditions
affecting the value of a security, or if the pricing service cannot provide a
valuation, the fair value of the security will be determined in good faith
consistent with procedures established by the Board of Trustees.
Repurchase agreements -- Repurchase agreements, which are collateralized by U.S.
Government obligations, are valued at cost which, together with accrued
interest, approximates market. Collateral for repurchase agreements is held in
safekeeping in the customer-only account of the Funds' custodian, at the Federal
Reserve Bank of Cleveland. At the time a Fund enters into a repurchase
agreement, the seller agrees that the value of the underlying securities,
including accrued interest, will at all times be equal to or exceed the value of
the repurchase agreement. In addition, each Fund actively monitors and seeks
additional collateral, as needed. In the event of a bankruptcy or other default
of the seller of a repurchase agreement, a Fund could experience both delays in
liquidating the underlying security and losses. These losses would equal the
cost of the repurchase agreement and accrued interest, net of any proceeds
received in liquidation of the underlying securities. To minimize the
possibility of loss, each Fund enters into repurchase agreements only with
institutions deemed creditworthy, including banks having assets in excess of $10
billion and primary U.S. Government securities dealers.
Share valuation -- The net asset value of each of the U.S. Government Securities
Fund and the Treasury Total Return Fund is calculated daily by dividing the
total value of each Fund's assets, less liabilities, by the number of shares
outstanding. The maximum offering price per share of the U.S. Government
Securities Fund is equal to net asset value per share plus a sales load equal to
2.04% of net asset value (or 2% of the offering price). The maximum offering
price per share of the Treasury Total Return Fund is equal to net asset value
per share plus a sales load equal to 4.17% of net asset value (or 4% of the
offering price). The redemption price per share of each Fund is equal to the net
asset value per share.
The net asset value of Class A shares and Class C shares of each of the Utility
Fund and the Equity Fund is calculated daily for each class by dividing the
total value of the Fund's assets attributable to that class, less liabilities
attibutable to that class, by the number of shares of that class outstanding.
The maximum offering price of Class A shares of each Fund is equal to net asset
value per share plus a sales load equal to 4.17% of net asset value (or 4% of
the offering price). The offering price of Class C shares of each Fund is equal
to net asset value per share.
The redemption price per share of Class A shares and Class C shares of each of
the Utility Fund and the Equity Fund is equal to the net asset value per share.
However, Class C shares of the Utility Fund and the Equity Fund are each subject
to a contingent deferred sales load of 1% of the original purchase price if
redeemed within a one-year period from the date of purchase.
Investment income -- Interest income is accrued as earned. Dividend income is
recorded on the ex-dividend date. Discounts and premiums on securities purchased
are amortized in accordance with income tax regulations which approximate
generally accepted accounting principles.
<PAGE>
Distributions to shareholders -- Dividends from net investment income are
declared daily and paid on the last business day of each month to shareholders
of the U.S. Government Securities Fund and the Treasury Total Return Fund.
Dividends from net investment income are declared and paid quarterly to
shareholders of the Utility Fund and the Equity Fund. With respect to each Fund,
net realized short-term capital gains, if any, may be distributed throughout the
year and net realized long-term capital gains, if any, are distributed at least
once each year. Income distributions and capital gain distributions are
determined in accordance with income tax regulations.
Allocations between classes -- Investment income earned by the Utility Fund and
the Equity Fund is allocated daily to each class of shares based upon its
proportionate share of total net assets of the Fund. Realized capital gains and
losses and unrealized appreciation and depreciation are allocated daily to each
class of shares based upon its proportionate share of total net assets of the
Fund. Class specific expenses are charged directly to the class incurring the
expense. Common expenses which are not attributable to a specific class are
allocated daily to each class of shares based upon its proportionate share of
total net assets of the Fund.
Security transactions -- Security transactions are accounted for on the trade
date. Securities sold are valued on a specific identification basis.
Securities traded on a to-be-announced basis -- The U.S. Government Securities
Fund frequently trades portfolio securities on a "to-be-announced" (TBA) basis.
In a TBA transaction, the Fund has committed to purchase securities for which
all specific information is not yet known at the time of the trade, particularly
the face amount in mortgage-backed securities transactions. Securities purchased
on a TBA basis are not settled until they are delivered to the Fund, normally 15
to 45 days later. These transactions are subject to market fluctuations and
their current value is determined in the same manner as for other portfolio
securities. When effecting such transactions, assets of a dollar amount
sufficient to make payment for the portfolio securities to be purchased are
placed in a segregated account on the trade date.
Federal income tax -- It is each Fund's policy to comply with the special
provisions of the Internal Revenue Code available to regulated investment
companies. As provided therein, in any fiscal year in which a Fund so qualifies,
and distributes at least 90% of its taxable net income, the Fund (but not the
shareholders) will be relieved of federal income tax on the income distributed.
Accordingly, no provision for income taxes is made.
In order to avoid imposition of the excise tax applicable to regulated
investment companies, it is also each Fund's intention to declare as dividends
in each calendar year at least 98% of its net investment income (earned during
the calendar year) and 98% of its net realized capital gains (earned during the
twelve months ending October 31 of the calendar year) plus undistributed amounts
from prior years.
The following information is based upon the federal income tax cost of portfolio
investments (excluding repurchase agreements) as of September 30, 1995:
<TABLE>
- -----------------------------------------------------------------------------------------------------------------
U.S. Govt. Treasury Total
Securities Return Utility Equity
Fund Fund Fund Fund
- -----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Gross unrealized appreciation................... $ 295,343 $ 21,914 $ 4,273,386 $ 941,960
Gross unrealized depreciation................... (35,427) -- (352,710) (35,965)
------------ ------------- ------------- ------------
Net unrealized appreciation..................... $ 259,916 $ 21,914 $ 3,920,676 $ 905,995
============ ============= ============= ============
Federal income tax cost......................... $ 29,053,816 $ 16,997,147 $ 38,540,179 $ 5,575,505
============ ============= ============= ============
- -----------------------------------------------------------------------------------------------------------------
</TABLE>
As of March 31, 1995, the U.S. Government Securities Fund, the Treasury Total
Return Fund, the Utility Fund and the Equity Fund had capital loss carryforwards
for federal income tax purposes of $5,209,965, $2,090,947, $368,974 and
$558,651, respectively, none of which expire until at least March 31, 2002.
These capital loss carryforwards may be utilized in future years to offset net
realized capital gains prior to distributing such gains to shareholders.
2. Investment Transactions
Investment transactions (excluding short-term investments) were as follows for
the six months ended September 30, 1995:
<TABLE>
- ------------------------------------------------------------------------------------------------------------------
U.S. Govt. Treasury Total
Securities Return Utility Equity
Fund Fund Fund Fund
- ------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Purchases of investment securities............. $ 26,338,968 $ -- $ 3,626,451 $ 2,872,518
============ ============= ============= ============
Proceeds from sales and maturities of
investment securities ...................... $ 24,780,613 $ -- $ 5,464,415 $ 2,094,756
============ ============= ============= ============
- ------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
3. Transactions with Affiliates
The President of the Trust is the controlling shareholder of Leshner Financial,
Inc., whose subsidiaries include Midwest Group Financial Services, Inc. (the
Adviser), the Funds' principal underwriter and investment adviser, and MGF
Service Corp. (MGF), the shareholder servicing and transfer agent and accounting
and pricing agent for the Trust.
MANAGEMENT AGREEMENTS
Each Fund's investments are managed by the Adviser under the terms of separate
Management Agreements. Under the terms of the Management Agreements, each Fund
pays the Adviser a fee, computed and accrued daily and paid monthly, at an
annual rate of 0.75% of its average daily net assets up to $200,000,000, 0.7% of
such net assets from $200,000,000 to $500,000,000 and 0.5% of such net assets in
excess of $500,000,000.
States in which shares of the Trust are offered may impose an expense limitation
based upon net assets. The Adviser has agreed to reimburse each Fund yearly for
expenses which exceed the lowest applicable expense limitation of any state. No
such reimbursement was required for the six months ended September 30, 1995. In
order to reduce the operating expenses of the U.S. Government Securities Fund
and the Treasury Total Return Fund, the Adviser voluntarily waived advisory fees
of $9,000 and $16,500, respectively, during the period. In order to reduce the
operating expenses of the Equity Fund, the Adviser voluntarily waived its entire
advisory fee of $24,756 and reimbursed the Fund for $8,021 of common operating
expenses and $2,418 of Class A expenses during the period.
TRANSFER AGENT AND SHAREHOLDER SERVICE AGREEMENT
Under the terms of the Transfer, Dividend Disbursing, Shareholder Service and
Plan Agency Agreement between the Trust and MGF, MGF maintains the records for
each shareholder's account, answers shareholders' inquiries concerning their
accounts, processes purchases and redemptions of each Fund's shares, acts as
dividend and distribution disbursing agent and performs other shareholder
service functions. Under the terms of the Agreement, MGF receives for its
services a fee payable monthly at an annual rate of $21.00 per shareholder
account from each of the U.S. Government Securities Fund and the Treasury Total
Return Fund and $17.00 per shareholder account from each of the Utility Fund and
Equity Fund, subject to a $1,000 minimum monthly fee for each Fund, or for each
class of shares of a Fund, as applicable. In addition, each Fund pays
out-of-pocket expenses, including but not limited to, postage and supplies.
ACCOUNTING SERVICES AGREEMENT
Under the terms of the Accounting Services Agreement between the Trust and MGF,
MGF calculates the daily net asset value per share and maintains the financial
books and records of each Fund. For these services, MGF receives a monthly fee
from each Fund. The monthly fee, based on current asset levels, is $3,250 for
the U.S. Government Securities Fund, $2,750 for the Treasury Total Return Fund,
and $3,500 for each of the Utility Fund and the Equity Fund. In addition, each
Fund pays certain out-of-pocket expenses incurred by MGF in obtaining valuations
of such Fund's portfollio securities.
UNDERWRITING AGREEMENT
The Adviser is the Funds' principal underwriter and, as such, acts as the
exclusive agent for distribution of the Funds' shares. Under the terms of the
Underwriting Agreement between the Trust and the Adviser, the Adviser earned
$460, $665, $5,525, and $910 from underwriting and broker commissions on the
sale of shares of the U.S. Government Securities Fund, the Treasury Total Return
Fund, the Utility Fund and the Equity Fund, respectively, for the six months
ended September 30, 1995.
PLANS OF DISTRIBUTION
The Trust has a Plan of Distribution (Class A Plan) under which shares of each
Fund having one class of shares and Class A shares of each Fund having two
classes of shares may directly incur or reimburse the Adviser for expenses
related to the distribution and promotion of shares. The annual limitation for
payment of such expenses under the Class A Plan is .25% of average daily net
assets attributable to such shares.
The Trust also has a Plan of Distribution (Class C Plan) under which Class C
shares of each Fund having two classes of shares may directly incur or reimburse
the Adviser for expenses related to the distribution and promotion of shares.
The annual limitation for payment of such expenses under the Class C Plan is 1%
of average daily net assets attributable to Class C shares.
<PAGE>
4. Capital Share Transactions
Proceeds and payments on capital shares as shown in the Statements of Changes in
Net Assets are the result of the following share transactions for the periods
ended September 30, 1995 and March 31, 1995:
<TABLE>
- ------------------------------------------------------------------------------------------------------------------
U.S. GOVERNMENT TREASURY TOTAL
SECURITIES FUND RETURN FUND
- ------------------------------------------------------------------------------------------------------------------
Six Months Six Months
Ended Year Ended Year
Sept. 30, 1995 Ended Sept. 30, 1995 Ended
(Unaudited) March 31, 1995 (Unaudited) March 31, 1995
- ------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Shares sold..................................... 306,274 456,445 25,567 471,081
Shares issued in reinvestment of distributions
to shareholders.............................. 67,300 203,373 60,917 145,610
Shares redeemed ................................ (362,427) (1,932,052) (572,167) (1,115,965)
------------ ------------- ------------- ------------
Net increase (decrease) in shares outstanding... 11,147 (1,272,234) (485,683) (499,274)
Shares outstanding, beginning of period......... 2,837,768 4,110,002 3,105,434 3,604,708
------------ ------------- ------------- ------------
Shares outstanding, end of period............... 2,848,915 2,837,768 2,619,751 3,105,434
============ ============= ============= ============
- -----------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
- -----------------------------------------------------------------------------------------------------------------------
UTILITY EQUITY
FUND FUND
- -----------------------------------------------------------------------------------------------------------------------
Six Months Six Months
Ended Year Ended Year
Sept. 30, 1995 Ended Sept. 30, 1995 Ended
(Unaudited) March 31, 1995 (Unaudited) March 31, 1995
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
CLASS A
Shares sold..................................... 176,068 817,927 83,653 197,947
Shares issued in reinvestment of distributions
to shareholders.............................. 68,441 139,905 3,292 6,598
Shares redeemed................................. (680,684) (975,981) (69,393) (129,000)
------------ ------------- ------------- ------------
Net increase (decrease) in shares outstanding... (436,175) (18,149) 17,552 75,545
Shares outstanding, beginning of period......... 3,821,010 3,839,159 436,763 361,218
------------ ------------- ------------- ------------
Shares outstanding, end of period............... 3,384,835 3,821,010 454,315 436,763
============ ============= ============= ============
CLASS C
Shares sold..................................... 66,265 266,298 17,026 37,075
Shares issued in reinvestment of distributions
to shareholders.............................. 5,533 8,821 728 2,646
Shares redeemed................................. (85,286) (96,684) (28,217) (469,556)
------------ ------------- ------------- ------------
Net increase (decrease) in shares outstanding... (13,488) 178,435 (10,463) (429,835)
Shares outstanding, beginning of period......... 344,067 165,632 202,399 632,234
------------ ------------- ------------- ------------
Shares outstanding, end of period............... 330,579 344,067 191,936 202,399
============ ============= ============= ============
- -----------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
U.S. GOVERNMENT SECURITIES FUND
PORTFOLIO OF INVESTMENTS
September 30, 1995 (Unaudited)
=======================================================================================================================
Par Market
Value INVESTMENTS -- 108.0% Value
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
U.S. TREASURY OBLIGATIONS -- 16.1%
$ 3,000,000 U.S. Treasury Notes, 6.25%, 8/31/00.......................................... $ 3,027,186
1,000,000 U.S. Treasury Bonds, 10.75%, 8/15/05......................................... 1,324,062
- -------------- -------------
$ 4,000,000 TOTAL U.S. TREASURY OBLIGATIONS (Amortized Cost $4,343,572).................. $ 4,351,248
- -------------- -------------
U.S. GOVERNMENT AGENCY ISSUES -- 91.9%
$ 3,000,000 Government National Mortgage Assoc., ARM, TBA, 6.00%, 30-Year................ $ 3,005,625
2,000,000 Federal Home Loan Bank, 7.30%, 8/10/00....................................... 2,004,982
3,000,000 Federal Home Loan Mortgage Corp., 7.65%, 5/10/05............................. 3,109,838
2,000,000 Federal Home Loan Mortgage Corp., 7.05%, 6/8/05.............................. 2,022,064
1,938,798 Federal Home Loan Mortgage Corp. Pool #E00228, 6.50%, 7/1/08................. 1,913,535
1,230,712 Federal National Mortgage Assoc. Pool #50811, 7.50%, 12/1/12................. 1,246,920
1,843,637 Federal National Mortgage Assoc. Pool #190666, 7.00%, 3/1/14................. 1,830,233
2,981,189 Federal National Mortgage Assoc. Pool #220114, 7.00%, 6/1/23................. 2,938,677
1,009,874 Federal National Mortgage Assoc. Pool #296011, 8.50%, 10/1/24................ 1,044,260
937,112 Federal National Mortgage Assoc. Pool #297826, 8.50%, 11/1/24................ 969,021
1,998,328 Federal National Mortgage Assoc. Pool #317689, 6.50%, 8/1/25................. 1,924,636
2,997,664 Federal National Mortgage Assoc. Pool #317691, 7.00%, 8/1/25................. 2,952,693
- -------------- -------------
$ 24,937,314 TOTAL U.S. GOVERNMENT AGENCY ISSUES
- -------------- (Amortized Cost $24,710,244)............................................. $ 24,962,484
-------------
$ 28,937,314 TOTAL INVESTMENTS AT VALUE-- 108.0%
============== (Amortized Cost $29,053,816)............................................. $ 29,313,732
-------------
</TABLE>
<TABLE>
====================================================================================================================
Face Market
Amount REPURCHASE AGREEMENTS (1) -- 2.5% Value
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
$ 680,000 Nesbitt Burns Securities, Inc., 5.60%, dated 9/29/95, due 10/2/95,
- -------------- repurchase proceeds $680,317............................................. $ 680,000
-------------
$ 680,000 TOTAL REPURCHASE AGREEMENTS ................................................. $ 680,000
============== -------------
TOTAL INVESTMENTS AND REPURCHASE AGREEMENTS -- 110.5% ...................... $ 29,993,732
OTHER ASSETS AND LIABILITIES, NET-- (10.5%) ................................ (2,842,522)
-------------
NET ASSETS-- 100.0% ......................................................... $ 27,151,210
=============
<FN>
(1)Repurchase agreements are fully collateralized by U.S. Government obligations.
ARM - Adjustable Rate Mortgage
See accompanying notes to financial statements.
</FN>
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
TREASURY TOTAL RETURN FUND
PORTFOLIO OF INVESTMENTS
September 30, 1995 (Unaudited)
====================================================================================================================
Par Market
Value U.S. TREASURY OBLIGATIONS-- 77.6% Value
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
$ 3,000,000 U.S. Treasury Notes, 4.25%, 12/31/95......................................... $ 2,991,561
8,000,000 U.S. Treasury Notes, 7.50%, 1/31/96.......................................... 8,050,000
6,000,000 U.S. Treasury Notes, 4.625%, 2/15/96......................................... 5,977,500
- -------------- -------------
$ 17,000,000 TOTAL U.S. TREASURY OBLIGATIONS
============== (Amortized Cost $16,997,147)............................................. $ 17,019,061
-------------
</TABLE>
<TABLE>
==================================================================================================================
Face Market
Amount REPURCHASE AGREEMENTS(1) -- 22.2% Value
- ------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
$ 878,000 Nesbitt Burns Securities, Inc., 5.60%, dated 9/29/95, due 10/2/95,
repurchase proceeds $878,410............................................. $ 878,000
2,000,000 Daiwa Securities, 5.75%, dated 9/27/95, due 10/4/95,
repurchase proceeds $2,002,236........................................... 2,000,000
2,000,000 Fuji Securities, 5.70%, dated 9/28/95, due 10/5/95,
repurchase proceeds $2,002,217........................................... 2,000,000
- -------------- -------------
$ 4,878,000 TOTAL REPURCHASE AGREEMENTS ................................................. $ 4,878,000
============== -------------
TOTAL INVESTMENTS AND REPURCHASE AGREEMENTS AT VALUE -- 99.8% .............. $ 21,897,061
OTHER ASSETS AND LIABILITIES, NET-- 0.2% ................................... 29,025
-------------
NET ASSETS-- 100.0% ......................................................... $ 21,926,086
=============
<FN>
(1)Repurchase agreements are fully collateralized by U.S. Treasury obligations.
See accompanying notes to financial statements.
</FN>
</TABLE>
<TABLE>
<CAPTION>
UTILITY FUND
PORTFOLIO OF INVESTMENTS
September 30, 1995 (Unaudited)
===================================================================================================================
Market
COMMON STOCK -- 83.7% Shares Value
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
American Water Works, Inc..................................................... 35,000 $ 1,071,875
Ameritech Corp................................................................ 45,000 2,345,625
AT&T Corp..................................................................... 30,000 1,972,500
Baltimore Gas & Electric Co................................................... 50,050 1,295,044
Bell Atlantic Corp............................................................ 20,000 1,227,500
BellSouth Corp................................................................ 16,000 1,170,000
CMS Energy Corp............................................................... 60,000 1,575,000
Central Louisiana Electric.................................................... 30,000 768,750
Cinergy Corp.................................................................. 30,000 836,250
DPL, Inc...................................................................... 50,000 1,156,250
Dominion Resources, Inc....................................................... 45,000 1,693,125
Duke Power Co................................................................. 50,000 2,168,750
FPL Group, Inc................................................................ 50,000 2,043,750
Florida Progress Corp......................................................... 65,000 2,104,375
GTE Corp...................................................................... 65,000 2,551,250
Indiana Energy, Inc........................................................... 15,000 324,375
Kansas City Power & Light Co.................................................. 90,000 2,126,250
MCN Corp...................................................................... 100,000 1,975,000
Montana Power Co.............................................................. 35,000 809,375
Nicor, Inc.................................................................... 20,000 545,000
Northern States Power Co...................................................... 46,000 2,087,250
Nynex Corp.................................................................... 18,000 859,500
Oneok, Inc.................................................................... 25,000 581,250
Scana Corp.................................................................... 70,000 1,680,000
Wicor, Inc.................................................................... 25,000 756,250
-------------
TOTAL COMMON STOCK (Cost $31,907,779)......................................... $ 35,724,294
-------------
</TABLE>
<TABLE>
=====================================================================================================================
Par Market
U.S. TREASURY OBLIGATIONS -- 9.3% Value Value
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
U.S. Treasury Notes, 4.25%, 11/30/95.......................................... $ 4,000,000 $ 3,992,500
-------------- -------------
TOTAL U.S. TREASURY OBLIGATIONS (Amortized Cost $4,001,420) .................. $ 4,000,000 $ 3,992,500
============== -------------
</TABLE>
<TABLE>
=====================================================================================================================
Par Market
CORPORATE BONDS -- 6.4% Value Value
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Dayton Power and Light, 8.40%, 12/1/22........................................ $ 1,000,000 $ 1,066,760
General Telephone Northwest, 9.75%, 10/15/30.................................. 500,000 531,057
New York Telephone Co., 9.375%, 7/15/31....................................... 1,000,000 1,146,244
-------------- -------------
TOTAL CORPORATE BONDS (Amortized Cost $2,630,980)............................. $ 2,500,000 $ 2,744,061
============== -------------
TOTAL INVESTMENTS AT VALUE-- 99.4% (Amortized Cost $38,540,179)............... $ 42,460,855
-------------
</TABLE>
<TABLE>
=====================================================================================================================
Par Market
REPURCHASE AGREEMENTS(1) -- 0.3% Value Value
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Nesbitt Burns Securities, Inc., 5.60%, dated 9/29/95, due 10/2/95,
repurchase proceeds $136,063............................................. $ 136,000 $ 136,000
-------------- -------------
TOTAL REPURCHASE AGREEMENTS .................................................. $ 136,000 $ 136,000
============== -------------
TOTAL INVESTMENTS AND REPURCHASE AGREEMENTS AT VALUE-- 99.7% ................. $ 42,596,855
OTHER ASSETS AND LIABILITIES, NET-- 0.3% ..................................... 123,454
-------------
NET ASSETS-- 100.0% .......................................................... $ 42,720,309
=============
<FN>
(1)Repurchase agreements are fully collateralized by U.S. Government obligations.
See accompanying notes to financial statements.
</FN>
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
EQUITY FUND
PORTFOLIO OF INVESTMENTS
September 30, 1995 (Unaudited)
===================================================================================================================
Market
COMMON STOCK -- 89.5% Shares Value
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
DURABLE GOODS -- 24.1%
Compaq Computer Corp.(1) ..................................................... 5,800 $ 280,575
Deere & Co.................................................................... 2,500 203,437
Emerson Electric Co........................................................... 2,400 171,600
Ford Motor Co................................................................. 8,000 249,000
General Motors Corp., Class E................................................. 4,000 182,000
Loral Corp.................................................................... 5,500 313,500
Motorola, Inc................................................................. 4,500 343,688
-------------
$ 1,743,800
-------------
CHEMICALS AND DRUGS -- 20.4%
Bristol-Myers Squibb Co....................................................... 3,000 $ 218,625
Morton International, Inc..................................................... 6,000 186,000
Mylan Laboratories............................................................ 10,000 200,000
Schering-Plough............................................................... 6,000 309,000
Sherwin-Williams Co........................................................... 7,800 273,000
United Healthcare Corp........................................................ 6,000 293,250
-------------
$ 1,479,875
-------------
CONSUMER PRODUCTS -- 12.1%
General Electric Co........................................................... 3,600 $ 229,500
Procter & Gamble Co........................................................... 5,000 385,000
Unilever NV................................................................... 2,000 260,000
-------------
$ 874,500
-------------
RETAIL -- 9.4%
Albertson's, Inc.............................................................. 7,400 $ 252,525
Gap, Inc...................................................................... 6,000 216,000
Lowe's Companies, Inc......................................................... 7,000 210,000
-------------
$ 678,525
-------------
FINANCIAL -- 8.0%
American General Corp......................................................... 8,600 $ 321,425
American International Group.................................................. 3,000 255,000
-------------
$ 576,425
-------------
MEDIA AND PUBLISHING -- 6.7%
Capital Cities/ABC, Inc....................................................... 2,500 $ 294,062
Gannett Co., Inc.............................................................. 3,500 191,188
-------------
$ 485,250
-------------
UTILITIES -- 5.4%
AT&T Corp..................................................................... 6,000 $ 394,500
-------------
RESTAURANTS -- 3.4%
McDonald's Corp............................................................... 6,500 $ 248,625
-------------
TOTAL COMMON STOCK (Cost $5,575,505).......................................... $ 6,481,500
-------------
</TABLE>
<TABLE>
===================================================================================================================
Face Market
REPURCHASE AGREEMENTS(2) -- 10.6% Amount Value
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Nesbitt Burns Securities, Inc., 5.60%, dated 9/29/95, due 10/2/95,
repurchase proceeds $766,357............................................. $ 766,000 $ 766,000
-------------- -------------
TOTAL REPURCHASE AGREEMENTS .................................................. $ 766,000 $ 766,000
============== -------------
TOTAL INVESTMENTS AND REPURCHASE AGREEMENTS AT VALUE-- 100.1% ................ $ 7,247,500
OTHER ASSETS AND LIABILITIES, NET-- (0.1%) .................................. (9,536)
-------------
NET ASSETS-- 100.0% .......................................................... $ 7,237,964
=============
<FN>
(1)Non-income producing security.
(2)Repurchase agreements are fully collateralized by U.S. Government obligations.
See accompanying notes to financial statements.
</FN>
</TABLE>
<PAGE>
