Registration No. 2-90309
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
Pre-Effective Amendment No.
Post-Effective Amendment No. 18 X
and
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940
Amendment No. 19 X
CARILLON FUND, INC.
(Exact Name of Registrant as Specified in Charter)
1876 Waycross Road, Cincinnati, Ohio 45240
(Address of Principal Executive Offices)
(513) 595-2600
Registrant's Telephone Number)
John F. Labmeier, Esq.
The Union Central Life Insurance Company
P.O. Box 40888
Cincinnati, Ohio 45240
(Name and Address of Agent for Service)
Copy to:
Jones and Blouch L.L.P.
Suite 405 West
1025 Thomas Jefferson St., N.W.
Washington, D.C. 20007
Pursuant to Rule 24f-2 under the Investment Company Act of 1940,
the Registrant has registered an indefinite amount of securities
under the Securities Act of 1933. A Rule 24f-2 Notice for
Registrant's 1996 fiscal year was filed on February 25, 1997.
It is proposed that this filing will become effective (check
appropriate box)
( ) immediately upon filing pursuant to paragraph (b)
of Rule 485
( ) on (date) pursuant to paragraph (b) of Rule 485
( ) 60 days after filing pursuant to paragraph (a)(1)
of Rule 485
( ) on (date) pursuant to paragraph (a)(1) of Rule 485
( ) 75 days after filing pursuant to paragraph (a)(2)
of Rule 485
(X) on November 15, 1997 pursuant to paragraph (a)(2)
of Rule 485
If appropriate, check the following box:
( ) This post-effective amendment designates a new effective
date for a previously filed post-effective amendment.
<PAGE>
PART A
INFORMATION REQUIRED IN A PROSPECTUS
<PAGE>
CARILLON FUND, INC.
- --------------------------------------------------
Carillon Fund, Inc. (the "Fund"), is a no-load,
diversified, open-end management investment company which is
intended to meet a wide range of investment objectives with its
five separate Portfolios: Equity Portfolio, Bond Portfolio,
Capital Portfolio, S&P 500 Index Portfolio and Micro-Cap
Portfolio. Each Portfolio generally operates as a separate fund
issuing its own shares.
The Equity Portfolio seeks primarily long-term appreciation
of capital, without incurring unduly high risk, by investing
primarily in common stocks and other equity securities. Current
income is a secondary objective.
The Bond Portfolio seeks as high a level of current income
as is consistent with reasonable investment risk, by investing
primarily in long-term, fixed-income, investment-grade corporate
bonds.
The Capital Portfolio seeks to provide the highest total
return through a combination of income and capital appreciation
consistent with the reasonable risks associated with an
investment portfolio of above-average quality by investing in
equity securities, debt instruments and money market
instruments.
The S&P 500 Index Portfolio seeks investment results that
correspond to the total return performance of U.S. common
stocks, as represented by the S&P 500 Index.
The Micro-Cap Portfolio seeks long-term appreciation of
capital by investing primarily in the common stocks of domestic
companies with smaller market capitalizations.
There can be no assurance that any Portfolio will achieve
its objectives.
This Prospectus sets forth concisely the information that a
prospective investor should know before investing in the Fund,
and it should be read and kept for future reference. A Statement
of Additional Information dated November 15, 1997, which
contains further information about the Fund, has been filed with
the Securities and Exchange Commission and is incorporated by
reference into this Prospectus. A copy of the Statement of
Additional Information may be obtained without charge by calling
the Fund at (513) 595-2600, or by writing the Fund at P.O. Box
40409, Cincinnati, Ohio 45240-0409.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION NOR HAS THE COMMISSION PASSED
UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
November 15, 1997
UCCF 514 11-97
<PAGE>
CARILLON FUND, INC.
TABLE OF CONTENTS
Page
The Fund . . . . . . . . . . . . . . . . . . . . . . 2
Annual Fund Operating Expenses . . . . . . . . . . . 3
Financial Highlights . . . . . . . . . . . . . . . . 4
Investment Objectives and Policies . . . . . . . . . 7
Equity Portfolio. . . . . . . . . . . . . . . . 7
Bond Portfolio. . . . . . . . . . . . . . . . . 7
Capital Portfolio . . . . . . . . . . . . . . . 8
S&P 500 Index Portfolio . . . . . . . . . . . . 9
Micro-Cap Portfolio . . . . . . . . . . . . . . 8
Principal Risk Factors. . . . . . . . . . . . . 10
Investment in Foreign Securities. . . . . . . . 11
Foreign Currency Transactions . . . . . . . . . 12
Repurchase Agreements . . . . . . . . . . . . . 12
Reverse Repurchase Agreements . . . . . . . . . 12
Futures Contracts and
Options on Futures Contracts. . . . . . . . . 12
Options . . . . . . . . . . . . . . . . . . . . 13
Options on Securities Indices . . . . . . . . . 14
Collateralized Mortgage Obligations . . . . . . 14
Lending Portfolio Securities. . . . . . . . . . 14
Other Information . . . . . . . . . . . . . . . 14
The Fund and Its Management. . . . . . . . . . . . . 14
Investment Adviser. . . . . . . . . . . . . . . 15
Advisory Fee. . . . . . . . . . . . . . . . . . 15
Expenses. . . . . . . . . . . . . . . . . . . . 15
Capital Stock . . . . . . . . . . . . . . . . . 16
Purchase and Redemption of Shares. . . . . . . . . . 16
Dividends and Distributions. . . . . . . . . . . . . 16
Taxes. . . . . . . . . . . . . . . . . . . . . . . . 17
Custodian, Transfer and
Dividend Disbursing Agent . . . . . . . . . . . 17
Appendix
Bond and Commercial Paper Ratings . . . . . . . 18
THE FUND
Carillon Fund, Inc. (the "Fund"), a Maryland corporation,
is a no-load, diversified, open-end investment company.
The Fund has five Portfolios, which in many ways operate as
separate funds issuing separate classes of common stock. An
interest in the Fund is limited to the assets of the Portfolio
in which shares are held, and shareholders of each Portfolio are
entitled to a pro rata share of all dividends and distributions
arising from the net income and capital gains on the investments
of such Portfolio.
Currently, the shares of the Fund are sold only to The
Union Central Life Insurance Company ("Union Central") and to
certain of its separate accounts to fund the benefits under
certain variable annuity contracts and variable universal life
insurance policies (the "contracts") issued by Union Central.
The separate accounts invest in shares of the Fund in accordance
with allocation instructions received from Contract Owners.
To the extent that the shares of the Fund's Portfolios are
sold to Union Central in order to fund the benefits under the
contracts, the structure of the Fund permits Contract Owners,
within the limitations described in the contracts, to determine
the type of investment underlying their contracts in response to
or in anticipation of changes in market or economic conditions.
Contract Owners should consider that the investment return
experience of the Portfolio or Portfolios they select will
affect the value of the contract and the amount of annuity
payments received under a contract. See the attached Prospectus
for the Union Central contract for a description of the
relationship between increases or decreases in the net asset
value of Fund shares (and any distributions on such shares) and
the benefits provided under a contract.
ANNUAL FUND OPERATING EXPENSES
EXPENSES (as a percentage of average net assets)
<TABLE>
<CAPTION>
S&P 500
Equity Bond Capital Index Micro-Cap
Portfolio Portfolio Portfolio Portfolio Portfolio
- --------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Management Fees .57% .48% .68% .29% 1.00%*
Other Expenses .07% .14% .09% .30% 1.00%*
Total Operating Expenses .64% .62% .77% .59%** 2.00%
</TABLE>
EXAMPLE
The table below shows the amount of expenses a Shareholder
would pay on a $1,000 investment assuming a 5% annual
return.+
<TABLE>
<CAPTION>
1 Year 3 Years 5 Years 10 Years
- ---------------------------------------------------------------------
<S> <C> <C> <C> <C>
Equity Portfolio $7 $21 $36 $80
Bond Portfolio $6 $20 $35 $78
Capital Portfolio $8 $25 $43 $96
S&P 500 Index Portfolio $6 $19 $33 $74
Micro-Cap Portfolio $21 $63 N/A N/A
</TABLE>
The purpose of this table is to assist the Contract Owner
in understanding the various expenses that the Contract Owner
will bear indirectly by providing information on expenses
associated with the Contract's investment in the Fund. This
table does not include any contract or variable account charges.
This table should not be considered a representation of
past or future expenses and the actual expenses that will be
paid may be greater or lesser than those shown.
- ---------------
* "Other Expenses" for the Micro-Cap Portfolio are based on
estimates. Total Operating Expenses in excess of 2.00% for that
Portfolio are paid by the investment adviser.
** Total Operating Expenses in excess of .60% for that
Portfolio are paid by the investment adviser.
+ The 5% annual return is a standardized rate prescribed for
the purpose of this example and does not represent the past or
future return of the Fund.
<PAGE>
FINANCIAL HIGHLIGHTS
The financial information in the tables which follow (pages 4-
6), insofar as it pertains to each of the five years in the
period ended December 31, 1996, have been audited in conjunction
with the annual audit of the financial statements of the Fund .
The financial statements for the year ended December 31, 1996,
have been audited by Deloitte & Touche LLP, whose unqualified
report thereon is included in the Statement of Additional
Information. The financial statements for the year ended
December 31, 1995 have been audited by Deloitte & Touche LLP.
The financial statements for the three years ended December 31,
1994 have been audited by another independent accountant, whose
reports expressed unqualified opinions on those statements.
These financial highlights should be read in conjunction with
the financial statements and notes thereto included in the
Statement of Additional Information. Further information about
the performance of the Fund is contained in the Fund's annual
report which may be obtained without charge. (See "Other
Information" below.)
<TABLE>
<CAPTION>
Equity Portfolio
Year ended December 31,
1996 1995 1994 1993 1992
---------------------------------------------
<S> <C> <C> <C> <C> <C>
Net Asset Value,
Beginning of year $16.54 $14.30 $14.58 $13.74 $12.60
Investment Activities:
Net investment income .29 .24 .20 .16 .19
Net realized and
unrealized gains
(losses) 3.61 3.36 .31 1.69 1.27
------ ------ ------ ------ ------
Total from Investment
Operations 3.90 3.60 .51 1.85 1.46
Distributions:
Net investment income (.27) (.23) (.19) (.16) (.19)
Net realized gains (.72) (1.13) (.60) (.85) (.13)
------ ------ ------ ------ ------
Total Distributions (.99) (1.36) (.79) (1.01) (.32)
Net Asset Value,
End of year $19.45 $16.54 $14.30 $14.58 $13.74
====== ====== ====== ====== ======
Ratios/Supplemental Data:
Total Return <F2> 24.52% 26.96% 3.42% 14.11% 11.78%
Ratio of Expenses to
Average Net Assets .64% .66% .69% .70% .72%
Ratio of Net Investment
Income to
Average Net Assets 1.66% 1.73% 1.45% 1.18% 1.47%
Portfolio
Turnover Rate 52.53% 34.33% 40.33% 37.93% 46.75%
Average Commission
Rate Paid $.0628<F3>
Net Assets,
End of Period
(in thousands) $288,124 $219,563 $157,696 $138,239 $102,306
<CAPTION>
Year Ended December 31,
1991 1990 1989 1988 1987
--------------------------------------------
<S> <C> <C> <C> <C> <C>
Net Asset Value,
Beginning of year $ 8.81 $10.79 $10.88 $ 8.57 $ 9.62
Investment Activities:
Net investment income .20<F1> .28<F1> .58 .38 .34
Net realized and
unrealized gains (losses) 3.79 (1.91) .69 2.33 (.22)
------ ------ ------ ------ ------
Total from Investment
Operations 3.99 (1.63) 1.27 3.71 .12
Distributions:
Net investment income (.20) (.31) (.59) (.34) (.35)
Net realized gains -- (.04) (.77) (.06) (.82)
------ ------ ------ ------ ------
Total Distributions (.20) (.35) (1.36) (.40) (1.17)
Net Asset Value,
End of year $12.60 $ 8.81 $10.79 $10.88 $ 8.57
====== ====== ====== ====== ======
Ratios/Supplemental Data:
Total Return<F2> 45.55% (15.45%) 11.79% 31.79% .85%
Ratio of Expenses to
Average Net Assets .75% .82%<F1> .95% .95% .97%
Ratio of Net Investment
Income to Average
Net Assets 1.79%<F1> 2.98%<F1> 5.34% 3.74% 3.30%
Portfolio Turnover Rate 55.17% 99.90% 61.49% 57.98% 70.17%
Net Assets, End of Period
(in thousands) $79,352 $52,514 $56,194 $37,723 $28,915
<FN>
<F1>
Net of expenses waived by the Adviser of $.002 per share in 1991 and $.01 per
share in 1990.
<F2>
Total Return does not reflect expenses that apply to the separate account or
the related insurance policies. Inclusion of these charges would reduce the
Total Return figures for all periods shown.
<F3>
Represents the dollar amount of commissions paid on portfolio transactions
divided by the total number of shares purchased and sold for which
commissions were charged. Disclosure not required for periods prior to 1996.
</FN>
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
FINANCIAL HIGHLIGHTS
(Continued)
Bond Portfolio
Year ended December 31,
1996 1995 1994 1993 1992
---------------------------------------------
<S> <C> <C> <C> <C> <C>
Net Asset Value,
Beginning of year $11.07 $10.04 $11.30 $10.91 $10.96
Investment Activities:
Net investment income .79 .88 .77 .73 .82
Net realized and
unrealized gains
(losses) (.04) .98 (.95) .54 (.01)
------ ------ ------ ------ ------
Total from Investment
Operations .75 1.86 (.18) 1.27 .81
Distributions:
Net investment income (.87) (.83) (.78) (.73) (.82)
In excess of net
investment income (.04) -- -- -- --
Net realized gains -- -- (.30) (.15) (.04)
------ ------ ------ ------ ------
Total Distributions (.91) (.83) (1.08) (.88) (.86)
Net Asset Value,
End of year $10.91 $11.07 $10.04 $11.30 $10.91
====== ====== ====== ====== ======
Ratios/Supplemental Data:
Total Return<F1> 7.19% 19.03% (1.63%) 11.94% 7.65%
Ratio of Expenses to
Average Net Assets .62% .65% .68% .66% .69%
Ratio of Net Investment
Income to Average
Net Assets 7.24% 7.43% 7.21% 6.65% 7.59%
Portfolio Turnover Rate 202.44% 111.01% 70.27% 137.46% 40.91%
Net Assets,
End of Period
(in thousands) $85,634 $73,568 $55,929 $54,128 $38,557
<CAPTION>
Year ended December 31,
1991 1990 1989 1988 1987
-----------------------------------------------
<S> <C> <C> <C> <C> <C>
Net Asset Value,
Beginning of year $10.10 $10.02 $ 9.82 $ 9.96 $10.51
Investment Activities: .86 .81 .83 .85 .82
Net investment income
Net realized and
unrealized gains (losses) .87 .03 .20 (.13) (.51)
------ ------ ------ ------ ------
Total from Investment
Operations 1.73 .84 1.03 .72 .31
Distributions:
Net investment income (.87) (.76) (.83) (.86) (.86)
In excess of net
investment income -- -- -- -- --
Net realized gains -- -- -- -- --
------ ------ ------ ------ ------
Total Distributions (.87) (.76) (.83) (.86) (.86)
Net Asset Value,
End of year $10.96 $10.10 $10.02 $ 9.82 $ 9.96
====== ====== ====== ====== ======
Ratios/Supplemental Data:
Total Return<F1> 17.89% 8.66% 10.72% 7.36% 3.15%
Ratio of Expenses to
Average Net Assets .73% .79% .86% .82% .72%
Ratio of Net Investment
Income to Average
Net Assets 8.27% 8.57% 8.38% 8.34% 8.34%
Portfolio Turnover Rate 39.82% 110.90% 17.70% 24.11% 80.35%
Net Assets, End of Period
(in thousands) $31,009 $24,446 $15,941 $12,460 $15,796
<FN>
<F1>
Total Return does not reflect expenses that apply to the separate account or
the related insurance policies. Inclusion of these charges would reduce the
Total Return figures for all periods shown.
</FN>
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
FINANCIAL HIGHLIGHTS
(Continued)
Capital Portfolio
Year ended December 31,
-------------------------------------
1996 1995 1994 1993
- -----------------------------------------------------------------
<S> <C> <C> <C> <C>
Net Asset Value:
Beginning of period $13.72 $13.19 $13.81 $12.99
Investment Activities:
Net investment income .63 .64 .52 .43
Net realized and
unrealized gains
(losses) 1.36 1.15 (.39) 1.17
------ ------ ------ ------
Total from
Investment Operations 1.99 1.79 .13 1.60
Distributions:
Net investment income (.57) (.64) (.52) (.42)
Net realized gains (.19) (.62) (.23) (.36)
------ ------ ------ ------
Total Distributions (.76) (1.26) (.75) (.78)
Net Asset Value,
End of period $14.95 $13.72 $13.19 $13.81
====== ====== ====== ======
Ratios/Supplemental
Data:
Total Return<F2> 14.94% 14.28% .94% 12.72%
Ratio of Expenses
to Average
Net Assets .77% .77% .80% .82%
Ratio of Net
Investment Income
to Average
Net Assets 4.42% 4.99% 4.25% 3.31%
Portfolio
Turnover Rate 53.11% 43.83% 41.89% 32.42%
Average Commission
Rate Paid $.0615<F4>
Net Assets,
End of Period
(in thousands) $159,294 $145,623 $119,263 $100,016
<CAPTION>
Year ended December 31, Period Ended
---------------------------December 31,
1992 1991 1990<F1>
- ------------------------------------------------------------------
<S> <C> <C> <C>
Net Asset Value:
Beginning of period $12.82 $10.57 $10.95
Investment Activities:
Net investment income .42 .47 .34
Net realized and
unrealized gains
(losses) .56 2.25 (.40)
------ ------ ------
Total from
Investment Operations .98 2.72 (.06)
Distributions:
Net investment income (.42) (.47) (.32)
Net realized gains (.39) -- --
------ ------ ------
Total Distributions (.81) (.47) (.32)
Net Asset Value,
End of period $12.99 $12.82 $10.57
====== ====== ======
Ratios/Supplemental
Data:
Total Return<F2> 7.93% 26.10% (.54%)
Ratio of Expenses to
Average Net Assets .88% .95% 1.03%<F3>
Ratio of Net
Investment Income
to Average Net Assets 3.49% 4.05% 5.08%3
Portfolio Turnover Rate 39.74% 47.93% 16.02%
Net Assets,
End of Period
(in thousands) $68,674 $41,844 $23,813
<FN>
<F1>
Period from May 1, 1990 (commencement of operations) through December 31,
1990.
<F2>
Total Return does not reflect expenses that apply to the separate account or
the related insurance policies. Inclusion of these charges would reduce the
Total Return figures for all periods shown.
<F3>
Annualized
<F4<
Represents the dollar amount of commissions paid on portfolio transactions
divided by the total number of shares purchased and sold for which
commissions were charged. Disclosure not required for periods prior to 1996.
</FN>
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
FINANCIAL HIGHLIGHTS
(Continued)
S&P 500 Index Portfolio
Year Ended
December 31, 1996<F1>
---------------------
<S> <C>
Net Asset Value, $10.00
Beginning of Year
Investment Activities:
Net investment income .20
Net realized and unrealized
gains/(losses) 2.12
Total from Investment Operations 2.32
Distributions:
Net investment income (.19)
Net realized gains --
------
Total Distributions (.19)
Net Asset Value,
End of Year $12.13
Total Return, not annualized 22.37%
Ratios/Supplemental Data
Ratio of Net Expenses to
Average Net Assets .59%<F2>
Ratio of Net Investment
Income to Average Net Assets 2.14%
Portfolio Turnover Rate 1.09%
Average Commission Rate Paid $.0601<F3>
Net Assets, End of Year (000's) $29,205
_____________
<FN>
<F1> The portfolio commenced operation on December 29, 1995. The
financial highlights table for the period ending December 31, 1995
is not presented because the activity for the period did not round
to $0.01 in any category of the reconciliation of beginning to
ending net asset value per share. The ratios and total return were
all less than 0.1%. The net assets at December 31, 1995 were
$305,148.
<F2> The ratios of net expenses to average net assets would have
increased and net investment income to average net assets would
have decreased by .25% for the year ended December 31, 1996, had
the Adviser not waived a portion of its fee.
<F3> Represents the dollar amount of commissions paid on
portfolio transactions divided by the total number of shares
purchased and sold for which commissions were charged.
</FN>
</TABLE>
<PAGE>
INVESTMENT OBJECTIVES AND POLICIES
Each Portfolio has a different investment objective which it
pursues through separate investment policies. The differences in
objectives and policies among the various Portfolios can be
expected to affect the investment return of each Portfolio and
the degree of market and financial risks to which each Portfolio
is subject. The investment objectives of each Portfolio
(described on the cover of this Prospectus) are fundamental
policies and may not be changed without shareholder approval.
There can be no assurance that the investment objectives of any
Portfolio will be realized.
Equity Portfolio
The investment objectives of the Equity Portfolio are to seek
long-term appreciation of capital with secondary opportunities
for growth in current income, without incurring unduly high
risks. A major portion of the Portfolio will be invested in
common stocks. The Portfolio's investment policy is to seek
special opportunities in securities that are selling at a
discount from theoretical price/earnings ratios and that seem
capable of recovering from their temporary out-of-favor status.
A portion of the Portfolio may be invested in money market
instruments pending investment or to effectively utilize cash
reserves.
Since no one class or type of security at all times affords
the greatest promise of capital appreciation and growth in
income, the Portfolio may invest all or a portion of its assets
in preferred stocks, bonds, convertible preferred stocks,
convertible bonds, and convertible debentures if it is believed
that such investments will further its investment objectives.
When market conditions for equity securities are adverse, and
for temporary defensive purposes, the Portfolio may invest in
Government securities, money market instruments, or other
fixed-income securities, or retain cash or cash equivalents.
However, the Portfolio will remain well invested in equities to
take advantage of stocks' relatively higher long-term potential.
The Equity Portfolio's policy of investing is based upon the
belief that the pricing mechanism of the securities market lacks
total efficiency and has a tendency to inflate prices of some
securities and depress prices of other securities in different
market climates. Management believes that favorable changes in
market prices are more likely to begin when securities are
out-of-favor, price/earnings ratios are relatively low,
investment expectations are limited, and there is little
interest in a particular security or industry. Management
believes that securities with relatively low price/earnings
ratios in relation to their profitability are better positioned
to benefit from favorable but generally unanticipated events
than are securities with relatively high price/earnings ratios
which are more susceptible to unexpected adverse developments.
The current institutionally-dominated market tends to ignore the
numerous second tier issues whose market capitalizations are
below those of a limited number of established large companies.
Although this segment of the market may be more volatile and
speculative, it is expected that a well-diversified Portfolio
represented in this segment of the market has potential
long-term rewards greater than the potential rewards from
investments in more highly capitalized equities.
Bond Portfolio
The investment objectives of the Bond Portfolio are to provide
as high a level of current income as is believed to be
consistent with reasonable investment risk and to seek
preservation and growth of shareholders' capital. In seeking to
achieve these objectives, it is anticipated that the Portfolio
will invest at least 75% of the value of its assets in
publicly-traded straight debt securities rated BBB or Baa or
higher by a nationally recognized rating service such as
Standard & Poor's or Moody's, or obligations issued or
guaranteed by the U.S. Government or its agencies or
instrumentalities or cash and cash equivalents. Up to 25% of the
Bond Portfolio's total assets may be invested in straight debt
securities that are unrated or less than investment-grade bonds,
in convertible debt securities, convertible preferred and
preferred stocks, or other securities.
Debt securities that are unrated or less than investment-grade
bonds are often referred to as "high-yield" bonds because they
generally offer higher interest rates. High-yield bonds run a
higher risk of default. In the case of default, they are more
difficult to sell and could present a liquidity problem to the
Portfolio. (See "Principal Risk Factors," page 9.) As of
February 25, 1997, 24% of the debt securities held by the Bond
Portfolio were unrated or less than investment-grade bonds. For
a more complete discussion of the risk factors associated with
high-yield bonds, see the discussion below under "Principal Risk
Factors," and "Certain Risk Factors Relating to High-Yield,
High-Risk Bonds" in the Statement of Additional Information.
The Bond Portfolio will not directly purchase common stocks.
However, it may retain up to 10% of the value of its
total assets in common stocks acquired either by conversion of
fixed-income securities or by the exercise of warrants attached
thereto.
The Bond Portfolio may also write covered call options on U.S.
Treasury Securities and options on futures contracts for such
securities. See "Options," page 11.
The Bond Portfolio may invest without limit in money market
instruments pending investment in accordance with its
investment policies or when market conditions dictate a
"defensive" investment strategy. To the extent a portion is
invested in commercial paper rated "A" or "Prime" it will be
included in the 75% guideline noted above.
A description of the corporate bond ratings assigned by
Standard & Poor's and Moody's is included in the Appendix.
Capital Portfolio
The Capital Portfolio seeks to obtain the highest total return
through a combination of income and capital appreciation
consistent with the reasonable risks associated with an
investment portfolio of above-average quality. The Capital
Portfolio invests in equity, debt and money market securities.
There are no percentage limitations on the class of securities
in which the Capital Portfolio may invest. The Capital Portfolio
may invest entirely in equity securities, entirely in debt,
entirely in money market instruments, or in any combination of
these type of securities at the sole discretion of the
investment adviser, subject only to the investment objective of
the Capital Portfolio and the policies adopted by the Board of
Directors. The investment adviser determines the proportion of
Capital Portfolio assets invested in equity, debt and money
market securities based on fundamental value analysis; analysis
of historical long-term returns among equity, debt and money
market investments; and other market influencing factors. The
fundamental value analysis considers the adviser's outlook over
both the near and long-term, for corporate profitability, short
and long-term interest rates, stock price earnings ratios for
the market in total and individual stocks and inflation rates.
When the investment climate as indicated by the fundamental
factors is near historical relationships, the Portfolio will be
structured approximately 63% in equity, 30% in debt and 7% in
money market securities. In addition, market influencing factors
relating to monetary policy, equity momentum, market sentiment,
economic influences and market cycles are taken into
consideration in making the asset allocation decision.
Deviations from historical fundamental market relationships on
either a current or anticipated basis, along with the influences
of market factors, may result under most foreseeable
circumstances in changes as much as 40%, plus or minus, in the
percentages allocated to equity, debt or money market securities
within the Portfolio.
Equity Securities. In its equity investments, the Capital
Portfolio emphasizes a combination of several themes in order to
diversify its investment exposure. Most stocks purchased by the
Portfolio display one or more of the following criteria:
* Low price earnings ratios in relation to their return on
equity.
* High asset values in relation to stock price.
* Foreign securities of companies judged to represent better
fundamental value than those of similar domestic companies.
* A high level of dividend payment providing a yield that is
competitive with debt investments.
Debt Securities. The Capital Portfolio may invest in rated or
unrated debt securities, including obligations of the U.S.
Government and its agencies, and corporate debt obligations
rated BBB or Baa or higher by a nationally recognized rating
service such as Standard & Poor's or Moody's, or, if not rated,
of equivalent quality as determined by the investment adviser.
Only 25% of the value of any bonds held by the Capital Portfolio
may be unrated or less than investment-grade bonds. For a
discussion of the risk factors associated with "high-yield"
bonds, see the "Bond Portfolio" on page 7 and "Certain Risk
Factors Relating to High-Yield, High-Risk Bonds" in the
Statement of Additional Information.
Money Market Instruments. The Capital Portfolio may at any
time be 100% invested in money market instruments although it
likely will invest in these securities only temporarily pending
investment in equity and debt securities, or on a limited basis.
The following securities, which are described in the Statement
of Additional Information, are considered money market
instruments if their remaining maturities are less than 13
months: repurchase agreements, U.S. government obligations,
government agency securities, certificates of deposit, time
deposits, bankers' acceptances, commercial paper and corporate
debt securities.
The Capital Portfolio may also write covered call options on
U.S. Treasury Securities and options on futures contracts for
such securities. See "Options," page 11.
S&P 500 Index Portfolio
The S&P 500 Index Portfolio ("Index Portfolio") seeks
investment results that correspond to the total return
performance of U.S. common stocks, as represented by the
Standard & Poor's 500 Composite Stock Index (the "S&P 500"**).
The S&P 500 is a well-known stock market index that includes
common stocks of companies representing approximately 70% of the
market value of all common stocks publicly traded in the United
States. The investment adviser believes that the performance of
the S&P 500 is representative of the performance of publicly
traded common stocks in general. As with all mutual funds,
there can be no assurance that the Index Portfolio will achieve
its investment objective.
- ------
**The S&P 500 is an unmanaged index of common stocks comprised
of 500 industrial, financial, utility and transportation
companies. "Standard & Poor's(R)", "S&P(R)", "S&P 500(R)",
"Standard & Poor's 500(R)", and "500" are trademarks of The
McGraw-Hill Companies, Inc. and have been licensed for use by
Carillon Fund. The Portfolio is not sponsored, endorsed, sold or
promoted by Standard & Poor's ("S&P"). S&P makes no
representation or warranty, express or implied, to the
beneficial owners of the Portfolio or any member of the public
regarding the advisability of investing in securities generally
or in the Portfolio particularly or the ability of the S&P 500
Index to track general stock market performance. S&P's only
relationship to Carillon Fund is the licensing of certain
trademarks and trade names of S&P and of the S&P 500 Index which
is determined, composed and calculated by S&P without regard to
Carillon Fund or the Portfolio. S&P has no obligation to take
the needs of Carillon Fund or the beneficial owners of the
Portfolio into consideration in determining, composing or
calculating the S&P 500 Index. S&P is not responsible for and
has not participated in the determination of the prices and
amount of the Portfolio or the timing of the issuance or sale of
the Portfolio or in the determination or calculation of the
equation by which the Portfolio is to be converted into cash.
S&P has no obligation or liability in connection with the
administration, marketing or trading of the Portfolio.
S&P DOES NOT GUARANTEE THE ACCURACY AND/OR THE COMPLETENESS OF
THE S&P 500 INDEX OR ANY DATA INCLUDED THEREIN AND S&P SHALL
HAVE NO LIABILITY FOR ANY ERRORS, OMISSIONS, OR INTERRUPTIONS
THEREIN. S&P MAKES NO WARRANTY, EXPRESS OR IMPLIED, AS TO
RESULTS TO BE OBTAINED BY CARILLON FUND, BENEFICIAL OWNERS OF
THE PORTFOLIO, OR ANY OTHER PERSON OR ENTITY FROM THE USE OF THE
S&P 500 INDEX OR ANY DATA INCLUDED THEREIN. S&P MAKES NO EXPRESS
OR IMPLIED WARRANTIES, AND EXPRESSLY DISCLAIMS ALL WARRANTIES OF
MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR USE WITH
RESPECT TO THE S&P 500 INDEX OR ANY DATA INCLUDED THEREIN.
WITHOUT LIMITING ANY OF THE FOREGOING, IN NO EVENT SHALL S&P
HAVE ANY LIABILITY FOR ANY SPECIAL, PUNITIVE, INDIRECT, OR
CONSEQUENTIAL DAMAGES (INCLUDING LOST PROFITS), EVEN IF NOTIFIED
OF THE POSSIBILITY OF SUCH DAMAGES.
Index funds, such as the Index Portfolio, seek to create, to
the extent feasible, a portfolio which substantially replicates
the total return of the securities comprising the applicable
index, taking into consideration redemptions, sales of
additional shares, and other adjustments described below. Index
funds are not managed through traditional methods of fund
management, which typically involve frequent changes in a
portfolio of securities on the basis of economic, financial, and
market analyses. Therefore, brokerage costs, transfer taxes,
and certain other transaction costs for index funds may be lower
than those incurred by non-index, traditionally managed funds.
Precise replication of the holdings of the Index Portfolio and
the capitalization weighting of the securities in the S&P 500 is
not feasible, but the Index Portfolio seeks a high correlation
between the total return performance of securities comprising
the S&P 500 and the investment results of the Index Portfolio.
The Index Portfolio will attempt to achieve, in both rising and
falling markets, a correlation of at least 95% between the total
return of its net assets before expenses and the total return of
the S&P 500. A correlation of 100% would represent perfect
correlation between Index Portfolio and index performance. It
is anticipated that the correlation of the Index Portfolio's
performance to that of the S&P 500 will increase as the size of
the Index Portfolio increases. There can be no assurance that
the Index Portfolio will achieve this correlation.
The Index Portfolio may invest up to 10% of its assets in
Standard & Poor's Depositary Receipts(R) ("SPDRs(R)").
SPDRs are units of beneficial interest in a unit investment
trust, representing proportionate undivided interests in a
portfolio of securities in substantially the same weighting as
the component common stocks of the S&P 500.
Although the Adviser will attempt to invest as much of the
Index Portfolio's assets as is practical in stocks comprising
the S&P 500 and futures contracts and options relating thereto,
a portion of the Index Portfolio may be invested in money market
instruments pending investment or to meet redemption requests or
other needs for liquid assets. In addition, for temporary
defensive purposes, the Index Portfolio may invest in Government
securities, money market instruments, or other fixed-income
securities, or retain cash or cash equivalents.
Micro-Cap Portfolio
The Micro-Cap Portfolio seeks long-term appreciation of
capital by investing primarily in the common stocks of domestic
companies with smaller market capitalizations. The Portfolio
seeks to achieve this objective by investing at least 70% of its
assets in common stocks of companies with market capitalizations
of less than $250 million at the time of initial purchase and
that management believes are undervalued in the marketplace.
Current income from dividends, interest and other sources is
only sought when consistent with the Portfolio's primary
objective. The Portfolio generally invests the remaining 30% of
its total assets in a similar manner, but may invest those in
other equity securities including foreign securities. A portion
of the Portfolio may be invested in money market instruments
pending investment or to utilize cash reserves.
Management believes that opportunities for excess returns
exist in the micro capitalization sector of the equity markets
due to the lack of institutional ownership, insufficient analyst
coverage, and the relatively lower level of many of these
securities. Individual security selection will focus on
companies which possess above-average levels of profitability,
revenue growth and earnings growth that are selling at
price/earnings ratios below their internal growth rate. A
significant emphasis will be placed on technical analysis in an
effort to identify when a recognition of value will occur in the
marketplace. Investments in the securities of companies with
small market capitalization may involve special risks. See
"Principal Risk Factors."
Principal Risk Factors
Because the Portfolios are intended to serve a variety of
investment objectives, they are subject to varying degrees of
financial and market risks and current income volatility.
Financial risk refers to the ability of an issuer of a debt
security to pay principal and interest on that security and to
the earning stability and overall financial soundness of an
issuer of an equity security. Market risk refers to the
volatility of the reaction of the price of the security to
changes in conditions in the securities markets in general and,
with respect to debt securities, changes in the overall level of
interest rates. Current income volatility refers to the degree
and rapidity with which changes in the overall level of interest
rates become reflected in the level of current income of the
portfolio.
The Equity Portfolio should be subject to moderate levels of
both market and financial risk, since it invests in equity
securities chosen primarily for potential long-term
appreciation.
The Bond Portfolio invests most of its assets in investment-
grade corporate bonds, and these should be subject to little
financial risk, to moderately high levels of market risk, and to
moderately low current income volatility.
The Capital Portfolio invests in equity, debt and money market
instruments, and therefore the financial and market risks
to which it is subject will vary from time to time depending on
the extent of its holdings in each of those classes of
securities.
The Portfolio is subject to the further risk that in order to
meet its objectives, the Adviser must determine the proper mix
of equity, debt and money market securities. Moreover, the
timing of movements from one type of security to another could
have a negative effect on the Portfolio's overall objective.
Inherent in the fact that the Adviser has great latitude with
respect to portfolio composition is the risk that it may not
properly ascertain the appropriate mix of securities for any
particular economic cycle.
The market value of fixed-income debt securities is affected
by changes in general market interest rates. If interest rates
fall, the market value of fixed-income securities tends to rise;
but if interest rates rise, the value of fixed-income securities
tends to fall. This market risk affects all fixed-income
securities, but lower-rated and unrated securities may be
subject to a greater market risk than higher-rated (lower-yield)
securities.
Bonds rated below the four highest grades used by Standard &
Poor's or Moody's are frequently referred to as "junk"
bonds, reflecting the greater market and investment risks
associated with such bonds. Such risks relate not only to the
greater financial weakness of the issuers of such securities but
also to other factors including: (i) the sensitivity of such
securities to interest rates and economic changes (high-yield,
high-risk bonds are very sensitive to adverse economic and
corporate developments; their yields will fluctuate over time
and either an economic downturn or rising interest rates could
create financial stress on the issuers of such bonds, possibly
resulting in their defaulting on their obligations); (ii) the
payment expectations of holders of such securities (high-yield,
high-risk bonds may contain redemption or call provisions which
if exercised in a period of lower interest rates would result in
their being replaced by lower yielding securities); (iii) the
liquidity of such securities (there may be little trading in
certain high-yield, high-risk bonds which may make it more
difficult to dispose of the securities and more difficult to
determine their fair value). See "Certain Risk Factors Relating
to High-Yield, High-Risk Bonds" in the Statement of Additional
Information for a further discussion of the risks summarized
above.
The S&P 500 Index Portfolio is subject to equity market risk
(i.e., the possibility that common stock prices will decline
over short or even extended periods). The U.S. stock market
tends to be cyclical, with periods when stock prices generally
rise and periods when stock prices generally decline.
To illustrate the volatility of stock prices, the following
table sets forth the average returns of the S&P 500 for the
period from 1926 to 1996:
<TABLE>
<CAPTION>
S&P 500 Returns (1926-1996)
Over Various Time Horizons
----------------------------
1 Year 5 Years 10 Years 20 Years
----- ------- -------- --------
<S> <C> <C> <C> <C>
Best 54.0% 23.9% 20.1% 16.9%
Worst -43.3% -12.5% -.9% 3.1%
Average 12.6% -- -- --
</TABLE>
Average return may not be useful for forecasting future returns
in any particular period, as stock returns are quite volatile
from year to year.
The Micro-Cap Portfolio is subject to the risk that small
capitalization companies, while offering the potential for rapid
growth, often involve greater risks. Small companies may lack
the depth of management, diversified product offering, financial
resources, and competitive strengths of larger companies. Due to
these and other factors, small companies may suffer significant
losses as well as realize substantial growth. In addition, the
stocks of small capitalization companies may be more volatile
than the stocks of large capitalization companies. Among the
reasons for greater price volatility are lower levels of trading
volume and wider spreads between the bid and asked prices of
these securities. The prices of the shares of small
capitalization companies may move independently of the values of
larger capitalization companies such as those which comprise the
Dow Jones Industrial Average and the Standard and Poor's 500
Stock Index.
Investment in Foreign Securities
Each Portfolio may invest in foreign securities that are
suitable for the Portfolio's investment objectives and policies.
Foreign securities investments are limited to 25% of net assets
for the Equity and Bond Portfolios and to 35% of net assets for
the Capital Portfolio. The S&P 500 Index Portfolio is limited to
investing in those foreign securities included in the Standard &
Poor's 500 Composite Stock Index. The term "foreign securities"
refers to equity and debt securities of corporate issuers whose
principal stock or bond exchange listing is outside of the
United States, to American Depositary Receipts ("ADRs") that
hold such securities, and to debt securities issued by foreign
governments or foreign government agencies.
Investing in foreign securities involves risks which are
not ordinarily associated with investing in domestic securities.
These risks include political or economic instability in the
foreign country, diplomatic developments that could adversely
affect the value of the foreign security, foreign government
taxes, the costs incurred by a Portfolio in converting among
various currencies, fluctuation in currency exchange rates and
the possibility of imposition of currency controls,
expropriation or nationalization measures or withholding
dividends at the source. In the event of a default on any
foreign obligation, it may be difficult legally to obtain or to
enforce a judgment against the issuer.
Currency exchange rates are determined by forces of supply
and demand. These forces are affected by international balance
of payments, other economic and financial conditions, government
intervention and other factors. The ability of a foreign
obligor to make timely payments on its external debt obligations
will be strongly influenced by the country's balance of
payments, including export performance, its access to
international credits and investments, fluctuations in interest
rates and the extent of its foreign reserves.
There may be less publicly available information about a
foreign issuer than about a domestic issuer. Foreign issuers
are subject to accounting and reporting requirements which are
generally less extensive than those applicable to domestic
issuers. Securities of foreign issuers are generally less liquid
and more volatile than those of comparable domestic issuers.
There is frequently less governmental regulation of exchanges,
broker-dealers and issuers and brokerage costs may be higher
than in the United States.
Foreign securities other than ADRs typically will be traded
on the applicable country's principal stock or bond exchange but
may also be traded on regional exchanges or over-the-counter.
Foreign markets, especially emerging markets, may have different
clearance and settlement procedures, and in certain markets
there have been times when settlements have been unable to keep
pace with the volume of securities transactions, making it
difficult to conduct such transactions.
A country whose exports are concentrated in a few
commodities or whose economy depends on certain strategic
imports could be vulnerable to fluctuations in international
prices of these commodities or imports. To the extent that a
country receives payment for its exports in currencies other
than dollars, its ability to make debt payments denominated in
dollars could be adversely affected.
ADRs are receipts, typically issued by a U.S. bank or trust
company, evidencing ownership of the underlying foreign
securities. ADRs are denominated in U.S. dollars and trade in
the U.S. securities markets. ADRs are subject to certain of the
same risks as direct investment in foreign securities, including
the risk that changes in the value of the currency in which the
security underlying an ADR is denominated relative to the U.S.
dollar may adversely affect the value of the ADR.
Foreign securities purchased by the Portfolios may include
securities issued by companies located in countries not
considered to be major industrialized nations. Such countries
are subject to more economic, political and business risk than
major industrialized nations, and the securities they issue are
expected to be more volatile and more uncertain as to payments
of interest and principal. The secondary market for such
securities is expected to be less liquid than for securities of
major industrialized nations.
To limit the risks of investing in any one country, each
Portfolio that invests in foreign securities limits not only its
total purchases of foreign securities, but also its purchases
for any single country. For "major countries," the applicable
limit is 10% of Portfolio net assets for the Equity, Bond and
Micro-Cap Portfolios and 20% for the Capital Portfolio; for
other countries, the applicable limit is 5% for each Portfolio.
"Major countries" currently include: The United Kingdom,
Germany, France, Italy, Switzerland, Netherlands, Spain,
Belgium, Canada, Mexico, Argentina, Chile, Brazil, Australia,
Japan, Singapore, New Zealand, Hong Kong, Sweden and Norway.
Foreign Currency Transactions
Each Portfolio that purchases foreign securities may also
engage in forward foreign currency contracts ("forward
contracts") in connection with the purchase or sale of a
specific security. A forward contract involves an obligation to
purchase or sell a specific foreign currency at a future date,
which may be any fixed number of days from the date of the
contract agreed upon by the parties, at a price set at the time
of the contract. These contracts are traded in the interbank
market conducted directly between currency traders (usually
large commercial banks) and their customers. A forward contract
generally has no margin or other deposit requirement.
Portfolios will not enter into forward contracts for
longer-term hedging purposes. The possibility of changes in
currency exchange rates will be incorporated into the long-term
investment considerations when purchasing the investment and
subsequent considerations for possible sale of the investment.
Repurchase Agreements
A repurchase agreement is a transaction where a Portfolio
buys a security at one price and simultaneously agrees to sell
that same security back to the original owner at a higher price.
The Adviser reviews the creditworthiness of the other party to
the agreement and must find it satisfactory before engaging in a
repurchase agreement. A majority of such agreements will mature
in seven days or less. In the event of the bankruptcy of the
other party, the Portfolio could experience delays in recovering
its money, may realize only a partial recovery or even no
recovery, and may also incur disposition costs. It is not
anticipated that any Portfolio will regularly utilize repurchase
agreements extensively, since they are intended to be used to
invest otherwise idle cash.
Reverse Repurchase Agreements
The S&P 500 Index Portfolio may enter into reverse
repurchase agreements. Under reverse repurchase agreements, the
Portfolio transfers possession of portfolio securities to banks
in return for cash in an amount equal to a percentage of the
portfolio securities' market value and agrees to repurchase the
securities at a future date by repaying the cash with interest.
The Portfolio retains the right to receive interest and
principal payments from the securities while they are in the
possession of the financial institutions. Cash or liquid high
quality debt obligations from the Portfolio's portfolio equal in
value to the repurchase price (including any accrued interest)
will be segregated by the Custodian on the Portfolio's records
while a reverse repurchase agreement is in effect.
Futures Contracts and Options on Futures Contracts
For hedging purposes, including protecting the price or
interest rate of securities that the Portfolio intends to buy,
the S&P 500 Index Portfolio may enter into futures contracts
that relate to securities in which it may directly invest and
indices comprised of such securities and may purchase and write
call and put options on such contracts. As a temporary
investment strategy until the Index Portfolio reaches $25
million in net assets, the Index Portfolio may invest up to 100%
of its assets in such futures and/or options contracts.
Thereafter, the Portfolio may invest up to 20% of its assets in
such futures and/or options contracts.
A financial futures contract is a contract to buy or sell a
specified quantity of financial instruments such as U.S.
Treasury bills, notes and bonds, commercial paper and bank
certificates of deposit or the cash value of a financial
instrument index at a specified future date at a price agreed
upon when the contract is made. A stock index futures contract
is a contract to buy or sell specified units of a stock index at
a specified future date at a price agreed upon when the contract
is made. The value of a unit is based on the current value of
the contract index. Under such contracts no delivery of the
actual stocks making up the index takes place. Rather, upon
expiration of the contract, settlement is made by exchanging
cash in an amount equal to the difference between the contract
price and the closing price of the index at expiration, net of
variation margin previously paid.
Substantially all futures contracts are closed out before
settlement date or called for cash settlement. A futures
contract is closed out by buying or selling an identical
offsetting futures contract. Upon entering into a futures
contract, the Portfolio is required to deposit an initial margin
with the Custodian for the benefit of the futures broker. The
initial margin serves as a "good faith" deposit that the
Portfolio will honor their futures commitments. Subsequent
payments (called "variation margin") to and from the broker are
made on a daily basis as the price of the underlying investment
fluctuates. In the event of the bankruptcy of the futures
broker that holds margin on behalf of the Portfolio, the
Portfolio may be entitled to return of margin owed to it only in
proportion to the amount received by the broker's other
customers. The Adviser will attempt to minimize this risk by
monitoring the creditworthiness of the futures brokers with
which the Portfolio does business.
Because the value of index futures depends primarily on the
value of their underlying indexes, the performance of the
broad-based contracts will generally reflect broad changes in
common stock prices. However, because the Portfolio may
not be invested in precisely the same proportion as the S&P 500,
it is likely that the price changes of the Portfolio's index
futures positions will not match the price changes of the
Portfolio's other investments.
Options on futures contracts give the purchaser the right
to assume a position at a specified price in a futures contract
at any time before expiration of the option contract.
Options
The Bond and Capital Portfolios may engage in certain
limited options strategies as hedging techniques. These options
strategies are limited to selling/writing call option contracts
on U.S. Treasury Securities and call option contracts on futures
on such securities held by the Portfolio (covered calls). The
Portfolio may purchase call option contracts to close out a
position acquired through the sale of a call option. The
Portfolio will only write options that are traded on a domestic
exchange or board of trade.
The S&P 500 Index Portfolio may write and purchase covered
put and call options on securities in which it may directly
invest. Option transactions of the Portfolio will be conducted
so that the total amount paid on premiums for all put and call
options outstanding will not exceed 5% of the value of the
Portfolio's total assets. Further, the Portfolio will not
write put or call options or combination thereof if, as a
result, the aggregate value of all securities or collateral used
to cover
its outstanding options would exceed 25% of the value of the
Portfolio's total assets.
A call option is a short-term contract (generally nine
months or less) which gives the purchaser of the option the
right to purchase from the seller of the option (the Portfolio)
the underlying security or futures contract at a fixed exercise
price at any time prior to the expiration of the option period
regardless of the market price of the underlying instrument
during the period. A futures contract obligates the buyer to
purchase and the seller to sell a predetermined amount of a
security at a predetermined price at a selected time in the
future. A call option on a futures contract gives the purchaser
the right to assume a "long" position in a futures contract,
which means that if the option is exercised the seller of the
option (the Portfolio) would have the legal right (and
obligation) to sell the underlying security to the purchaser at
the specified price and future time.
As consideration for the call option, the buyer pays the
seller (the Portfolio) a premium, which the seller retains
whether or not the option is exercised. The selling of a call
option will benefit the Portfolio if, over the option period,
the
underlying security or futures contract declines in value or
does not appreciate to a price higher than the total of the
exercise
price and the premium. The Portfolio risks an opportunity loss
of profit if the underlying instrument appreciates to a price
higher than the exercise price and the premium. When the Adviser
anticipates that interest rates will increase, the Portfolio
may write call options in order to hedge against an expected
decline in value of portfolio securities.
The Portfolio may close out a position acquired through
selling a call option by buying a call option on the same
security or futures contract with the same exercise price and
expiration date as the option previously sold. A profit or loss
on the transaction will result depending on the premium paid for
buying the closing call option. If a call option on a futures
contract is exercised, the Portfolio intends to close out the
position immediately by entering into an offsetting transaction
or by delivery of the underlying security (or other related
securities).
Options transactions may increase the Portfolio's portfolio
turnover rate and attendant transaction costs, and may
be somewhat more speculative than other investment strategies.
It may not always be possible to close out an options position,
and with respect to options on futures contracts there is a risk
of imperfect correlation between price movements of a futures
contract (or option thereon) and the underlying security.
Options strategies and related risks and limitations are
described in more detail in the Statement of Additional
Information.
Options on Securities Indices
The S&P 500 Index Portfolio may purchase or sell options on
the S&P 500, subject to the limitations set forth above
and provided such options are traded on a national securities
exchange or in the over-the-counter market. Options on
securities indices are similar to options on securities except
there is no transfer of a security and settlement is in cash. A
call option on a securities index grants the purchaser of the
call, for a premium paid to the seller, the right to receive in
cash an amount equal to the difference between the closing value
of the index and the exercise price of the option times a
multiplier established by the exchange upon which the option is
traded.
Collateralized Mortgage Obligations
The Portfolios other than the S&P 500 Index Portfolio may
invest in collateralized mortgage obligations ("CMOs")
or mortgage-backed bonds issued by financial institutions such
as commercial banks, savings and loan associations, mortgage
banks and securities broker-dealers (or affiliates of such
institutions established to issue these securities). To a
limited extent, the Portfolios may also invest in a variety of
more risky CMOs, including interest only ("IOs"), principal only
("Pos"), inverse floaters, or a combination of these securities.
See "Money Market Instruments and Investment Techniques" in the
Statement of Additional Information for a further discussion.
Lending Portfolio Securities
The S&P 500 Index Portfolio may lend portfolio securities
with a value up to 10% of its total assets. Such loans
may be terminated at any time. The Portfolio will continuously
maintain as collateral cash or obligations issued by the U.S.
government, its agencies or instrumentalities in an amount equal
to not less than 100% of the current market value (on a daily
marked-to-market basis) of the loaned securities plus declared
dividends and accrued interest.
The Portfolio will retain most rights of beneficial
ownership, including the right to receive dividends, interest or
other distributions on loaned securities. The Portfolio will
call loans to vote proxies if a material issue affecting the
investment is to be voted upon. Should the borrower of the
securities fail financially, the Portfolio may experience delay
in recovering the securities or loss of rights in the
collateral. Loans are to be made only to borrowers that are
deemed by the Adviser to be of good financial standing.
Other Information
In addition to the investment policies described above,
each Portfolio's investment program is subject to further
restrictions which are described in the Statement of Additional
Information. Unless otherwise specified, each Portfolio's
investment objectives, policies and restrictions are not
fundamental policies and may be changed without shareholder
approval. Shareholder inquiries and requests for the Fund's
annual report should be directed to the Fund at (513) 595-2600,
or at P.O. Box 40409, Cincinnati, Ohio 45240-0409.
THE FUND AND ITS MANAGEMENT
The Fund is a mutual fund, technically known as an
open-end, diversified, management investment company. The Board
of Directors is responsible for supervising the business affairs
and investments of the Fund, which are managed on a daily basis
by the Fund's investment adviser. The Fund was incorporated
under the laws of the State of Maryland on January 30, 1984. The
Fund is a series fund with five classes of stock, one for each
Portfolio. The Micro-Cap Portfolio was authorized on June 16,
1997 and commenced operations on November 15, 1997. It is
anticipated that Union Central will invest approximately $3
million in this Portfolio, but it reserves the right to redeem
any portion or all of its investment at any time.
Investment Adviser
The Fund's investment adviser is Carillon Advisers, Inc.
(the "Adviser"), P.O. Box 40407, Cincinnati, Ohio 45240. The
Adviser was incorporated under the laws of Ohio on August 18,
1986, as successor to the advisory business of Carillon
Investments, Inc., the investment adviser for the Fund since
1984. The Adviser is a wholly-owned subsidiary of Union Central,
a mutual life insurance company organized in 1867 under the laws
of Ohio. Subject to the direction and authority of the Fund's
Board of Directors, the Adviser manages the investment and
reinvestment of the assets of each Portfolio and provides
administrative services and manages the Fund's business affairs.
George L. Clucas has been primarily responsible for the
day-to-day management of the Equity Portfolio since 1988
and the Capital Portfolio since its inception in 1990. Mr.
Clucas is Director, President and Chief Executive Officer of the
Fund, and President and Chief Executive Officer of the Adviser.
He has been affiliated with the Adviser and Union Central since
1987. Steven R. Sutermeister (since 1990) has been primarily
responsible for the day-to-day management of the Bond Portfolio.
Mr. Sutermeister is Vice President of the Adviser and has been
affiliated with the Adviser and Union Central since 1990.
Previously, he was Senior Vice President of Washington Square
Capital, Inc. Gary R. Rodmaker has been primarily responsible
for the day-to-day management of the S&P 500 Index Portfolio
since its inception. Mr. Rodmaker is the Fixed Income Portfolio
Manager of the Adviser and has been affiliated with the Adviser
and Union Central since 1989. Michelle E. Stevens has been
primarily responsible for the day-to-day management of the
Micro-Cap Portfolio since its inception. Mrs. Stevens is the
Senior Equity Analyst of the Adviser and has been affiliated
with the Adviser and Union Central since 1993.
Advisory Fee
The Fund pays the Adviser, as full compensation for all
facilities and services furnished, a monthly fee computed
separately for each Portfolio on a daily basis, at an annual
rate, as follows:
(a) for the Equity Portfolio- .65% of the first $50,000,000,
.60% of the next $100,000,000, and .50% of all over
$150,000,000 of the current value of the net assets;
(b) for the Bond Portfolio- .50% of the first $50,000,000,
.45% of the next $100,000,000, and .40% of all over
$150,000,000 of the current value of the net assets; and
(c) for the Capital Portfolio- .75% of the first $50,000,000,
.65% of the next $100,000,000, and .50% of all over
$150,000,000 of the current value of the net assets.
(d) for the S&P 500 Index Portfolio- .30% of the current
value of the net assets.
(e) for the Micro-Cap Portfolio- 1.00% of the current
value of the net assets.
The fee paid for the Capital Portfolio is somewhat higher than
the average fee paid in the industry. However, breakpoints at
which fees are reduced are set at lower than normal amounts. It
is the desire of the Fund and Adviser to reflect in the fee
arrangement the effort involved in advising the separate
Portfolios.
Expenses
The Fund's expenses are deducted from total income before
dividends are paid. These expenses, which are accrued
daily, include: the fee of the Adviser; taxes; legal, dividend
disbursing, bookkeeping and transfer agent, custodian and
auditing fees; and printing and other expenses relating to the
Fund's operations which are not expressly assumed by the
Adviser under its investment advisory agreement with the Fund.
Certain expenses are paid by the particular Portfolio that
incurs them, while other expenses are allocated among the
Portfolios on the basis of their relative size (i.e., the amount
of their net assets). The Adviser will pay any expenses of the
S&P 500 Index Portfolio, other than the advisory fee for that
Portfolio, to the extent that such expenses exceed .30% of that
Portfolio's net assets. The Adviser will also pay any expenses
of the Micro-Cap Portfolio, other than the advisory fee for that
Portfolio, to the extent that such expenses exceed 1.00% of that
Portfolio's net assets.
Capital Stock
The Fund currently has five classes of stock, one for each
Portfolio. Shares (including fractional shares) of each
Portfolio have equal rights with regard to voting, redemptions,
dividends, distributions, and liquidations with respect to that
Portfolio. When issued, shares are fully paid and nonassessable
and do not have preemptive or conversion rights or cumulative
voting rights. The Fund's sole shareholder, Union Central, will
vote Fund shares allocated to its registered separate accounts
in accordance with instructions received from Contract Owners.
However, by virtue of Fund shares allocated to its other
separate accounts, Union Central currently has voting control
and can make fundamental changes regardless of the voting
instructions received from Contract Owners.
PURCHASE AND REDEMPTION OF SHARES
The Fund offers its shares, without sales charge, only for
purchase by Union Central and its separate accounts to fund
benefits under both variable annuity contracts and variable
universal life insurance policies. The Fund's Board of Directors
will monitor the Fund for the existence of any material
irreconcilable conflict between the interests of variable
annuity contractowners investing in the Fund and interests of
holders of variable universal life insurance policies investing
in the Fund. Union Central will report any potential or
existing conflicts to the Directors of the Fund. If a material
irreconcilable conflict arises, Union Central will, at its own
cost, remedy such conflict up to and including establishing a
new registered management company and segregating the assets
underlying the variable annuity contracts and variable universal
life insurance policies. It is possible that at some later date
the Fund may offer shares to other investors. The Fund
continuously offers shares in each of its Portfolios at prices
equal to the respective net asset values of the shares of each
Portfolio.
The Fund redeems all full and fractional shares of the Fund
for cash. No redemption fee is charged. The redemption
price is the net asset value per share. Payment for shares
redeemed will generally be made within seven days after receipt
of a proper notice of redemption.
The net asset value of the shares of each Portfolio of the
Fund is determined once daily, Monday through Friday, as of the
close of regular trading on the New York Stock Exchange
(normally 4:00 p.m., Eastern Time), when there are purchases or
redemptions of Fund shares, except (i) when the New York Stock
Exchange is closed (currently New Year's Day, President's Day,
Good Friday, Memorial Day, Independence Day, Labor Day,
Thanksgiving Day, and Christmas Day); and any day on which
changes in the value of the Portfolio securities of the Fund
will not materially affect the current net asset value of the
shares of a Portfolio. Such determination is made by adding the
values of all securities and other assets of the Portfolio,
subtracting liabilities and expenses, and dividing by the number
of shares of the Portfolio outstanding. Expenses, including the
investment advisory fee payable to the Adviser, are accrued
daily.
Securities held by the Portfolios, except for money market
instruments maturing in 60 days or less, are valued at their
market value if market quotations are readily available.
Otherwise, such securities are valued at fair value as
determined in good faith by the Board of Directors, although the
actual calculations may be made by persons acting pursuant to
the direction of the Board.
All money market instruments with a remaining maturity of 60
days or less are valued on an amortized cost basis.
DIVIDENDS AND DISTRIBUTIONS
It is the Fund's intention to distribute substantially all of
the net investment income, if any, of each Portfolio. For
dividend purposes, net investment income of the Equity, Bond,
Capital, S&P 500 Index and Micro-Cap Portfolios consists of all
dividends or interest earned by such Portfolio less estimated
expenses (including the investment advisory fee). All net
realized capital gains, if any, of each Portfolio are
distributed periodically, no less frequently than annually. All
dividends and distributions are reinvested in additional shares
of the respective Portfolio at net asset value.
TAXES
Each Portfolio has qualified and has elected to be taxed as a
"regulated investment company" under the provisions of
Subchapter M of the Internal Revenue Code of 1986, as amended
(the "Code"). If a Portfolio qualifies as a "regulated
investment company" and complies with the appropriate provisions
of the Code, the Portfolio will be relieved of federal income
tax on the amounts distributed.
Since the sole shareholder of the Fund is Union Central, no
discussion is included herein as to the federal income tax
consequences at the shareholder level. For information
concerning the federal tax consequences to purchasers of the
contracts, see the attached Prospectus for such contracts.
CUSTODIAN, TRANSFER AND DIVIDEND DISBURSING AGENT
Firstar Trust Company, Mutual Fund Services, P.O. Box 701,
Milwaukee, Wisconsin 53201-0701, acts as Custodian of the Fund's
assets, and is its bookkeeping, transfer and dividend disbursing
agent.
APPENDIX
CORPORATE BOND RATINGS
Moody's Investors Services, Inc.
Aaa Bonds which are rated Aaa are judged to be of the best
quality. They carry the smallest degree of investment risk
and are generally referred to as "gilt-edge." Interest payments
are protected by a large or by an exceptionally stable margin
and principal is secure. While the various protective elements
are likely to change, such changes as can be visualized are most
unlikely to impair the fundamentally strong position of such
issues.
Aa Bonds which are rated Aa are judged to be of high quality
by all standards. Together with the Aaa group they
comprise what are generally known as high-grade bonds. They are
rated lower than the best bonds because margins of
protection may not be as large as in Aaa securities or
fluctuation of protective elements may be of greater amplitude
or there may be other elements present which make the long-term
risks appear somewhat larger than in Aaa securities.
A Bonds which are rated A possess many favorable investment
attributes and are to be considered as upper medium-grade
obligations. Factors giving security to principal and interest
are considered adequate but elements may be present which
suggest a susceptibility to impairment sometime in the future.
Baa Bonds which are rated Baa are considered as medium-grade
obligations, i.e., they are neither highly protected
nor poorly secured. Interest payments and principal security
appear adequate for the present but certain protective elements
may be lacking or may be characteristically unreliable over any
great length of time. Such bonds lack outstanding investment
characteristics and in fact have speculative characteristics as
well.
Ba Bonds which are rated Ba are judged to have speculative
elements; their future cannot be considered as well
assured. Often the protection of interest and principal payments
may be very moderate and thereby not well safeguarded
during both good and bad times over the future. Uncertainty of
position characterizes bonds in this class.
B Bonds which are rated B generally lack characteristics of
the desirable investment. Assurance of interest and
principal payments or of maintenance of other terms of the
contract over any long period of time may be small.
Caa Bonds which are rated Caa are of poor standing. Such
issues may be in default or there may be present elements
of danger with respect to principal or interest.
Ca Bonds which are rated Ca represent obligations which are
speculative in a high degree. Such issues are often in
default or have other marked shortcomings.
Standard & Poor's Corporation
AAA This is the highest rating assigned by Standard & Poor's
to a debt obligation and indicates an extremely strong capacity
to pay principal and interest.
AA Bonds rated AA also qualify as high-quality debt
obligations. Capacity to pay principal and interest is very
strong, and in the majority of instances they differ from AAA
issues only in a small degree.
A Bonds rated A have a strong capacity to pay principal and
interest, although they are somewhat more susceptible
to the adverse effect of changes in circumstances and economic
conditions.
BBB Bonds rated BBB are regarded as having an adequate
capacity to pay principal and interest. Whereas they
normally exhibit protection parameters, adverse economic
conditions or changing circumstances are more likely to lead to
a weakened capacity to pay principal and interest for bonds in
this category than for bonds in the A category.
BB-B-CCC-CC Bonds rated BB, B, CCC, and CC are regarded, on
balance, as predominately speculative with respect
to the issuer's capacity to pay interest and repay principal in
accordance with the terms of the obligation. BB indicates the
lowest degree of speculation and CC the highest degree of
speculation. While such bonds will likely have some quality and
protective characteristics, these are outweighed by large
uncertainties or major risk exposures to adverse conditions.
COMMERCIAL PAPER RATINGS
Moody's Investors Services, Inc.
A Prime rating is the highest commercial paper rating assigned
by Moody's Investors Services, Inc. Issuers rated Prime are
further referred to by use of numbers 1, 2 and 3 to denote
relative strength within this highest classification. Among the
factors considered by Moody's in assigning ratings for an issuer
are the following: (1) management; (2) economic evaluation of
the industry and an appraisal of speculative type risks which
may be inherent in certain areas; (3) competition and customer
acceptance of products; (4) liquidity; (5) amount and quality of
long-term debt; (6) ten-year earnings trends; (7) financial
strength of a parent company and the relationships which exist
with the issuer; and (8) recognition by management of
obligations which may be present or may arise as a result of
public interest questions and preparations to meet such
obligations.
Standard & Poor's Corporation
Commercial paper rated A by Standard & Poor's Corporation has
the following characteristics: Liquidity ratios are better than
the industry average. Long-term senior debt rating is "A" or
better. In some cases, BBB credits may be acceptable. The issuer
has access to at least two additional channels of borrowing.
Basic earnings and cash flow have an upward trend with allowance
made for unusual circumstances. Typically, the issuer's industry
is well established, the issuer has a strong position within its
industry and the reliability and quality of management is
unquestioned. Issuers rated A are further referred to by use of
numbers 1, 2 and 3 to denote relative strength within this
classification.
<PAGE>
PART B
INFORMATION REQUIRED IN A
STATEMENT OF ADDITIONAL INFORMATION
<PAGE>
CARILLON FUND, INC.
- ----------------------------------------------------------
STATEMENT OF ADDITIONAL INFORMATION
November 15, 1997
This Statement of Additional Information is not a
prospectus. Much of the information contained in this Statement
of Additional Information expands upon subjects discussed in the
Prospectus. Accordingly, this Statement should be read in
conjunction with Carillon Fund, Inc.'s ("Fund") current
Prospectus, dated November 15, 1997, which may be obtained by
calling the Fund at (513) 595-2600, or writing the Fund at P.O.
Box 40409, Cincinnati, Ohio 45240-0409.
TABLE OF CONTENTS
Page
Investment Policies (7).................................. 2
Money Market Instruments and Investment Techniques..... 2
Certain Risk Factors Relating to High-Yield, High-Risk Bonds.6
Investments in Foreign Securities........................6
Futures Contracts...................................... 7
Options ............................................... 8
Lending Portfolio Securities........................... 13
Investment Restrictions..................................13
Portfolio Turnover ......................................16
Management of the Fund (13)..............................17
Directors and Officers.................................17
Investment Adviser ....................................19
Payment of Expenses....................................20
Advisory Fee...........................................21
Investment Advisory Agreement..........................21
Administration.........................................22
Service Agreement......................................23
Securities Activities of Adviser.......................23
Determination of Net Asset Value (14)....................24
Purchase and Redemption of Shares (14)...................24
Taxes (15)...............................................25
Portfolio Transactions and Brokerage.....................25
General Information (2)..................................26
Capital Stock .........................................26
Voting Rights..........................................27
Additional Information ................................28
Independent Auditors ....................................28
( ) indicates page on which the corresponding section appears in
the Prospectus.
UCCF 515 11-97
<PAGE>
CARILLON FUND, INC.
- --------------------------------------------------------
INVESTMENT POLICIES
The following specific policies supplement the Fund's
"Investment Objectives and Policies" set forth in the Prospectus.
Money Market Instruments and Investment Techniques
Certain money market instruments and investment techniques
are described below. Money market instruments may be purchased
extensively by the Capital Portfolio. They may also be purchased
by the Equity, Bond, S&P 500 Index ("Index Portfolio") and Micro-
Cap Portfolios to a very limited extent (to invest otherwise idle
cash) or on a temporary basis (if invested in money market
instruments for defensive purposes).
Small Bank Certificates of Deposit. The Fund may invest in
certificates of deposit issued by commercial banks, savings
banks, and savings and loan associations having assets of less
than $1 billion, provided that the principal amount of such
certificates is insured in full by the Federal Deposit Insurance
Corporation ("FDIC"). The FDIC presently insures accounts up to
$100,000, but interest earned above such amount is not insured by
the FDIC.
Repurchase Agreements. A repurchase agreement is an instrument
under which the purchaser (i.e., one of the Portfolios) acquires
ownership of the obligation (the underlying security) and the
seller (the "issuer" of the repurchase agreement) agrees, at the
time of sale, to repurchase the obligation at a mutually agreed
upon time and price, thereby determining the yield during the
purchaser's holding period. This results in a fixed rate of
return insulated from market fluctuations during such period.
The underlying securities will only consist of securities in
which the respective Portfolio may otherwise invest. Repurchase
agreements usually are for short periods, normally under one
week, and are considered to be loans under the Investment Company
Act of 1940. Repurchase agreements will be fully collateralized
at all times and interest on the underlying security will not be
taken into account for valuation purposes. The investments by a
Portfolio in repurchase agreements may at times be substantial
when, in the view of the Adviser, unusual market, liquidity, or
other conditions warrant.
If the issuer of the repurchase agreement defaults and does
not repurchase the underlying security, the Portfolio might incur
a loss if the value of the underlying security declines, and the
Fund might incur disposition costs in liquidating the underlying
security. In addition, if the issuer becomes involved in
bankruptcy proceedings, the Portfolio may be delayed or prevented
from obtaining the underlying security for its own purposes. In
order to minimize any such risk, the Portfolio will only engage
in repurchase agreements with recognized securities dealers and
banks determined to present minimal credit risk by the Adviser,
under the direction and supervision of the Board of Directors.
U.S. Government Obligations. Securities issued and guaranteed as
to principal and interest by the United States Government include
a variety of Treasury securities, which differ only in their
interest rates, maturities and times of issuance. Treasury bills
have a maturity of one year or less. Treasury notes have
maturities of one to seven years and Treasury bonds generally
have a maturity of greater than five years.
Government Agency Securities. Government agency securities that
are permissible investments consist of securities either issued
or guaranteed by agencies or instrumentalities of the United
States Government. Agencies of the United States Government
which issue or guarantee obligations include, among others,
Export-Import Banks of the United States, Farmers Home
Administration, Federal Housing Administration, Government
National Mortgage Association ("GNMA"), Maritime Administration,
Small Business Administration and The Tennessee Valley Authority.
Obligations of instrumentalities of the United States Government
include securities issued or guaranteed by, among others, the
Federal National Mortgage Association ("FNMA"), Federal Home Loan
Banks, Federal Home Loan Mortgage Corporation ("FHLMC"), Federal
Intermediate Credit Banks, Banks for Cooperatives, and the U.S.
Postal Service. Some of these securities, such as those
guaranteed by GNMA, are supported by the full faith and credit of
the U.S. Treasury; others, such as those issued by The Tennessee
Valley Authority, are supported by the right of the issuer to
borrow from the Treasury; while still others, such as those
issued by the Federal Land Banks, are supported only by the
credit of the instrumentality. The Fund's primary usage of these
types of securities will be GNMA certificates and FNMA and FHLMC
mortgage-backed obligations which are discussed in more detail
below.
Certificates of Deposit. Certificates of deposit are generally
short-term, interest-bearing negotiable certificates issued by
banks or savings and loan associations against funds deposited in
the issuing institution.
Time Deposits. Time Deposits are deposits in a bank or other
financial institution for a specified period of time at a fixed
interest rate for which a negotiable certificate is not received.
Bankers' Acceptance. A bankers' acceptance is a time draft drawn
on a commercial bank by a borrower usually in connection with an
international commercial transaction (to finance the import,
export, transfer or storage of goods). The borrower is liable
for payment as well as the bank, which unconditionally guarantees
to pay the draft at its face amount on the maturity date. Most
acceptances have maturities of six months or less and are traded
in secondary markets prior to maturity.
Commercial Paper. Commercial paper refers to short-term,
unsecured promissory notes issued by corporations to finance
short-term credit needs. Commercial paper is usually sold on a
discount basis and has a maturity at the time of issuance not
exceeding nine months.
Corporate Debt Securities. Corporate debt securities with a
remaining maturity of less than one year tend to become extremely
liquid and are traded as money market securities. Such issues
with between one and two years remaining to maturity tend to have
greater liquidity and considerably less market value fluctuations
than longer-term issues.
When-issued and Delayed-delivery Securities. From time to time,
in the ordinary course of business, each Portfolio of the Fund
may purchase securities on a when-issued or delayed-delivery
basis i.e., delivery and payment can take place a month or more
after the date of the transactions. The securities so purchased
are subject to market fluctuation and no interest accrues to the
purchaser during this period. At the time a Portfolio makes the
commitment to purchase securities on a when-issued or delayed-
delivery basis, the Fund will record the transaction and
thereafter reflect the value, each day, of such security in
determining the net asset value of such Portfolio. At the time
of delivery of the securities, the value may be more or less than
the purchase price. Each Portfolio will also establish a
segregated account with the Fund's custodian bank in which it
will maintain cash or cash equivalents or other Portfolio
securities equal in value to commitments for such when-issued or
delayed-delivery securities.
GNMA Certificates GNMA certificates are mortgage-backed
securities representing part ownership of a pool of mortgage
loans on which timely payment of interest and principal is
guaranteed by the full faith and credit of the U.S. government.
GNMA certificates differ from typical bonds because principal is
repaid monthly over the term of the loan rather than returned in
a lump sum at maturity. Because both interest and principal
payments (including prepayments) on the underlying mortgage loans
are passed through to the holder of the certificate, GNMA
certificates are called "pass-through" securities.
Although the mortgage loans in the pool have maturities of
up to 30 years, the actual average life of the GNMA certificates
typically will be substantially less because the mortgages are
subject to normal principal amortization and may be prepaid prior
to maturity. Prepayment rates vary widely and may be affected by
changes in market interest rates. In periods of falling interest
rates, the rate of prepayment tends to increase, thereby
shortening the actual average life of the GNMA certificates.
Conversely, when interest rates are rising, the rate of
prepayment tends to decrease, thereby lengthening the actual
average life of the GNMA certificates. Accordingly, it is not
possible to predict accurately the average life of a particular
pool. Reinvestment of prepayments may occur at higher or lower
rates that the original yield on the certificates. Due to the
prepayment feature and the need to reinvest prepayments of
principal at current rates, GNMA certificates can be less
effective than typical bonds of similar maturities at "locking-
in" yields during periods of declining interest rates, although
they may have comparable risks of decline in value during periods
of rising interest rates.
FNMA and FHLMC Mortgage-Backed Obligations The Federal National
Mortgage Association ("FNMA"), a federally chartered and
privately owned corporation, issues pass-through securities
representing an interest in a pool of conventional mortgage
loans. FNMA guarantees the timely payment of principal and
interest but this guarantee is not backed by the full faith and
credit of the U.S. government. The Federal Home Loan Mortgage
Corporation ("FHLMC"), a corporate instrumentality of the United
States, issues participation certificates that represent an
interest in a pool of conventional mortgage loans. FHLMC
guarantees the timely payment of interest and the ultimate
collection of principal and maintains reserves to protect holders
against losses due to default, but the certificates are not
backed by the full faith and credit of the U.S. government. As is
the case with GNMA certificates, the actual maturity of and
realized yield on particular FNMA and FHLMC pass-through
securities will vary based on the prepayment experience of the
underlying pool of mortgages.
Mortgage-Related Securities Each Portfolio of the Fund other
than the S&P 500 Index Portfolio may invest in collateralized
mortgage obligations ("CMOs") or mortgage-backed bonds issued by
financial institutions such as commercial banks, savings and loan
associations, mortgage banks and securities broker-dealers (or
affiliates of such institutions established to issue these
securities). CMOs are obligations fully collateralized directly
or indirectly by a pool of mortgages on which payments of
principal and interest are dedicated to payment of principal and
interest on the CMOs. Payments on the underlying mortgages (both
interest and principal) are passed through to the holders,
although not necessarily on a pro rata basis, on the same
schedule as they are received. Mortgage-backed bonds are general
obligations of the issuer fully collateralized directly or
indirectly by a pool of mortgages. The mortgages serve as
collateral for the issuer's payment obligations on the bonds, but
interest and principal payments on the mortgages are not passed
through either directly (as with GNMA certificates and FNMA and
FHLMC pass-through securities) or on a modified basis (as with
CMOs). Accordingly, a change in the rate of prepayments on the
pool of mortgages could change the effective maturity of a CMO
but not that of a mortgage-backed bond (although, like many
bonds, mortgage-backed bonds may be callable by the issuer prior
to maturity).
Each Portfolio of the Fund other than the S&P 500 Index
Portfolio may also invest in a variety of more risky CMOs,
including interest only ("IOs"), principal only ("POs"), inverse
floaters, or a combination of these securities. Stripped
mortgage-backed securities ("SMBS") are usually structured with
several classes that receive different proportions of the
interest and principal distributions from a pool of mortgage
assets. A common type of SMBS will have one class receiving all
of the interest from the mortgage assets (an IO), while the other
class will receive all of the principal (a PO). However, in some
instances, one class will receive some of the interest and most
of the principal while the other class will receive most of the
interest and the remainder of the principal. If the underlying
mortgage assets experience greater-than-anticipated or less-than-
anticipated prepayments of principal, the Fund may fail to fully
recoup its initial investment or obtain its initially assumed
yield on some of these securities. The market value of the class
consisting entirely of principal payments generally is unusually
volatile in response to changes in interest rates. The yields on
classes of SMBS that have more uncertain timing of cash flows are
generally higher than prevailing market yields on other mortgage-
backed securities because there is a greater risk that the
initial investment will not be fully recouped or received as
planned over time.
Each Portfolio of the Fund other than the S&P 500 Index
Portfolio may invest in another CMO class known as leveraged
inverse floating rate debt instruments ("inverse floaters"). The
interest rate on an inverse floater resets in the opposite
direction from the market rate of interest to which the inverse
floater is indexed. An inverse floater may be considered to be
leveraged to the extent that its interest rate varies by a
magnitude that exceeds the magnitude of the change in the index
rate of interest. The higher degree of leverage inherent in
inverse floaters is associated with greater volatility in their
market values. Accordingly, the duration of an inverse floater
may exceed its stated final maturity.
Certain CMOs may be deemed to be illiquid securities for
purposes of the Fund's 10% limitation on investments in such
securities. The investment adviser limits investments in more
risky CMOs (IOs, POs, inverse floaters) to no more than 5% of its
total assets.
Certain Risk Factors Relating to High-Yield, High-Risk Bonds
The descriptions below are intended to supplement the
material in the Prospectus regarding high-yield, high-risk bonds.
Sensitivity to Interest Rates and Economic Changes. High-yield
bonds are very sensitive to adverse economic changes and
corporate developments and their yields will fluctuate over time.
During an economic downturn or substantial period of rising
interest rates, highly leveraged issuers may experience financial
stress that would adversely affect their ability to service their
principal and interest payment obligations, to meet projected
business goals, and to obtain additional financing. If the
issuer of a bond defaulted on its obligations to pay interest or
principal or entered into bankruptcy proceedings, the Portfolio
may incur losses or expenses in seeking recovery of amounts owed
to it. In addition, periods of economic uncertainty and changes
can be expected to result in increased volatility of market
prices of high-yield bonds and the Portfolio's net asset value.
Payment Expectations. High-yield bonds may contain redemption or
call provisions. If an issuer exercised these provisions in a
declining interest rate market, the Portfolio would have to
replace the security with a lower-yielding security, resulting in
a decreased return for investors. Conversely, a high-yield
bond's value will decrease in a rising interest rate market, as
will the value of the Portfolio's assets. If the Portfolio
experiences unexpected net redemptions, this may force it to sell
high-yield bonds without regard to their investment merits,
thereby decreasing the asset base upon which expenses can be
spread and possibly reducing the Portfolio's rate of return.
Liquidity and Valuation. There may be little trading in the
secondary market for particular bonds, which may affect adversely
the Portfolio's ability to value accurately or dispose of such
bonds. Adverse publicity and investor perceptions, whether or
not based on fundamental analysis, may decrease the values and
liquidity of high-yield bonds, especially in a thin market.
Investments in Foreign Securities
American Depositary Receipts. American Depositary Receipts
("ADRs") may be issued in sponsored or unsponsored programs. In
sponsored programs, the issuer makes arrangements to have its
securities traded in the form of ADRs; in unsponsored programs,
the issuer may not be directly involved in the creation of the
program. Although the regulatory requirements with respect to
sponsored and unsponsored programs are generally similar, the
issuers of unsponsored ADRs are not obligated to disclose
material information in the United States and, therefore, such
information may not be reflected in the market value of the ADRs.
Foreign Exchange. If a foreign country cannot generate
sufficient earnings from foreign trade to service its external
debt, it may need to depend on continuing loans and aid from
foreign governments, commercial banks, multilateral
organizations, and inflows of foreign investment. The cost of
servicing external debt will also generally be adversely affected
by rising international interest rates because many external debt
obligations bear interest at rates which are adjusted based upon
international interest rates. The ability to service external
debt will also depend on the level of the relevant government's
international currency reserves and its access to foreign
currencies. Currency devaluations may affect the ability of an
obligor to obtain sufficient foreign currencies to service its
external debt.
Foreign Currency Exchange Transactions. Each Portfolio that
engages in foreign currency exchange transactions may do so on a
spot (i.e., cash) basis at the spot rate prevailing in the
foreign exchange currency market, or on a forward basis to "lock
in" the U.S. dollar price of the security. By entering into a
forward contract for the purchase or sale, for a fixed amount of
U.S. dollars, of the amount of foreign currency involved in the
underlying transactions, a Portfolio attempts to protect itself
against possible loss resulting from an adverse change in the
relationship between the U.S. dollar and the applicable foreign
currency during the period between the date on which the security
is purchased or sold and the date on which related payments are
made or received.
Portfolios will not enter into forward contracts for longer-
term hedging purposes. The possibility of changes in currency
exchange rates will be incorporated into the long-term investment
considerations when purchasing the investment and subsequent
considerations for possible sale of the investment.
Foreign Markets. Delays in settlement which may occur in
connection with transactions involving foreign securities could
result in temporary periods when a portion of the assets of a
portfolio is uninvested and no return is earned thereon. The
inability of a portfolio to make intended security purchases due
to settlement problems could cause the portfolio to miss
attractive investment opportunities. Inability to dispose of
portfolio securities due to settlement problems could result in
losses to a portfolio due to subsequent declines in values of the
portfolio securities or, if the portfolio has entered into a
contract to sell the security, possible liability to the
purchaser. Certain foreign markets, especially emerging markets,
may require governmental approval for the repatriation of
investment income, capital or the proceeds of sales of securities
by foreign investors. A portfolio could be adversely affected by
delays in, or a refusal to grant, any required governmental
approval for repatriation of capital, as well as by the
application to the portfolio of any restrictions on investments.
Foreign Debt Securities. Investing in foreign debt securities
will expose the Portfolios to the direct or indirect consequences
of political, social or economic changes in the industrialized
developing and emerging countries that issue the securities. The
ability and willingness of obligor or the governmental
authorities that control repayment of their external debt to pay
principal and interest on such debt when due may depend on
general economic and political conditions within the relevant
country. Additional country-related factors unique to foreign
issuers which may influence the ability or willingness to service
debt include, but are not limited to, a country's cash flow
situation, the availability of sufficient foreign exchange on the
date a payment is due, the relative size of its debt service
burden to the economy as a whole, and its government's
relationships with the International Monetary Fund, the World
Bank and other international agencies.
Futures Contracts
For hedging purposes, including protecting the price or
interest rate of securities that the Portfolio intends to buy,
the S&P 500 Index Portfolio may enter into futures contracts that
relate to securities in which it may directly invest and indices
comprised of such securities and may purchase and write call and
put options on such contracts. As a temporary investment
strategy until the Index Portfolio reaches $25 million in net
assets, the Index Portfolio may invest up to 100% of its assets
in such futures and/or options contracts. Thereafter, the
Portfolio may invest up to 20% of its assets in such futures
and/or options contracts. The Index Portfolio does not intend to
enter into futures contracts that are not traded on exchanges or
boards of trade.
A financial futures contract is a contract to buy or sell a
specified quantity of financial instruments such as U.S. Treasury
bills, notes and bonds, commercial paper and bank certificates of
deposit or the cash value of a financial instrument index at a
specified future date at a price agreed upon when the contract is
made. A stock index futures contract is a contract to buy or
sell specified units of a stock index at a specified future date
at a price agreed upon when the contract is made. The value of a
unit is based on the current value of the contract index. Under
such contracts no delivery of the actual stocks making up the
index takes place. Rather, upon expiration of the contract,
settlement is made by exchanging cash in an amount equal to the
difference between the contract price and the closing price of
the index at expiration, net of variation margin previously paid.
Substantially all futures contracts are closed out before
settlement date or called for cash settlement. A futures
contract is closed out by buying or selling an identical
offsetting futures contract. Upon entering into a futures
contract, the Portfolio is required to deposit an initial margin
with the Custodian for the benefit of the futures broker. The
initial margin serves as a "good faith" deposit that the
Portfolio will honor their futures commitments. Subsequent
payments (called "variation margin"} to and from the broker are
made on a daily basis as the price of the underlying investment
fluctuates. In the event of the bankruptcy of the futures broker
that holds margin on behalf of the Portfolio, the Portfolio may
be entitled to return of margin owed to it only in proportion to
the amount received by the broker's other customers. The Adviser
will attempt to minimize this risk by monitoring the
creditworthiness of the futures brokers with which the Portfolio
does business.
Because the value of index futures depends primarily on the
value of their underlying indexes, the performance of the broad-
based contracts will generally reflect broad changes in common
stock prices. However, because the Portfolio may not be invested
in precisely the same proportion as the S&P 500, it is likely
that the price changes of the Portfolio's index futures positions
will not match the price changes of the Portfolio's other
investments.
Options on futures contracts give the purchaser the right to
assume a position at a specified price in a futures contract at
any time before expiration of the option contract.
Options
The Bond and Capital Portfolios may sell (write) listed
options on U.S. Treasury Securities and options on contracts for
the future delivery of U.S. Treasury Securities as a means of
hedging the value of such securities owned by the Portfolio. The
S&P 500 Index Portfolio may enter into futures contracts that
relate to securities in which it may directly invest and indices
comprised of such securities and may purchase and write call and
put options on such contracts.
As a writer of a call option, a Portfolio may terminate its
obligation by effecting a closing purchase transaction. This is
accomplished by purchasing an option of the same series as the
option previously written. However, once the Portfolio has been
assigned an exercise notice, the Portfolio will be unable to
effect a closing purchase transaction. There can be no assurance
that a closing purchase transaction can be effected when the
Portfolio so desires.
The Portfolio will realize a profit from a closing
transaction if the price of the transaction is less than the
premium received from writing the option; the Portfolio will
realize a loss from a closing transaction if the price of the
transaction is more than the premium received from writing the
option. Since the market value of call options generally
reflects increases in the value of the underlying security, any
loss resulting from the closing transaction may be wholly or
partially offset by unrealized appreciation of the underlying
security. Conversely, any gain resulting from the closing
transaction may be wholly or partially offset by unrealized
depreciation of the underlying security. The principal factors
affecting the market value of call options include supply and
demand, the current market price and price volatility of the
underlying security, and the time remaining until the expiration
date.
Although the Bond and Capital Portfolios will write only
options on U.S. Treasury Securities and options on futures
contracts with respect to such securities which are traded on a
national exchange or Board of Trade, and the S&P 500 Index
Portfolio will write only options on securities among the
Standard & Poor's 500 Composite Stock Price Index (the "S&P
500"*) and options of futures contracts with respect to such
securities, there is no assurance that a liquid secondary market
will exist for any particular option. In the event it is not
possible to effect a closing transaction, the Portfolio will not
be able to sell the underlying security, until the option expires
or the option is exercised by the holder.
*The S&P 500 is an unmanaged index of common stocks comprised of
500 industrial, financial, utility and transportation companies.
"Standard & Poor's(R)", "S&P(R)", "S&P 500(R)", "Standard &
Poor's 500(R)", and "500" are trademarks of The McGraw-Hill
Companies, Inc. and have been licensed for use by Carillon Fund.
The Portfolio is not sponsored, endorsed, sold or promoted by
Standard & Poor's ("S&P"). S&P makes no representation or
warranty, express or implied, to the beneficial owners of the
Portfolio or any member of the public regarding the advisability
of investing in securities generally or in the Portfolio
particularly or the ability of the S&P 500 Index to track general
stock market performance. S&P's only relationship to Carillon
Fund is the licensing of certain trademarks and trade names of
S&P and of the S&P 500 Index which is determined, composed and
calculated by S&P without regard to Carillon Fund or the
Portfolio. S&P has no obligation to take the needs of Carillon
Fund or the beneficial owners of the Portfolio into consideration
in determining, composing or calculating the S&P 500 Index. S&P
is not responsible for and has not participated in the
determination of the prices and amount of the Portfolio or the
timing of the issuance or sale of the Portfolio or in the
determination or calculation of the equation by which the
Portfolio is to be converted into cash. S&P has no obligation or
liability in connection with the administration, marketing or
trading of the Portfolio.
S&P DOES NOT GUARANTEE THE ACCURACY AND/OR THE COMPLETENESS OF
THE S&P 500 INDEX OR ANY DATA INCLUDED THEREIN AND S&P SHALL HAVE
NO LIABILITY FOR ANY ERRORS, OMISSIONS, OR INTERRUPTIONS THEREIN.
S&P MAKES NO WARRANTY, EXPRESS OR IMPLIED, AS TO RESULTS TO BE
OBTAINED BY CARILLON FUND, BENEFICIAL OWNERS OF THE PORTFOLIO, OR
ANY OTHER PERSON OR ENTITY FROM THE USE OF THE S&P 500 INDEX OR
ANY DATA INCLUDED THEREIN. S&P MAKES NO EXPRESS OR IMPLIED
WARRANTIES, AND EXPRESSLY DISCLAIMS ALL WARRANTIES OF
MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR USE WITH
RESPECT TO THE S&P 500 INDEX OR ANY DATA INCLUDED THEREIN.
WITHOUT LIMITING ANY OF THE FOREGOING, IN NO EVENT SHALL S&P HAVE
ANY LIABILITY FOR ANY SPECIAL, PUNITIVE, INDIRECT, OR
CONSEQUENTIAL DAMAGES (INCLUDING LOST PROFITS), EVEN IF NOTIFIED
OF THE POSSIBILITY OF SUCH DAMAGES.
The Portfolio will effect a closing transaction to realize a
profit on an outstanding call option, to prevent an underlying
security from being called, to permit the sale of an underlying
security prior to the expiration date of the option, or to allow
for the writing of another call option on the same underlying
security with either a different exercise price or expiration
date or both.
Possible reasons for the absence of a liquid secondary
market on an exchange include the following: (a) insufficient
trading interest in certain options; (b) restrictions on
transactions imposed by an exchange; (c) trading halts,
suspensions or other restrictions imposed with respect to
particular classes or series of options or underlying securities;
(d) inadequacy of the facilities of an exchange or the Clearing
Corporation to handle trading volume; or (e) a decision by one or
more exchanges to discontinue the trading of options or impose
restrictions on types of orders. There can be no assurance that
higher than anticipated trading activity or order flow or other
unforeseen events might not at times render the trading
facilities inadequate and thereby result in the institution of
special trading procedures or restrictions which could interfere
with the Portfolio's ability to effect closing transactions.
The Bond and Capital Portfolios may write call options on
futures contracts on U.S. Treasury Securities as a hedge against
the adverse effect of expected increases in interest rates on the
value of Portfolio securities, in order to establish more
definitely the effective return on securities held by the
Portfolio. The S&P 500 Index Portfolio will write call options
on futures contracts on the S&P 500 or securities included
therein only for hedging purposes to protect the price of
securities it intends to buy and when such transactions enable it
to correlate its investment performance more closely to that of
the S&P 500 than would a direct purchase of securities included
in the S&P 500. The Portfolios will not write options on futures
contracts for speculative purposes.
A futures contract on a debt security is a binding
contractual commitment which will result in an obligation to make
or accept delivery, during a specified future time, of securities
having standardized face value and rate of return. Selling a
futures contract on debt securities (assuming a short position)
would give the Portfolio a legal obligation and right as seller
to make future delivery of the security against payment of the
agreed price.
Upon the exercise of a call option on a futures contract,
the writer of the option (the Portfolio) is obligated to sell the
futures contract (to deliver a long position to the option
holder) at the option exercise price, which will presumably be
lower than the current market price of the contract in the
futures market. However, as with the trading of futures, most
participants in the options markets do not seek to realize their
gains or losses by exercise of their option rights. Instead, the
holder of an option will usually realize a gain or loss by buying
or selling an offsetting option at a market price that will
reflect an increase or a decrease from the premium originally
paid. Nevertheless, if an option on a futures contract written
by the Portfolio is exercised, the Portfolio intends to either
close out the futures contract by purchasing an offsetting
futures contract, or deliver the underlying securities
immediately, in order to avoid assuming a short position. There
can be no assurance that the Portfolio will be able to enter into
an offsetting transaction with respect to a particular contract
at a particular time, but it may always deliver the underlying
security.
As a writer of options on futures contracts, the Portfolio
will receive a premium but will assume a risk of adverse movement
in the price of the underlying futures contract. If the option
is not exercised, the Portfolio will gain the amount of the
premium, which may partially offset unfavorable changes in the
value of securities held in the Portfolio. If the option is
exercised, the Portfolio might incur a loss in the option
transaction which would be reduced by the amount of the premium
it has received.
While the holder or writer of an option on a futures
contract may normally terminate its position by selling or
purchasing an offsetting option, the Portfolio's ability to
establish and close out options positions at fairly established
prices will be subject to the maintenance of a liquid market.
The Portfolio will not write options on futures contracts unless,
in the Adviser's opinion, the market for such options has
sufficient liquidity that the risks associated with such options
transactions are not at unacceptable levels.
Risks. While options will be sold in an effort to reduce certain
risks, those transactions themselves entail certain other risks.
Thus, while the Portfolio may benefit from the use of options,
unanticipated changes in interest rates or security price
movements may result in a poorer overall performance for the
Portfolio than if it had not entered into any options
transactions. The price of U.S. Treasury Securities futures are
volatile and are influenced, among other things, by changes in
prevailing interest rates and anticipation of future interest
rate changes. The price of S&P 500 futures are also volatile and
are influenced, among other things, by changes in conditions in
the securities markets in general. .
In the event of an imperfect correlation between a futures
position (and a related option) and the Portfolio position which
is intended to be protected, the desired protection may not be
obtained. The correlation between changes in prices of futures
contracts and of the securities being hedged is generally only
approximate. The amount by which such correlation is imperfect
depends upon many different circumstances, such as variations in
speculative market demand for futures and for debt securities
(including technical influences in futures trading) and
differences between the financial instruments being hedged and
the instruments underlying the standard options on futures
contracts available for trading.
Due to the imperfect correlation between movements in the
prices of futures contracts and movements in the prices of the
underlying debt securities, the price of a futures contract may
move more than or less than the price of the securities being
hedged. If the price of the future moves less than the price of
the securities which are the subject of the hedge, the hedge will
not be fully effective and if the price of the securities being
hedged has moved in an unfavorable direction, the Portfolio would
be in a better position than if it had not hedged at all. If the
price of the futures moves more than the price of the security,
the Portfolio will experience either a gain or loss on the option
on the future which will not be completely offset by movements in
the price of the securities which are the subject of the hedge.
The market prices of futures contracts and options thereon
may be affected by various factors. If participants in the
futures market elect to close out their contracts through
offsetting transactions rather than meet margin deposit
requirements, distortions in the normal relationship between the
debt securities and futures markets could result. Price
distortions could also result if investors in futures contracts
make or take delivery of underlying securities rather than engage
in closing transactions. This could occur, for example, if there
is a lack of liquidity in the futures market. From the point of
view of speculators, the deposit requirements in the futures
markets are less onerous than margins requirements in the
securities markets; accordingly, increased participation by
speculators in the futures market could cause temporary price
distortions. A correct forecast of interest rate trends by the
adviser may still not result in a successful hedging transaction
because of possible price distortions in the futures market and
because of the imperfect correlation between movements in the
prices of debt securities and movements in the prices of futures
contracts. A well-conceived hedge may be unsuccessful to some
degree because of market behavior or unexpected interest rate
trends.
Limitations on the Use of Options on Futures. The Portfolio will
only write options on futures that are traded on exchanges and
are standardized as to maturity date and underlying financial
instrument. The principal exchanges in the United States for
trading options on Treasury Securities are the Board of Trade of
the City of Chicago and the Chicago Mercantile Exchange. These
exchanges and trading options on futures are regulated under the
Commodity Exchange Act by the Commodity Futures Trading
Commission ("CFTC").
It is the Fund's opinion that it is not a "commodity pool"
as defined under the Commodity Exchange Act and in accordance
with rules promulgated by the CFTC.
The Portfolio will not write options on futures contracts
for which the aggregate premiums exceed 5% of the fair market
value of the Portfolio's assets, after taking into account
unrealized profits and unrealized losses on any such contracts it
has entered into (except that, in the case of an option that is
in-the-money at the time of purchase, the in-the-money amount
generally may be excluded in computing the 5%).
All of the futures options transactions employed by the
Portfolio will be BONA FIDE hedging transactions, as that term is
used in the Commodity Exchange Act and has been interpreted and
applied by the CFTC. To ensure that its futures options
transactions meet this standard, the Fund will enter into such
transactions only for the purposes and with the intent that CFTC
has recognized to be appropriate.
Custodial Procedures and Margins. The Fund's Custodian acts as
the Fund's escrow agent as to securities on which the Fund has
written call options and with respect to margin which the Fund
must deposit in connection with the writing of call options on
futures contracts. The Clearing Corporation (CC) will release
the securities or the margin from escrow on the expiration of the
call, or when the Fund enters into a closing purchase
transaction. In this way, assets of the Fund will never be
outside the control of the Fund's custodian, although such
control might be limited by the escrow receipts issued.
At the time the Portfolio sells a call option on a contract
for future delivery of U.S. Treasury Securities ("Treasury
futures contract"), it is required to deposit with its custodian,
in an escrow account, a specified amount of cash or U.S.
Government securities ("initial margin"). The account will be in
the name of the CC. The amount of the margin generally is a
small percentage of the contract amount. The margin required is
set by the exchange on which the contract is traded and may be
modified during the term of the contract. The initial margin is
in the nature of a performance bond or good faith deposit, and it
is released from escrow upon termination of the option assuming
all contractual obligations have been satisfied. The Portfolio
will earn interest income on its initial margin deposits.
In accordance with the rules of the exchange on which the
option is traded, it might be necessary for the Portfolio to
supplement the margin held in escrow. This will be done by
placing additional cash or U.S. Government securities in the
escrow account. If the amount of required margin should
decrease, the CC will release the appropriate amount from the
escrow account.
The assets in the margin account will be released to the CC
only if the Portfolio defaults or fails to honor its commitment
to the CC and the CC represents to the custodian that all
conditions precedent to its right to obtain the assets have been
satisfied.
Lending Portfolio Securities
The S&P 500 Index Portfolio may lend portfolio securities
with a value up to 10% of its total assets. Such loans may be
terminated at any time. The Portfolio will continuously maintain
as collateral cash or obligations issued by the U.S. government,
its agencies or instrumentalities in an amount equal to not less
than 100% of the current market value (on a daily marked-to-
market basis) of the loaned securities plus declared dividends
and accrued interest. While portfolio securities are on loan,
the borrower will pay the Portfolio any income accruing thereon,
and the Portfolio may invest or reinvest the collateral
(depending on whether the collateral is cash or U.S. Government
securities) in portfolio securities, thereby earning additional
income. Loans are typically subject to termination by the
Portfolio in the normal settlement time, currently five business
days after notice, or by the borrower on one day's notice.
Borrowed securities must be returned when the loan is terminated.
Any gain or loss in the market price of the borrowed securities
which occurs during the term of the loan inures to the Portfolio
and its shareholders. The Portfolio may pay reasonable finders',
borrowers', administrative, and custodial fees in connection with
a loan of its securities. The Adviser will review and monitor
the creditworthiness of such borrowers on an ongoing basis.
The S&P 500 Index Portfolio may invest in Standard & Poor's
Depositary Receipts(R) ("SPDRs(R)"). SPDRs are units of
beneficial interest in a unit investment trust, representing
proportionate undivided interests in a portfolio of securities in
substantially the same weighting as the component common stocks
of the S&P 500. While the investment objective of such a unit
investment trust is to provide investment results that generally
correspond to the price and yield performance of the component
common stocks of the S&P 500, there can be no assurance that this
investment objective will be met fully. As SPDRs are securities
issued by an investment company, non-fundamental restriction (5)
below restricts purchases of SPDRs to 10% of the Portfolio's
assets.
INVESTMENT RESTRICTIONS
The Fund has adopted the following fundamental restrictions
relating to the investment of assets of the Portfolios and other
investment activities. These are fundamental policies and may
not be changed without the approval of holders of the majority of
the outstanding voting shares of each Portfolio affected (which
for this purpose means the lesser of: [i] 67% of the shares
represented at a meeting at which more than 50% of the
outstanding shares are represented, or [ii] more than 50% of the
outstanding shares). A change in policy affecting only one
Portfolio may be effected with the approval of the majority of
the outstanding voting shares of that Portfolio only. The Fund's
fundamental investment restrictions provide that no Portfolio of
the Fund is allowed to:
(1) Issue senior securities (except that each Portfolio may
borrow money as described in restriction [9] below).
(2) With respect to 75% of the value of its total assets,
invest more than 5% of its total assets in securities (other than
securities issued or guaranteed by the United States Government
or its agencies or instrumentalities) of any one issuer.
(3) Purchase more than either: (i) 10% in principal amount
of the outstanding debt securities of an issuer, or (ii) 10% of
the outstanding voting securities of an issuer, except that such
restrictions shall not apply to securities issued or guaranteed
by the United States Government or its agencies or
instrumentalities.
(4) Invest more than 25% of its total assets in the
securities of issuers primarily engaged in the same industry.
For purposes of this restriction, gas, gas transmission,
electric, water, and telephone utilities each will be considered
a separate industry. This restriction does not apply to
obligations of banks or savings and loan associations or to
obligations issued or guaranteed by the United States Government,
its agencies or instrumentalities.
(5) Purchase or sell commodities, commodity contracts, or
real estate, except that each Portfolio may purchase securities
of issuers which invest or deal in any of the above, and except
that each Portfolio may invest in securities that are secured by
real estate. This restriction does not apply to obligations
issued or guaranteed by the United States Government, its
agencies or instrumentalities or to futures contracts or options
purchased by the S&P 500 Index Portfolio in compliance with non-
fundamental restrictions [8 and 9] below.
(6) Purchase any securities on margin (except that the Fund
may obtain such short-term credit as may be necessary for the
clearance of purchases and sales of portfolio securities) or make
short sales of securities or maintain a short position.
(7) Make loans, except through the purchase of obligations
in private placements or by entering into repurchase agreements
(the purchase of publicly traded obligations not being considered
the making of a loan).
(8) Lend its securities, except that the S&P 500 Index
Portfolio may lend securities in compliance with non-fundamental
restriction [7] below.
(9) Borrow amounts in excess of 10% of its total assets,
taken at market value at the time of the borrowing, and then only
from banks (and, in the case of the S&P 500 Index Portfolio by
entering into reverse repurchase agreements) as a temporary
measure for extraordinary or emergency purposes, or to meet
redemption requests that might otherwise require the untimely
disposition of securities, and not for investment or leveraging.
(10) Mortgage, pledge, hypothecate or in any manner
transfer, as security for indebtedness, any securities owned or
held by such Portfolio.
(11) Underwrite securities of other issuers except insofar
as the Fund may be deemed an underwriter under the Securities Act
of 1933 in selling shares of each Portfolio and except as it may
be deemed such in a sale of restricted securities.
(12) Invest more than 10% of its total assets in repurchase
agreements maturing in more than seven days, "small bank"
certificates of deposit that are not readily marketable, and
other illiquid investments.
The Fund has also adopted the following additional
investment restrictions that are not fundamental and may be
changed by the Board of Directors without shareholder approval.
Under these restrictions, no Portfolio of the Fund may:
(1) Participate on a joint (or a joint and several) basis in
any trading account in securities (but this does not prohibit the
"bunching" of orders for the sale or purchase of Portfolio
securities with the other Portfolios or with other accounts
advised or sponsored by the Adviser or any of its affiliates to
reduce brokerage commissions or otherwise to achieve best overall
execution).
(2) Purchase or retain the securities of any issuer, if, to
the knowledge of the Fund, officers and directors of the Fund,
the Adviser or any affiliate thereof each owning beneficially
more than 1/2% of one of the securities of such issuer, own in
the aggregate more than 5% of the securities of such issuer.
(3) Purchase or sell interests in oil, gas, or other mineral
exploration or development programs, or real estate mortgage
loans, except that each Portfolio may purchase securities of
issuers which invest or deal in any of the above, and except that
each Portfolio may invest in securities that are secured by real
estate mortgages. This restriction does not apply to obligations
or other securities issued or guaranteed by the United States
Government, its agencies or instrumentalities.
(4) Invest in companies for the purpose of exercising
control (alone or together with the other Portfolios).
(5) Purchase securities of other investment companies with
an aggregate value in excess of 5% of the Portfolio's total
assets, except in connection with a merger, consolidation,
acquisition or reorganization, or by purchase in the open market
of securities of closed-end investment companies where no
underwriter or dealer's commission or profit, other than
customary broker's commission, is involved, or by purchase of
SPDRs and only if immediately thereafter not more than 10% of
such Portfolio's total assets, taken at market value, would be
invested in such securities.
The Fund has also adopted the following additional
investment restrictions that are not fundamental and may be
changed by the Board of Directors without shareholder approval.
Under these restrictions:
The S&P 500 Index Portfolio of the Fund may not:
(6) Lend portfolio securities with an aggregate value of
more than 10% of its total assets.
(7) Invest more than 20% of its assets in futures contracts
and/or options on futures contracts, except as a temporary
investment strategy until the Index Portfolio reaches $25 million
in net assets, the Index Portfolio may invest up to 100% of its
assets in such futures and/or options contracts.
(8) Invest in options unless no more than 5% of its assets
is paid for premiums for outstanding put and call options
(including options on futures contracts) and unless no more than
25% of the Portfolio's assets consist of collateral for
outstanding options.
If a percentage restriction (for either fundamental or
nonfundamental policies) is adhered to at the time of investment,
a later increase or decrease in percentage beyond the specified
limit resulting from a change in values of portfolio securities
or amount of net assets shall not be considered a violation.
In addition to the investment restrictions described above,
the Fund will comply with restrictions contained in any current
insurance laws in order that the assets of The Union Central Life
Insurance Company's ("Union Central") separate accounts may be
invested in Fund shares.
PORTFOLIO TURNOVER
Each Portfolio has a different expected annual rate of
Portfolio turnover, which is calculated by dividing the lesser of
purchases or sales of Portfolio securities during the fiscal year
by the monthly average of the value of the Portfolio's securities
(excluding from the computation all securities, including
options, with maturities at the time of acquisition of one year
or less). A high rate of Portfolio turnover generally involves
correspondingly greater brokerage commission expenses, which must
be borne directly by the Portfolio. Turnover rates may vary
greatly from year to year as well as within a particular year and
may also be affected by cash requirements for redemptions of each
Portfolio's shares and by requirements which enable the Fund to
receive certain favorable tax treatments. The Portfolio turnover
rates will, of course, depend in large part on the level of
purchases and redemptions of shares of each Portfolio. Higher
Portfolio turnover can result in corresponding increases in
brokerage costs to the Portfolios of the Fund and their
shareholders. However, because rate of Portfolio turnover is not
a limiting factor, particular holdings may be sold at any time,
if investment judgment or Portfolio operations make a sale
advisable.
The annual Portfolio turnover rates for the Equity Portfolio
were 52.53% and 34.33%, respectively, for 1996 and 1995. The
annual Portfolio turnover rates for the Bond Portfolio were
202.44% and 111.01%, respectively, for 1996 and 1995. The annual
Portfolio turnover rates for the Capital Portfolio were and
53.11% and 43.83%, respectively, for 1996 and 1995. The annual
turnover rate for the S&P 500 Index Portfolio was 1.09% for 1996.
The annual Portfolio turnover rate for the Micro-Cap Portfolio is
expected to be approximately 50%.
MANAGEMENT OF THE FUND
Directors and Officers
The directors and executive officers of the Fund and their
principal occupations during the past five years are set forth
below. Unless otherwise noted, the address of each executive
officer and director is 1876 Waycross Road, Cincinnati, Ohio
45240.
<TABLE>
<CAPTION>
Position(s)
Name, Address with Principal Occupation(s)
and Age the Fund During Past Five Years
- ------------- ----------- ----------------------
<S> <C> <C>
George M. Callard, M.D. Director Professor of Clinical
3021 Erie Avenue Surgery, University of
Cincinnati, Ohio 45208 Cincinnati
(Age 63)
George L. Clucas* Director, Senior Vice President,
(53) President and Union Central; Director,
Chief Executive President and Chief
Officer Executive Officer,
Carillon Advisers, Inc.
("Adviser"); Director,
Carillon Investments,
Inc. ("CII")
Theodore H. Emmerich Director Consultant; former Partner,
1201 Edgecliff Place Ernst & Whinney, Accountants
Cincinnati, Ohio 45206
(70)
James M. Ewell Director Retired Senior Vice
9000 Indian Ridge Road President and Director,
Cincinnati, Ohio 45243 The Procter and Gamble
(81) Company
Richard H. Finan Director Attorney at Law;
11137 Main Street President Pro Tempore
Cincinnati, Ohio 45241 of the Ohio State Senate
(62)
Jean Patrice Director Interim President, Cincinnati
Harrington, S.C. State Technical and Community
3217 Whitfield Avenue College; Former Executive
Cincinnati, Ohio 45220 Director, Cincinnati Youth
(71) Collaborative; President
Emeritus (formerly, President)
College of Mt. St. Joseph
John H. Jacobs* Director Executive Vice President,
(50) Union Central; prior to
June, 1995, Officer and
employee, Union Central
Charles W. McMahon Director Retired Senior Vice
2031 W. Galbraith Road, #E President and Director,
Cincinnati, Ohio 45239 Union Central
(78)
Harry Rossi* Director Director Emeritus, Union
641 Flagstaff Drive Central; Director,
Cincinnati, Ohio 45215 Adviser; former Chairman,
(77) President and Chief
Executive Officer,
Union Central
Stephen R. Hatcher Senior Vice Executive Vice President
(54) President and Chief Financial
Officer, Union Central;
prior to June, 1995, officer
and employee, Union Central
John F. Labmeier Vice President Second Vice President,
(48) and Secretary Associate General
Counsel and Assistant
Secretary, Union Central;
Vice President and Secretary,
CII; Secretary, Adviser
Thomas G. Knipper Controller Assistant Controller,
(39) Union Central; prior to
July, 1995, Treasurer of
The Gateway Trust and Vice
President and Controller
of Gateway Advisers, Inc.
PJ Barker Assistant Investment Accounting Manager,
(27) Controller Union Central; prior to June,
1993, Senior Staff
Accountant, Arther
Andersen LLP
Joseph A. Tucker Treasurer Assistant to the Treasurer,
(62) Union Central; prior to
October 1992, Officer
and employee, Union Central
John M. Lucas Assistant Assistant Counsel and
(46) Secretary Assistant to the Secretary,
Union Central; prior to
October, 1992, Officer
and employee, Union Central
</TABLE>
* Messrs. Clucas, Jacobs and Rossi are considered to be
"interested persons" of the Fund (within the meaning of the
Investment Company Act of 1940) because of their affiliation with
the Adviser.
Each of the directors also serves as a trustee of Carillon
Investment Trust.
All directors who are not "interested persons" of the
Company are members of the Audit Committee.
As of the date of this Statement of Additional Information,
officers and directors of the Fund do not own any of the
outstanding shares of the Fund. Directors who are not officers
or employees of Union Central or Adviser are paid a fee plus
actual out-of-pocket expenses by the Fund for each meeting of the
Board of Directors attended. Total fees and expenses incurred
for 1996 were $44,810.<PAGE>
<TABLE>
<CAPTION>
Compensation Table
(1) (2) (3) (4) (5)
Name of Aggregate Pension or Estimated Total
Person, Compensation Retirement Retirement Compensation
Position From Benefits Benefits From Registrant
Registrant Accrued As Upon and Fund
Part of Retirement Complex*
Fund Expenses Paid to
Directors
<S> <C> <C> <C> <C>
George M. Callard, 7,300** -- -- 10,600
M.D.
Director
George L. Clucas N/A N/A N/A N/A
Director
Theodore H. Emmerich 7,500 -- -- 10,800
Director
James M. Ewell 7,300 -- -- 10,600
Director
Richard H. Finan 7,300 -- -- 10,600
Director
Jean Patrice
Harrington, S.C. 7,300 -- -- 10,600
Director
John H. Jacobs N/A N/A N/A N/A
Director
Charles W. McMahon 7,300** -- -- 10,600
Director
Harry Rossi N/A N/A N/A N/A
Director
</TABLE>
* Each of the Directors also serves as a Trustee of Carillon
Investment Trust.
** Messrs. Callard and McMahon have been deferring their
compensation each year. As of December 31, 1996, the total
amount deferred, including interest, was as follows: Dr. Callard
- - $62,476; Mr. McMahon - $25,223.
Investment Adviser
The Fund has entered into an Investment Advisory Agreement
("Agreement") with Carillon Advisers, Inc. ("Adviser") whose
principal business address is 1876 Waycross Road, Cincinnati,
Ohio 45240 (P.O. Box 40407, Cincinnati, Ohio 45240). The
Adviser was incorporated under the laws of Ohio on August 18,
1986, and is a wholly-owned subsidiary of Union Central.
Executive officers and directors of the Adviser who are
affiliated with the Fund are George L. Clucas, President and
Chief Executive Officer; Thomas G. Knipper, Treasurer; and John
F. Labmeier, Secretary.
Pursuant to the Agreement, the Fund has retained the Adviser
to manage the investment of the Fund's assets, including the
placing of orders for the purchase and sale of Portfolio
securities. The Adviser is at all times subject to the direction
and supervision of the Board of Directors of the Fund.
The Adviser continuously furnishes an investment program for
each Portfolio, is responsible for the actual management of each
Portfolio and has responsibility for making decisions to buy,
sell or hold any particular security. The Adviser obtains and
evaluates such information and advice relating to the economy,
securities markets, and specific securities as it considers
necessary or useful to continuously manage the assets of the
Portfolios in a manner consistent with their investment
objectives, policies and restrictions. The Adviser considers
analyses from various sources, makes necessary investment
decisions and effects transactions accordingly. The Adviser also
performs certain administrative functions for the Fund. The
Adviser may utilize the advisory services of subadvisers for one
or more of the Portfolios.
Payment of Expenses
Under the terms of the Agreement, in addition to managing
the Fund's investments, the Adviser, at its expense, maintains
certain of the Fund's books and records (other than those
provided by Firstar Trust Company, by agreement) and furnishes
such office space, facilities, equipment, and clerical help as
the Fund may reasonably require in the conduct of business. In
addition, the Adviser pays for the services of all executive,
administrative, clerical, and other personnel, including officers
of the Fund, who are employees of Union Central. The Adviser
also bears the cost of telephone service, heat, light, power and
other utilities provided to the Fund. Expenses not expressly
assumed by the Adviser under the Agreement will be paid by the
Fund.
Each Portfolio pays all other expenses incurred in its
operation and a portion of the Fund's general administration
expenses allocated on the basis of the asset size of the
respective Portfolios. Expenses other than the Adviser's fee
that are borne directly and paid individually by a Portfolio
include, but are not limited to, brokerage commissions, dealer
markups, expenses incurred in the acquisition of Portfolio
securities, transfer taxes, transaction expenses of the
custodian, pricing services used by only one or more Portfolios,
and other costs properly payable by only one or more Portfolios.
Expenses which are allocated on the basis of size of the
respective Portfolios include custodian (portion based on asset
size), dividend disbursing agent, transfer agent, bookkeeping
services (except annual per Portfolio base charge), pricing,
shareholder's and directors' meetings, directors' fees, proxy
statement and Prospectus preparation, registration fees and
costs, fees and expenses of legal counsel not including employees
of the Adviser, membership dues of industry associations,
postage, insurance premiums including fidelity bond, and all
other costs of the Fund's operation properly payable by the Fund
and allocable on the basis of size of the respective Portfolios.
The Adviser will pay any expenses of the S&P 500 Index Portfolio,
other than the advisory fee for that Portfolio, to the extent
that such expenses exceed .30% of that Portfolio's net assets.
The Adviser will also pay any expenses of the Micro-Cap
Portfolio, other than the advisory fee for that Portfolio, to the
extent that such expenses exceed 1.00% of that Portfolio's net
assets.
Depending on the nature of a legal claim, liability or
lawsuit, litigation costs, payment of legal claims or liabilities
and any indemnification relating thereto may be directly
applicable to a Portfolio or allocated on the basis of the size
of the respective Portfolios. The directors have determined that
this is an appropriate method of allocation of expenses.
The Agreement also provides that if the total operating
expenses of the Fund, exclusive of the advisory fee, taxes,
interest, brokerage fees and certain legal claims and liabilities
and litigation and indemnification expenses, as described in the
Agreement, for any fiscal year exceed 1.0% of the average daily
net assets of the Fund, the Adviser will reimburse the Fund for
such excess, up to the amount of the advisory fee for that year.
Such amount, if any, will be calculated daily and credited on a
monthly basis.
Advisory Fee
As full compensation for the services and facilities
furnished to the Fund and expenses of the Fund assumed by the
Adviser, the Fund pays the Adviser monthly compensation
calculated daily as described on page 11 of the Prospectus. The
compensation after all waivers for each Portfolio was as
follows:
<PAGE>
<TABLE>
<CAPTION>
S&P 500
Equity Bond Capital Index Micro-Cap
Year Portfolio Portfolio Portfolio Portfolio Portfolio
<S> <C> <C> <C> <C> <C>
1996 $1,436,998 $384,084 $1,032,861 $8,233 N/A
1995 $1,108,596 $314,237 $913,378 -0- N/A
1994 $924,881 $273,068 $766,664 N/A N/A
</TABLE>
There is no assurance that the Portfolios will reach a net
asset level high enough to realize a reduction in the rate of the
advisory fee. Any reductions in the rate of advisory fee will be
applicable to each Portfolio separately in accordance with the
schedule of fees applicable to each Portfolio.
Investment Advisory Agreement
The Investment Advisory Agreement was initially approved by
the Fund's Board of Directors, including a majority of the
directors who are not interested persons of the Adviser, on March
22, 1984. Unless earlier terminated as described below, the
Agreement will continue in effect from year to year if approved
annually: (a) by the Board of Directors of the Fund or by a
majority of the outstanding shares of the Fund, including a
majority of the outstanding shares of each Portfolio; and (b) by
a majority of the directors who are not parties to such contract
or interested persons (as defined by the Investment Company Act
of 1940) of any such party. The Agreement is not assignable and
may be terminated without penalty by the Fund on 60 days notice,
and by the Adviser on 90 days notice. On March 27, 1997, the
Agreement was approved for continuance for one (1) year by the
Board of Directors by unanimous vote of those present, including
a majority of the directors who are not parties to such contract
or interested persons of any such party.
On March 21, 1990, the Board of Directors took steps to
activate the Capital Portfolio of the Fund by authorizing the
issuance of shares of that Portfolio to a separate account of
Union Central. The Board of Directors also approved an amendment
to the Investment Advisory Agreement so as to make the Agreement
applicable to the Capital Portfolio and to specify the advisory
fee payable by it. The Board determined that the amendment did
not affect the interests of the classes of Fund shares other than
Capital Portfolio shares and that therefore only the holders of
Capital Portfolio shares were entitled to vote on the amendment.
On May 1, 1990, the Union Central separate account invested $15.2
million in the Capital Portfolio in exchange for 1,390,516 shares
at a price of $10.95 per share. Union Central, as legal owner of
the Capital Portfolio shares purchased by its separate account
and as sole shareholder of the Capital Portfolio, approved the
Agreement as amended.
On September 15, 1995, the Board of Directors took steps to
activate the S&P 500 Index Portfolio of the Fund by authorizing
the issuance of shares of that Portfolio. On December 13, 1995,
the Board of Directors also approved an amendment to the
Investment Advisory Agreement so as to make the Agreement
applicable to the Index Portfolio and to specify the advisory fee
payable by it. The Board determined that the amendment did not
affect the interests of the classes of Fund shares other than
Index Portfolio shares and that therefore only the holders of
Index Portfolio shares were entitled to vote on the amendment.
The sole shareholder of the Index Portfolio approved the
Agreement as amended on January 3, 1996.
On June 16, 1997, the Board of Directors took steps to
activate the Micro-Cap Portfolio of the Fund by authorizing the
issuance of shares of that Portfolio. On September 18, 1997, the
Board of Directors also approved an amendment to the Investment
Advisory Agreement making the Agreement applicable to the Micro-
Cap Portfolio and specifying the advisory fee payable by it. The
Board determined that the amendment did not affect the interests
of the classes of Fund shares other than Micro-Cap Portfolio
shares and that therefore only the holders of Micro-Cap Portfolio
shares were entitled to vote on the amendment. It is anticipated
that the sole shareholder of the Micro-Cap Portfolio will approve
the Agreement on or about December 1, 1997.
The Investment Advisory Agreement provides that the Adviser
shall not be liable to the Fund or to any shareholder for any
error of judgment or mistake of law or for any loss suffered by
the Fund or by any shareholder in connection with matters to
which the Investment Advisory Agreement relates, except a loss
resulting from willful misfeasance, bad faith, gross negligence,
or reckless disregard on the part of the Adviser in the
performance of its duties thereunder. In the case of
administration services, the Adviser will be held to a normal
standard of liability.
The Agreement in no way restricts the Adviser from acting as
investment manager or adviser to others.
If the question of continuance of the Agreement (or adoption
of any new Agreement) is presented to shareholders, continuance
(or adoption) with respect to a Portfolio shall be effective only
if approved by a majority vote of the outstanding voting
securities of that Portfolio. If the shareholders of any one or
more of the Portfolios should fail to approve the Agreement, the
Adviser may nonetheless serve as an adviser with respect to any
Portfolio whose shareholders approved the Agreement.
Administration
The Adviser is responsible for providing certain
administrative functions to the Fund and has entered into an
Administration Agreement with Carillon Investments, Inc. ("CII")
under which CII furnishes substantially all of such services for
an annual fee of .20% of the average net assets of the Bond,
Capital and Equity Portfolios, 10% of the average net assets of
the Micro-Cap Portfolio, and .05% of the average net assets of
the S&P 500 Index Portfolio. The fee is borne by the Adviser,
not the Fund. Under the Administration Agreement, CII is
obligated to provide persons for clerical, accounting,
bookkeeping, administrative and other similar services, to supply
office space, stationery and office supplies, and to prepare tax
returns, reports to stockholders, and filings with the Securities
and Exchange Commission and state securities authorities.
Service Agreement
Under a Service Agreement between the Adviser and Union
Central, Union Central has agreed to make available to the
Adviser the services of certain employees of Union Central on a
part-time basis for the purpose of better enabling the Adviser to
fulfill its obligations to the Fund under the Agreement.
Pursuant to the Service Agreement, the Adviser shall reimburse
Union Central for all costs allocable to the time spent on the
affairs of the Adviser by the employees provided by Union
Central. In performing their services for the Adviser pursuant
to the Service Agreement, the specified employees shall report
and be solely responsible to the officers and directors of the
Adviser or persons designated by them. Union Central shall have
no responsibility for the investment recommendations or decisions
of the Adviser. The obligation of performance under the
Agreement is solely that of the Adviser and Union Central
undertakes no obligation in respect thereto except as otherwise
expressly provided in the Service Agreement. The Service
Agreement was approved by the shareholders of the Equity, Bond
and Capital Portfolios at a meeting held on March 20, 1992. The
sole shareholder of the S&P 500 Index Portfolio approved the
Service Agreement on January 3, 1996. It is anticipated that the
sole shareholder of the Micro-Cap Portfolio will approve the
Service Agreement on or about December 1, 1997.
Securities Activities of Adviser
Securities held by the Fund may also be held by Union
Central or by other separate accounts or mutual funds for which
the Adviser acts as an adviser. Because of different investment
objectives or other factors, a particular security may be bought
by Union Central or by the Adviser or for one or more of its
clients, when one or more other clients are selling the same
security. If purchases or sales of securities for one or more of
the Fund's Portfolios or other clients of the Adviser or Union
Central arise for consideration at or about the same time,
transactions in such securities will be made, insofar as
feasible, for the Fund's Portfolios, Union Central, and other
clients in a manner deemed equitable to all. To the extent that
transactions on behalf of more than one client of the Adviser
during the same period may increase the demand for securities
being purchased or the supply of securities being sold, there may
be an adverse effect on price.
On occasions when the Adviser deems the purchase or sale of
a security to be in the best interests of the Fund as well as
other accounts or companies, it may, to the extent permitted by
applicable laws and regulations, but will not be obligated to,
aggregate the securities to be sold or purchased for the Fund (or
for two or more Portfolios) with those to be sold or purchased
for other accounts or companies in order to obtain more favorable
execution and low brokerage commissions. In that event,
allocation of the securities purchased or sold, as well as the
expenses incurred in the transaction, will be made by the Adviser
in the manner it considers to be most equitable and consistent
with its fiduciary obligations to the Fund Portfolio(s) and to
such other accounts or companies. In some cases this procedure
may adversely affect the size of the position obtainable for a
Portfolio.
DETERMINATION OF NET ASSET VALUE
As described on page 12 of the Prospectus, the net asset
value of shares of the Fund is determined once daily, Monday
through Friday as of the close of regular trading on the New York
Stock Exchange (normally 4:00 p.m., Eastern Time), when there are
purchases or redemptions of Fund shares, except: (i) when the New
York Stock Exchange is closed (currently New Year's Day,
President's Day, Good Friday, Memorial Day, Independence Day,
Labor Day, Thanksgiving Day, and Christmas Day); and (ii) any day
on which changes in the value of the Portfolio securities of the
Fund will not materially affect the current net asset value of
the shares of a Portfolio.
Securities held by the Portfolios, except for money market
instruments maturing in 60 days or less, will be valued as
follows: Securities which are traded on stock exchanges
(including securities traded in both the over-the-counter market
and on exchange), or listed on the NASDAQ National Market System,
are valued at the last sales price as of the close of the New
York Stock Exchange on the day the securities are being valued,
or, lacking any sales, at the closing bid prices. Securities
traded only in the over-the-counter market are valued at the last
bid prices quoted by brokers that make markets in the securities
at the close of trading on the New York Stock Exchange.
Securities and assets for which market quotations are not readily
available are valued at fair value as determined in good faith by
or under the direction of the Board of Directors.
Money market instruments with a remaining maturity of 60
days or less are valued on an amortized cost basis. Under this
method of valuation, the instrument is initially valued at cost
(or in the case of instruments initially valued at market value,
at the market value on the day before its remaining maturity is
such that it qualifies for amortized cost valuation); thereafter,
the Fund assumes a constant proportionate amortization in value
until maturity of any discount or premium, regardless of the
impact of fluctuating interest rates on the market value of the
instrument. While this method provides certainty in valuation,
it may result in periods during which value, as determined by
amortized cost, is higher or lower than the price that would be
received upon sale of the instrument.
PURCHASE AND REDEMPTION OF SHARES
The Fund offers its shares, without sales charge, only to
Union Central and its separate accounts. It is possible that at
some later date the Fund may offer shares to other investors.
The Fund is required to redeem all full and fractional
shares of the Fund for cash at the net asset value per share.
Payment for shares redeemed will generally be made within seven
days after receipt of a proper notice of redemption. The right
to redeem shares or to receive payment with respect to any
redemption may only be suspended for any period during which: (a)
trading on the New York Stock Exchange is restricted as
determined by the Securities and Exchange Commission or such
exchange is closed for other than weekends and holidays; (b) an
emergency exists, as determined by the Securities and Exchange
Commission, as a result of which disposal of Portfolio securities
or determination of the net asset value of a Portfolio is not
reasonably practicable; and (c) the Securities and Exchange
Commission by order permits postponement for the protection of
shareholders.
TAXES
Each Portfolio of the Fund will be treated as a separate
entity for federal income tax purposes. Each Portfolio has
qualified and has elected to be taxed as a "regulated investment
company" under the provisions of Subchapter M of the Internal
Revenue Code of 1986, as amended (the "Code"). If a Portfolio
qualifies as a "regulated investment company" and complies with
the provisions of the Code by distributing substantially all of
its net income (both ordinary income and capital gain), the
Portfolio will be relieved from federal income tax on the amounts
distributed.
In order to qualify as a regulated investment company, in
each taxable year each Portfolio must, among other things: (a)
derive at least 90 percent of its gross income from dividends,
interest, payments with respect to loans of securities, and gains
from the sale or other disposition of stocks or securities or
foreign currencies (subject to the authority of the Secretary of
the Treasury to exclude certain foreign currency gains) or other
income (including, but not limited to, gains from options,
futures, or forward contracts which are ancillary to the
Portfolio's principal business of investing in stocks or
securities or options and futures with respect to stocks or
securities) derived with regard to its investing in such stocks,
securities or currencies; and (b) derive less than 30 percent of
its gross income from gains (without deduction for losses)
realized on the sale or other disposition of any of the following
held for less than three months: securities, options, futures or
forward contracts (other than options, futures or forward
contracts on foreign currencies) or certain foreign currencies.
In order to meet the requirements noted above, the Fund may be
required to defer disposing of certain options, futures contracts
and securities beyond the time when it might otherwise be
advantageous to do so. These requirements may also affect the
Fund's investments in various ways, such as by limiting the
Fund's ability to:(a) sell investments held for less than three
months; (b) effect closing transactions on options written less
than three months previously; (c) write options for a period of
less than three months; and (d) write options on securities held
for less than the long-term capital gains holding period. For a
discussion of tax consequences to owners of annuity contracts,
see the Prospectus for those contracts.
The discussion of "Taxes" in the Prospectus, in conjunction
with the foregoing, is a general and abbreviated summary of the
applicable provisions of the Code and Treasury Regulations
currently in effect as interpreted by the Courts and the Internal
Revenue Service.
PORTFOLIO TRANSACTIONS AND BROKERAGE
The Adviser is primarily responsible for the investment
decisions of each Portfolio, including decisions to buy and sell
securities, the selection of brokers and dealers to effect the
transactions, the placing of investment transactions, and the
negotiation of brokerage commissions, if any. No Portfolio has
any obligation to deal with any dealer or group of dealers in the
execution of transactions in Portfolio securities. In placing
orders, it is the policy of the Fund to obtain the most favorable
net results, taking into account various factors, including
price, dealer spread or commission, if any, size of the
transaction, and difficulty of execution. While the Adviser
generally seeks reasonably competitive spreads or commissions,
the Portfolios will not necessarily be paying the lowest spread
or commission available.
If the securities in which a particular Portfolio of the
Fund invests are traded primarily in the over-the-counter market,
where possible the Portfolio will deal directly with the dealers
who make a market in the securities involved unless better prices
and execution are available elsewhere. Such dealers usually act
as principals for their own account. On occasion, securities may
be purchased directly from the issuer. Bonds and money market
instruments are generally traded on a net basis and do not
normally involve either brokerage commissions or transfer taxes.
The cost of Portfolio securities transactions of each Portfolio
will consist primarily of brokerage commission or dealer or
underwriter spreads.
While the Adviser seeks to obtain the most favorable net
results in effecting transactions in the Portfolio securities,
brokers who provide supplemental investment research to the
Adviser may receive orders for transactions by the Fund. Such
supplemental research service ordinarily consists of assessments
and analyses of the business or prospects of a company, industry,
or economic sector. If, in the judgment of the Adviser, the Fund
will be benefited by such supplemental research services, the
Adviser is authorized to pay commissions to brokers furnishing
such services which are in excess of commissions which another
broker may charge for the same transaction. Information so
received will be in addition to and not in lieu of the services
required to be performed by the Adviser under its Investment
Advisory Agreement. The expenses of the Adviser will not
necessarily be reduced as a result of the receipt of such
supplemental information. In some cases, the Adviser may use
such supplemental research in providing investment advice to its
other advisory accounts.
During 1996, 26% of the Fund's total brokerage was allocated
to brokers who furnish statistical data or research information.
Brokerage commissions paid during 1996, 1995 and 1994 were
$475,382, $349,679 and $232,642, respectively.
GENERAL INFORMATION
Capital Stock
The Fund was incorporated in Maryland on January 30, 1984.
The authorized capital stock of the Fund consists of one hundred
and fifty million shares of common stock, par value ten cents
($0.10) per share. The shares of the authorized capital stock is
currently divided into the following classes: Equity Portfolio
consisting of forty million authorized shares; Capital Portfolio
consisting of thirty million authorized shares; Bond Portfolio
consisting of thirty million authorized shares; S&P 500 Index
Portfolio consisting of thirty million authorized shares; and
Micro-Cap Portfolio consisting of twenty million shares.
The Board of Directors may change the designation of any
Portfolio and may increase or decrease the number of authorized
shares of any Portfolio, but may not decrease the number of
authorized shares of any Portfolio below the number of shares
then outstanding.
Each issued and outstanding share is entitled to participate
equally in dividends and distributions declared by the respective
Portfolio and, upon liquidation or dissolution, in net assets of
such Portfolio remaining after satisfaction of outstanding
liabilities.
Voting Rights
In accordance with an amendment to the Maryland General
Corporation Law, the Board of Directors of the Fund has adopted
an amendment to its Bylaws providing that unless otherwise
required by the Investment Company Act of 1940, the Fund shall
not be required to hold an annual shareholder meeting unless the
Board of Directors determines to hold an annual meeting. The
Fund intends to hold shareholder meetings only when required by
law and such other times as may be deemed appropriate by its
Board of Directors.
All shares of common stock have equal voting rights
(regardless of the net asset value per share) except that on
matters affecting only one Portfolio, only shares of the
respective Portfolio are entitled to vote. The shares do not
have cumulative voting rights. Accordingly, the holders of more
than 50% of the shares of the Fund voting for the election of
directors can elect all of the directors of the Fund if they
choose to do so and in such event the holders of the remaining
shares would not be able to elect any directors.
Matters in which the interests of all Portfolios are
substantially identical (such as the election of directors or the
approval of independent public accountants) will be voted on by
all shareholders without regard to the separate Portfolios.
Matters that affect all Portfolios but where the interests of the
Portfolios are not substantially identical (such as approval of
the Investment Advisory Agreement) would be voted on separately
by each Portfolio. Matters affecting only one Portfolio, such as
a change in its fundamental policies, are voted on separately by
that Portfolio.
Matters requiring separate shareholder voting by Portfolio
shall have been effectively acted upon with respect to any
Portfolio if a majority of the outstanding voting securities of
that Portfolio votes for approval of the matter, notwithstanding
that: (1) the matter has not been approved by a majority of the
outstanding voting securities of any other Portfolio; or (2) the
matter has not been approved by a majority of the outstanding
voting securities of the Fund.
The phrase "a majority of the outstanding voting securities"
of a Portfolio (or of the Fund) means the vote of the lesser of:
(1) 67% of the shares of the Portfolio (or the Fund) present at a
meeting if the holders of more than 50% of the outstanding shares
are present in person or by proxy; or (2) more than 50% of the
outstanding shares of the Portfolio (or the Fund).
As noted in the Prospectus, Union Central currently has
voting control of the Fund. With voting control, Union Central
could make fundamental and substantial changes (such as electing
a new Board of Directors, changing the investment adviser or
advisory fee, changing a Portfolio's fundamental investment
objectives and policies, etc.) regardless of the views of
Contract Owners. However, under current interpretations of
presently applicable law, Contract Owners are entitled to give
voting instructions with respect to Fund shares held in
registered separate accounts and therefore all Contract Owners
would receive advance notice before any such changes could be
made.
Additional Information
This Statement of Additional Information and the Prospectus
do not contain all the information set forth in the registration
statement and exhibits relating thereto, which the Fund has filed
with the Securities and Exchange Commission, Washington, D.C.,
under the Securities Act of 1933 and the Investment Company Act
of 1940, to which reference is hereby made.
INDEPENDENT AUDITORS
The financial statements of the Fund have been audited by
Deloitte & Touche LLP, 1700 Courthouse Plaza NE, Dayton, Ohio
45402, independent auditors, whose report follows. The financial
statements are included in this Statement of Additional
Information in reliance upon the report of Deloitte & Touche LLP,
given upon their authority as experts in auditing and accounting.
<PAGE>
CARILLON FUND, INC.
Financial Statements
June 30, 1997
<PAGE>
CARILLON FUND, INC.
STATEMENTS OF ASSETS AND LIABILITIES
June 30, 1997
(Unaudited)
<TABLE>
<CAPTION>
S&P 500
Equity Capital Bond Index
Portfolio Portfolio Portfolio Portfolio
------------ ------------ ----------- -----------
<S> <C> <C> <C> <C>
ASSETS
Investments in
securities, at value $310,759,196 $159,028,648 $87,712,519 $43,563,274
(cost $250,986,522;
$149,939,900;
$86,017,333; $35,041,087)
Cash 3,401 316 -- --
Receivables:
Shares sold 373,167 224,556 62,889 95,074
Securities sold 97,809 -- -- --
Interest and Dividends 316,416 666,019 1,369,764 50,005
Prepaid expenses and other 29,062 13,625 14,208 16,042
------------ ------------ ----------- -----------
311,579,051 159,933,164 89,159,380 43,724,395
LIABILITIES
Payables:
Investment securities
purchased 1,581,018 -- 998,907 409,314
Shares purchased -- -- -- 3,478
Investment advisory fees 139,620 88,361 34,506 8,181
Custodial and portfolio
accounting fees 19,934 20,166 15,298 10,875
Professional fees 160 2,262 -- 12,206
Bank overdraft -- -- 100 33
Variation margin -- -- -- 33,250
Other accrued expenses 7,985 6,412 3,605 10,964
Deferred compensation
for directors -- -- 92,340 --
------------ ------------ ----------- -----------
1,748,717 117,201 1,144,756 488,302
------------ ------------ ----------- -----------
NET ASSETS
Paid-in capital 227,752,582 147,641,813 85,496,428 33,803,012
Undistributed net
investment income 181,360 354,849 301,209 21,428
Accumulated net realized
gain/(loss) 22,123,718 2,730,552 521,671 604,091
of investments
Net unrealized
appreciation
of investments 59,772,674 9,088,749 1,695,186 8,807,562
------------ ------------ ----------- -----------
$309,830,334 $159,815,963 $88,014,624 $43,236,093
============ ============ =========== ===========
Shares authorized
($.10) par value 40,000,000 30,000,000 30,000,000 30,000,000
Shares outstanding 16,858,010 11,648,419 8,038,070 3,009,235
Net asset value,
offering, and
redemption price
per share $18.38 $13.72 $10.95 $14.37
</TABLE>
The accompanying notes are an integral part
of the financial statement.
<PAGE>
STATEMENTS OF OPERATIONS
Six Months Ended June 30, 1997
(Unaudited)
<TABLE>
<CAPTION>
S&P 500
Equity Capital Bond Index
Portfolio Portfolio Portfolio Portfolio
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
INVESTMENT INCOME
Interest $ 708,997 $3,334,795 $3,374,684 $ 79,334
Dividends (net of
foreign withholding
taxes of $61,288;
$21,128; $0; $2,219) 2,171,087 599,866 -- 306,578
---------- ---------- ---------- ----------
2,880,084 3,934,661 3,374,684 385,912
---------- ---------- ---------- ----------
EXPENSES
Investment advisory fees 808,766 528,925 204,142 53,162
Custodial fees and expenses 34,498 19,965 12,509 6,865
Portfolio accounting fees 25,103 23,841 19,383 15,257
Professional fees 3,870 4,532 4,114 16,122
Director's fees 6,752 6,752 5,899 7,023
Transfer agent fees 4,023 4,169 4,087 3,544
Registration and
filing fees 5,888 2,085 53 300
Other 18,407 12,420 8,752 426
---------- ---------- ---------- ----------
907,307 602,689 258,939 102,699
Fees waived by the Adviser -- -- -- (3,002)
---------- ---------- ---------- ----------
907,307 602,089 258,939 99,697
NET INVESTMENT INCOME 1,972,777 3,331,972 3,115,745 286,215
REALIZED AND UNREALIZED
GAIN/(LOSS)
Net realized gain
on investments 22,144,959 2,798,788 521,815 203,438
Net realized gain
on futures contracts -- -- -- 452,200
---------- ---------- ---------- ----------
22,144,959 2,798,788 521,815 655,638
---------- ---------- ---------- ----------
Net change in unrealized
appreciation/(depreciation)
of investments (610,487) (2,524,282) (343,006) 5,540,713
Net change in unrealized
appreciation/(depreciation)
of futures contracts -- -- -- 235,975
---------- ---------- ---------- ----------
(610,487) (2,524,282) (343,006) 5,776,688
---------- ---------- ---------- ----------
NET REALIZED AND
UNREALIZED GAIN/(LOSS) 21,534,472 274,506 178,809 6,432,326
---------- ---------- ---------- ----------
NET INCREASE IN NET ASSETS
FROM OPERATIONS $23,507,249 $3,606,478 $3,294,554 $6,718,541
=========== ========== ========== ==========
</TABLE>
The accompanying notes are an integral part of
the financial statements.
<PAGE>
CARILLON FUND, INC.
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
Equity Portfolio
For the Six Months For the Year Ended
Ended June 30, December 31,
--------------------------------------
(Unaudited)
1997 1996
------------ ------------
<S> <C> <C>
OPERATIONS
Net investment income $ 1,972,777 $ 4,176,431
Net realized gain on investments 22,144,959 34,227,538
and futures
Net change in unrealized
appreciation/(depreciation)
on investments and
futures contracts (610,487) 17,468,047
------------ ------------
23,507,249 55,872,016
------------ ------------
DISTRIBUTIONS TO SHAREHOLDERS
Net investment income (2,526,115) (3,889,965)
In excess of net investment income -- --
Net realized gain on investments (34,344,113) (9,867,342)
------------ ------------
(36,870,228) (13,757,307)
------------ ------------
FUND SHARE TRANSACTIONS
Proceeds from shares sold 14,569,057 41,762,282
Net asset value of shares
issued to shareholders
in reinvestment distributions 36,870,228 13,757,307
Payments for shares redeemed (16,369,695) (29,073,822)
------------ ------------
35,069,590 26,445,767
------------ ------------
NET INCREASE IN NET ASSETS 21,706,611 68,560,476
NET ASSETS
Beginning of year 288,123,723 219,563,247
------------ ------------
End of year $309,830,334 $288,123,723
============ ============
FUND SHARE TRANSACTIONS:
Sold 784,912 2,393,015
Issued in reinvestment
of distributions 2,187,096 809,878
Redeemed (927,682) (1,660,244)
------------ ------------
Net increase from fund
share transactions 2,044,326 1,542,649
------------ ------------
</TABLE>
The accompanying notes are an integral part of
the financial statements.
<PAGE>
CARILLON FUND, INC.
STATEMENTS OF CHANGES IN NET ASSETS
Capital Portfolio
<TABLE>
<CAPTION>
For the Six Months For the Year Ended
Ended June 30, December 31,
--------------------------------------
(Unaudited)
1997 1996
------------ ------------
<S> <C> <C>
OPERATIONS
Net investment income $ 3,331,972 $ 6,684,340
Net realized gain on investments
and futures 2,798,788 12,459,745
Net change in unrealized
appreciation/(depreciation) on
investments and future contracts (2,524,282) 1,990,613
------------ ------------
3,606,478 21,134,698
------------ ------------
DISTRIBUTIONS TO SHAREHOLDERS
Net investment income (3,959,663) (6,050,397)
In excess of net investment income -- --
Net realized gain on investments (12,519,532) (2,002,549)
------------ ------------
(16,479,195) (8,052,946)
------------ ------------
FUND SHARE TRANSACTIONS
Proceeds from shares sold 7,564,155 17,130,822
Net asset value of shares
issued to shareholders
in reinvestment of dividends
and distributions 16,479,194 8,052,945
Payments for shares redeemed (10,648,555) (24,594,141)
------------ ------------
13,394,794 589,626
------------ ------------
NET INCREASE IN NET ASSETS 522,077 13,671,378
NET ASSETS
Beginning of year 159,293,886 145,622,508
------------ ------------
End of year 159,815,963 159,293,886
============ ============
FUND SHARE TRANSACTIONS:
Sold 533,306 1,199,385
Issued in reinvestment of
dividends and distributions 1,222,104 570,034
Redeemed (762,361) (1,729,493)
------------ ------------
Net increase from fund
share transactions 993,049 39,926
============ ============
</TABLE>
The accompanying notes are an integral part of
the financial statements.
<PAGE>
CARILLON FUND, INC.
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
Bond Portfolio
For the Six Months For the Year Ended
Ended June 30, December 31,
--------------------------------------
(Unaudited)
1997 1996
------------ ------------
<S> <C> <C>
OPERATIONS
Net investment income $ 3,115,745 $ 5,766,633
Net realized gain on investments
and futures 521,815 1,210,173
Net change in unrealized
appreciation/(depreciation)
on investments and
futures contracts (343,006) (1,316,722)
------------ ------------
3,294,554 5,660,084
------------ ------------
DISTRIBUTIONS TO SHAREHOLDERS
Net investment income (2,517,892) (6,340,623)
In excess of net investment income -- (320,260)
Net realized gain on investments (481,253) --
------------ ------------
(2,999,145) (6,660,883)
------------ ------------
FUND SHARE TRANSACTIONS
Proceeds from shares sold 5,884,551 17,850,341
Net asset value of shares
issued to shareholders
in reinvestment of dividends
and distributions 2,999,145 6,660,883
Payments for shares redeemed (6,798,740) (11,443,995)
------------ ------------
2,084,956 13,067,229
------------ ------------
NET INCREASE IN NET ASSETS 2,380,365 12,066,430
NET ASSETS
Beginning of year 85,634,259 73,567,699
------------ ------------
End of year 88,014,624 85,634,129
============ ============
FUND SHARE TRANSACTIONS:
Sold 538,925 1,633,803
Issued in reinvestment of
dividends and distributions 276,691 621,662
Redeemed (624,986) (1,054,560)
------------ ------------
Net increase from
fund share transactions 190,630 1,200,905
------------ ------------
</TABLE>
The accompanying notes are an integral part of
the financial statements.
<PAGE>
CARILLON FUND, INC.
STATEMENTS OF CHANGES IN NET ASSETS
S&P 500 Index Portfolio
<TABLE>
<CAPTION>
For the Six Months For the Year Ended
Ended June 30, December 31,
--------------------------------------
(Unaudited)
1997 1996
------------ ------------
<S> <C> <C>
OPERATIONS
Net investment income $ 286,215 $ 349,515
Net realized gain on
investments and futures 655,638 218,750
Net change in unrealized
appreciation/(depreciation) on
investments and futures contracts 5,776,688 3,030,849
------------ ------------
6,718,541 3,599,114
------------ ------------
DISTRIBUTIONS TO SHAREHOLDERS
Net investment income (307,039) (307,386)
In excess of net investment income -- --
Net realized gain on investments (270,297) --
------------ ------------
(577,336) (307,386)
------------ ------------
FUND SHARE TRANSACTIONS
Proceeds from shares sold 13,103,230 30,917,430
Net asset value of shares
issued to shareholders
in reinvestment of dividends
and distributions 577,335 307,386
Payments for shares redeemed (5,790,287) (5,617,082)
------------ ------------
7,890,278 25,607,734
------------ ------------
NET INCREASE IN NET ASSETS 14,031,483 28,899,462
NET ASSETS
Beginning of year 29,204,610 305,148
------------ ------------
End of year 43,236,093 29,204,610
============ ============
FUND SHARE TRANSACTIONS:
Sold 993,940 2,850,416
Issued in reinvestment of
dividends and distributions 44,389 26,989
Redeemed (436,596) (500,402)
------------ ------------
Net increase from
fund share transactions 601,733 2,377,003
============ ============
</TABLE>
The accompanying notes are an integral part of
the financial statements.
<PAGE>
CARILLON FUND, INC.
SCHEDULE OF INVESTMENTS
JUNE 30, 1997
(Unaudited)
EQUITY PORTFOLIO
<TABLE>
<CAPTION>
SHARES VALUE
------ -----
<S> <C> <C>
COMMON STOCKS - 91.10%
BANKING & FINANCIAL SERVICE - 14.92%
Allied Capital Corporation 28,571 457,124
Banco BHIF ADR 75,000 1,584,375
Banco Latinoamericano
De Exportanciones Sponsored ADR 54,700 2,358,938
Bank United Financial Corporation* 140,000 1,382,500
Charter One Financial, Incorporated 52,500 2,828,438
Chile Fund Incorporated* 80,000 2,090,000
Corus Bankshares, Incorporated 12,500 353,125
Czech Republic Fund 109,000 1,498,750
Deutsche Bank AG Sponsored ADR 42,000 2,456,076
Fahnestock Viner Holdings 150,000 2,831,250
First Bell Bancorp, Incorporated 15,000 248,750
FPIC Insurance Group, Incorporated* 172,500 3,881,250
Gainsco, Incorporated 217,762 2,041,519
Hamilton Bancorp, Incorporated* 100,000 2,675,000
Jefferies Group, Incorporated 64,000 2,850,000
Korea Fund, Incorporated 139,517 2,057,876
Penncorp Financial Group Corporation 95,000 3,657,500
Protective Life Corporation 40,000 2,010,000
RLI Corporation 43,625 1,589,586
Raymond James Financial Corporation 99,150 2,714,231
Thai Fund, Incorporated 145,655 2,239,446
Washington Federal, Incorporated 93,610 2,404,607
-----------
46,210,341
-----------
CAPITAL GOOD - 6.44%
AFC Cable Systems, Incorporated* 100,000 2,700,000
AGCO Corporation 59,400 2,134,688
Fibermark, Incorporated 90,000 1,878,750
Greif Brothers Corporation 82,800 2,235,600
Griffon Corporation 209,600 2,868,900
Holophane Corporation* 50,000 1,000,000
Lindsay Manufacturing Company 176,793 5,789,971
LSI Industries 100,000 1,350,000
-----------
19,957,909
-----------
CONSUMER CYCLICAL - 17.75%
Breed Technologies 125,000 2,875,000
Cemex SA -- Sponsored ADR* 200,000 1,925,938
Chromcraft Revington, Incorporated* 75,000 2,146,875
Claire's Stores, Incorporated 50,000 875,000
Conso Products Company 146,250 1,791,563
CULP, Incorporated 64,300 1,165,438
D.R. Horton, Incorporated 150,000 1,556,250
Devon Group, Incorporated* 85,000 3,038,750
Fila Holdings 50,000 1,671,875
Footstar, Incorporated* 110,000 2,873,750
Friedman's, Incorporated* 130,000 2,973,750
Helen of Troy, Bermuda* 99,000 2,536,875
Intermet Corporation 125,000 2,007,813
Kevco, Incorporated* 140,000 1,890,000
Medusa Corporation 80,300 3,081,513
NCI Building Systems, Incorporated* 80,700 2,612,663
Roberds, Incorporated* 90,000 472,500
Schult Homes 98,060 1,556,703
Scientific Games
Holdings Corporation* 72,600 1,497,375
Southern Energy Homes 217,000 1,980,125
Stanley Furniture Company* 61,000 1,410,625
Strattec Security Corporation* 145,000 2,990,625
Toll Brothers* 90,000 1,653,750
Tractor Supply Company* 30,000 540,000
Triangle Pacific Corporation* 92,500 2,960,000
Winsleow Furniture, Incorporated* 188,300 2,059,531
York Group, Incorporated 152,500 2,859,375
-----------
55,003,662
-----------
CONSUMER NON-DURABLE -7.94%
Advocat, Incorporated* 100,500 1,143,188
Complete Management, Incorporated* 120,000 1,710,000
Dairy Farm International Holdings
Sponsored ADR 200,000 750,000
Equity Marketing, Incorporated* 105,500 2,479,250
GT Bicycles, Incorporated* 175,000 1,400,000
ICN Pharmeaceuticals, Incorporated 106,600 3,058,088
IHOP Corporation* 87,000 2,697,000
Lone Star Steakhouse* 70,000 1,820,000
Oakley, Incorporated* 123,500 1,732,500
Orthofix International NV* 113,036 1,172,748
Schlotzsky's, Incorporated* 152,900 2,102,375
Standard Commercial Corporation 90,000 1,563,750
VISX, Incorporated* 45,000 1,068,750
VTECH Holdings Limited 100,000 1,884,530
-----------
24,582,179
-----------
ENERGY - 12.00%
Callon Petroleum Company* 110,000 1,760,000
Cross Timbers Oil Company 105,000 2,021,250
Giant Industries, Incorporated 205,000 3,241,563
Global Industries, Incorporated* 50,000 1,167,969
Gulf Island Fabrication, Incorpated* 110,000 2,818,750
Holly Corporation 90,000 2,233,125
KCS Energy, Incoporated 104,000 2,119,000
Maverick Tube Corporation* 83,000 3,112,500
Offshore Logistics, Incorporated* 83,000 2,265,000
Plains Resources, Incorporated* 119,500 1,762,625
Southern Mineral Corporation* 350,000 1,750,000
St. Mary Land & Exploration 60,000 2,107,500
Stone Energy Corporation* 93,900 2,570,513
Vastar Resources Incorporated 50,000 1,753,125
YPF S.A. Sponsored ADR 145,400 4,471,050
Zeigler Coal Holdings Company 87,000 2,033,625
-----------
37,187,595
-----------
MANUFACTURING -7.96%
ABT Building Products Company* 145,000 3,806,250
AEP Industries, Incorporated* 72,550 2,902,000
BWAY Corporation* 110,000 2,557,500
Bayer A G Sponsored ADR 75,000 2,884,589
Buckeye Cellulose Corporation* 51,000 1,721,250
Charoen Pok Feedmill 100,000 1,019,099
Matthews International
Corporation - Class A 77,000 2,810,500
Minorco Sponsored ADR 90,000 2,075,625
Mueller Industries* 35,000 1,531,250
Northwest Pipe Company* 32,000 588,000
Sybron Chemicals, Incorporated* 65,200 1,271,400
Wolverine Tube, Incorporated* 53,000 1,477,375
-----------
24,644,838
-----------
REAL ESTATE - 10.54%
Associated Estates Realty Corporation 65,000 1,527,500
City Developments Limited 150,000 1,468,679
Commercial Net Lease Realty 99,300 1,520,531
Evans Withycombe Residential 92,000 1,909,000
Health Care Property Investments,
Incorporated 42,600 1,501,650
Health and Retirement Property Trust 75,000 1,410,938
Health Care Realty Trust 61,400 1,711,525
Hospitality Properties Trust 64,000 1,960,000
IRT Property Company 172,300 2,024,525
Lexington Corporation Properties 100,000 1,400,000
Merry Land & Investment Company 115,000 2,494,063
Mid-America Apartment Communities 80,000 2,245,000
National Health Investors,
Incorporated 40,000 1,570,000
Oasis Residential, Incorporated 58,000 1,363,000
Pacific Gulf Properties 74,000 1,628,000
Trinet Corporate Realty
Trust Incorporated 58,000 1,917,625
United Dominion Realty
Trust Incorporated 168,000 2,383,500
Winston Hotels, Incorporated 175,000 2,635,938
-----------
32,671,474
-----------
TECHNOLOGY - 7.09%
Applied Voice Technology* 84,500 1,563,250
Carbide Graphite Group Incorporated* 130,000 3,022,500
CPAC, Incorperated* 200,000 2,425,000
Cybex Corporation* 160,000 2,840,000
DH Technology, Incorporated* 200,000 3,250,000
Kemet Corporation* 60,000 1,492,500
Nam Tai Electronics, Incorporated* 187,500 3,117,188
Recoton Corporation* 163,000 2,129,187
Vertex Communications Corporation* 80,000 2,140,000
-----------
21,979,625
-----------
TRANSPORTATION - 4.51%
Atlantic Southeast Airlines
Incorporated 95,000 2,719,375
Comair Holdings, Incorporated 115,000 3,184,063
Illinois Central Corporation - Class A 82,500 2,882,344
Landstar, Incorporated* 90,000 2,531,250
Midwest Express Holdings 97,500 2,669,063
-----------
13,986,095
-----------
UTILITY - 1.95%
CMS Energy Corporation 40,500 1,427,625
IES Industries, Incorporated 48,600 1,434,300
Rochester Gas and Electric 75,000 1,579,688
Tuscon Electric Power Company* 110,000 1,595,000
-----------
6,036,613
-----------
Total Common Stocks (cost $222,487,657) $282,260,331
-----------
SHORT-TERM INVESTMENTS - 9.20%
<CAPTION>
PRINCIPAL VALUE
--------- -----
<S> <C> <C>
COMMERCIAL PAPER - 6.00%
Merrill Lynch and Company
(5.430% due 11/26/97) $2,000,000 $1,955,353
Financial Federal
(5.700% due 10/31/97) 2,000,000 1,961,367
Financial Federal
(5.750% due 12/01/97) 1,000,000 975,563
GMAC (5.730% due 10/06/97) 2,000,000 1,969,122
Greenwich Funding Corporation
(5.640% due 9/22/97) 1,500,000 1,480,495
Hertz Corporation
(5.560% due 01/08/98) 2,000,000 1,941,002
Progress Funding Corporation
(5.730% due 9/18/97) 1,000,000 987,426
Cargill Financial Services
Corporation (5.410% due 11/26/97) 2,000,000 1,955,518
Ford Motor Credit
(5.690% due 01/27/98) 2,000,000 1,933,617
Orix Credit Alliance
(5.650% due 09/19/97) 2,000,000 1,974,889
International Lease Financial
Corporation (5.45% due 11/17/1997) 1,500,000 1,468,435
-----------
18,602,787
-----------
VARIABLE RATE DEMAND NOTES<F1> - 3.20%
Johnson Controls, Inc.
(5.276% due 00/00/00) 2,420,210 2,420,210
Warner Lambert (5.226% due 00/00/00) 3,210,109 3,210,110
General Mills, Inc.
(5.245% due 00/00/00) 2,548,821 2,548,822
American Family Financial Services
(5.256% due 00/00/00) 606,286 606,287
Pitney Bowes Credit Corp
(5.225% due 00/00/00) 567,300 567,300
Wisconsin Electric Power Co.
(5.965 due 00/00/00) 543,349 543,349
-----------
9,896,078
-----------
Total Short-Term Investments
(cost $28,498,865) 28,498,865
-----------
TOTAL INVESTMENTS - 100.30%
(cost $250,986,522)<F2> 310,759,196
-----------
OTHER ASSETS AND LIABILITIES - (.30)% (928,862)
-----------
TOTAL NET ASSETS - 100% $309,830,334
===========
____________
*Non-income producing
(ADR) American Depository Receipt
<FN>
<F1> Interest rates vary periodically based on current market rates. The
maturity shown for each variable rate demand note is the later of the next
scheduled interest rate adjustment date or the date on which principal can be
recovered through demand. Information as of June 30 1997.
<F2> Represents cost for Federal income tax purposes. Gross unrealized
appreciation and depreciation of securities at June 30,1997 or financial
reporting purposes was $68,112,935 and $8,340,261.
</FN>
</TABLE>
The accompanying notes are an integral part of
the financial statements.
<PAGE>
Carillon Fund, Inc.
Schedule of Investments
JUNE 30, 1997
(Unaudited)
<TABLE>
<CAPTION>
CAPITAL PORTFOLIO
COMMON STOCKS - 34.70% SHARES/
PRINCIPAL VALUE
--------- -----------
<S> <S> <S>
BANKING & FINANCIAL SERVICE - 9.88%
Allied Capital Corporation 34,285 $ 548,560
Banco BHIF ADR 50,000 1,056,250
Banco Latinoamericano
de Exportaciones ADR 3,900 168,176
Black Rock Strategic Term Trust 75,000 609,375
Charter One Financial Incorporated 42,000 2,262,750
Chile Fund* 33,000 862,125
Corus Bankshares Incorporated 6,000 169,500
Deutsche Bank AG Sponsored ADR 12,000 701,736
Fahnestock Viner Holdings 70,000 1,321,250
FPIC Insurance Group Incorporated* 65,000 1,462,500
Korea Fund 83,792 1,235,932
New Germany Fund 79,789 1,256,677
Penncorp Financial Group
Incorporated 24,000 924,000
Templeton Global Income Fund 125,000 937,500
Thai Fund Incorporated 55,566 854,327
Washington Federal Incorporated 55,000 1,412,812
-----------
15,783,470
-----------
CAPITAL GOOD - 2.26%
Griffon Corporation 55,000 752,813
Lindsay Manufacturing Incorporated 49,362 1,616,606
Strattec Security Corporation* 60,000 1,237,500
-----------
3,606,919
-----------
CONSUMER CYCLICAL -2.21%
Chromcraft Revington Incorporated* 25,000 715,625
Evans Withycombe Residential 39,000 809,250
NCI Building Systems Incorporated* 35,000 1,133,125
Winsleow Furniture Incorporated* 80,000 875,000
-----------
3,533,000
-----------
CONSUMER NON-DURABLE -1.08%
GT Bicycles Incorporated* 80,000 640,000
IHOP Corporation* 35,000 1,085,000
-----------
1,725,000
-----------
ENERGY - 4.25%
Callon Petroleum Company* 35,000 560,000
Cross Timbers Oil Company 27,450 528,413
Giant Industries Incorporated 87,400 1,382,013
KCS Energy Incorporated 42,000 855,750
Offshore Logistics Incorporated* 47,000 887,125
Stone Energy Corporation* 27,000 739,125
YPF S.A. Sponsored ADR 60,000 1,845,000
-----------
6,797,426
-----------
MANUFACTURING - 7.01%
ABT Building Products Company* 45,000 1,181,250
AEP Industries, Incorporated* 30,831 1,233,240
Bway Corporation* 44,000 1,023,000
Carbide Graphite Group* 60,000 1,395,000
Coeur D Alene Mines 52,000 672,756
Matthews International 2,500 91,250
Newmont Mining Corporation 35,050 1,366,950
Royal Oak Mines Incorporated* 125,000 296,875
TVX Gold Incorporated* 195,000 1,035,938
Vaal Reefs Exploration
& Mining Limited ADR 120,100 577,981
York Group Incorporated 62,000 1,162,500
Zeigler Coal Holding Company 50,000 1,168,750
-----------
11,205,490
-----------
REAL ESTATE - 6.15%
Associated Estates
Realty Corporation 50,000 1,175,000
City Developments 95,000 930,163
Hospitality Properties Trust 33,000 1,010,625
LTC Properties Incorporated 46,000 833,750
Merry Land & Investment Company 60,000 1,301,250
Mid-America Apartment Communities 40,000 1,122,500
Pacific Gulf Properties 43,500 957,000
United Dominion Realty Trust 75,000 1,064,063
Winston Hotels Incorporated 95,000 1,430,938
-----------
9,825,289
-----------
TECHNOLOGY - 1.86%
AFC Cable Systems Incorporated* 19,000 513,000
DH Technology, Incorporated* 94,760 1,539,850
Vertex Communications Corporation* 34,100 912,175
-----------
2,965,025
-----------
Total Common Stocks (cost $46,839,264) 55,441,619
-----------
PREFERRED STOCKS - .39%
MANUFACTURING -.39%
Freeport McMoRan Copper
& Gold Series 20,000 617,500
Total Preferred Stock (cost $709,838) 617,500
-----------
U.S. TREASURY OBLIGATIONS - 16.65%
7.875% due 04/15/98 $ 500,000 508,125
5.750% due 12/31/98 2,000,000 1,993,750
5.500% due 02/28/99 1,000,000 991,563
6.000% due 10/15/99 5,900,000 5,888,938
5.750% due 10/31/00 1,000,000 984,063
7.500% due 11/15/01 500,000 521,094
6.375% due 08/15/02 1,750,000 1,748,906
5.750% due 08/15/03 3,000,000 2,896,875
5.875% due 02/15/04 100,000 96,875
7.250% due 05/15/04 3,500,000 3,647,658
7.875% due 11/15/04 6,800,000 7,335,500
-----------
Total U.S. Treasury Notes
($26,376,144) 26,613,347
-----------
COLLATERALIZED MORTGAGE
OBLIGATIONS - 11.24%
FEDERAL HOME LOAN
MORTGAGE CORPORATION - 3.14%
1662 H (6.250% due 01/15/09) 959,423 945,377
1442 FA (6.480% due 11/15/07)<F1> 1,000,000 981,083
1559 VP (5.500% due 02/15/20) 1,700,000 1,628,396
1399 PAC (7.000% due 09/15/22) 596,484 574,662
1631 SB (5.850% due 12/15/23) 1,450,000 888,680
-----------
5,018,198
-----------
<PAGE>
FEDERAL NATIONAL MORTGAGE
ASSOCIATION - 7.78%
Remic 93-12 ED
(7.500% due 02/25/06) 1,645,000 $ 1,687,145
Remic 1992-163 PN
(7.000% due 07/25/07) 1,500,000 1,501,620
Remic 92-117 J
(7.500% due 07/25/20) 1,000,000 1,011,628
Remic 92-119 E
(8.000% due 07/25/20) 1,000,000 1,024,020
Remic 92-112E
(8.000% due 12/25/20) 1,500,000 1,540,946
Remic 93-127 FA
(5.930% due 10/25/21)<F1> 1,000,000 963,110
Remic 1992-39 FB
(6.530% due 03/25/22)<F1> 2,000,000 1,975,701
Remic 92-66 F
(6.219% due 05/25/22)<F1> 914,116 915,412
Remic 1993-119 SB
(6.808% due 07/25/23)<F1> 2,572,882 1,817,284
-----------
12,436,866
-----------
PRIVATE SECTOR - .32%
Prudential Home Mortgage Securities
(7.500% due 07/25/10) 506,988 504,610
-----------
Total Collateralized Mortgage
Obligations (cost $18,372,000) 17,959,674
-----------
MORTGAGE - BACKED SECURITIES - 8.75%
FEDERAL HOME LOAN
MORTGAGE CORPORATION - .76%
7.500% due 06/01/07 39,450 39,723
9.500% due 10/01/08 202,360 215,806
8.250% due 03/01/12 108,680 112,266
8.500% due 03/01/16 91,603 95,400
7.500% due 07/01/17 47,255 47,453
11.000% due 04/01/19 52,498 58,570
11.000% due 11/01/19 53,211 59,366
11.000% due 05/01/20 201,492 224,710
11.000% due 06/01/20 329,392 367,632
-----------
1,220,926
-----------
FEDERAL NATIONAL MORTGAGE
ASSOCIATION - 7.67%
10.000% due 02/01/04 4,477 4,782
9.500% due 09/01/05 132,297 138,449
9.000% due 11/01/05 53,926 56,161
7.500% due 03/25/07 1,200,000 1,221,561
8.000% due 05/01/07 132,106 136,137
6.000% due 12/01/08 816,923 793,257
5.500% due 01/01/09 849,387 806,290
6.000% due 03/01/09 925,411 898,602
5.500% due 04/01/09 613,202 579,317
6.500% due 02/01/26 775,991 742,701
6.500% due 03/01/26 200,580 191,976
7.000% due 03/01/26 1,883,824 1,847,523
7.000% due 07/01/26 1,924,489 1,886,005
7.500% due 07/01/26 2,944,095 2,950,543
-----------
12,253,304
-----------
<PAGE>
GOVERNMENT NATIONAL
MORTGAGE ASSOCIATION - .32%
9.000% due 11/15/16 $ 89,874 $ 96,503
10.500% due 11/20/19 263,085 292,080
9.000% due 12/15/19 115,037 123,188
-----------
511,771
-----------
Total Mortgage Backed Securities
(cost $13,406,326) 13,986,001
-----------
CORPORATE BONDS AND NOTES - 2.85%
COMMUNICATIONS AND MEDIA - .58%
Lowen Group International, Inc.
(8.250% due 04/15/03) 900,000 928,494
-----------
FINANCE COMPANY - .39%
Zions Trust (8.536% due 12/15/26)<F1> 600,000 618,153
-----------
OIL & GAS EXPLORATION SERVICES - .13%
Maxus Debentures
(11.250% due 05/01/13) 208,000 213,200
-----------
REAL ESTATE - .32%
GE Capital Marketing Services, Inc.
(6.000% due 08/25/09) 552,188 518,196
-----------
TELEPHONE & TELECOMMUNICATIONS - .66%
TCI Communications Inc
(8.650% due 09/15/04) 1,000,000 1,058,984
-----------
UTILITIES - ELECTRIC - .77%
New Orleans Public Service Inc.
1st Mtg. (8.670% due 04/01/05)<F1> 1,200,000 1,225,889
-----------
Total Corporate Bonds
(cost $ 4,388,737) 4,562,916
-----------
SHORT-TERM INVESTMENTS - 24.93%
COMMERCIAL PAPER - 16.12%
Cargill Financial Services
Corporation (5.410% due 11/26/97) 2,000,000 1,955,600
Case Credit Corporation
(5.800% due 08/25/97) 1,500,000 1,486,708
Credit Suisse First Boston
(5.730% due 10/17/97) 1,500,000 1,474,215
CSX (5.770% due 07/10/97) 2,000,000 1,997,115
Daimler Benz NA Corporation
(5.670% due 09/09/97) 2,000,000 1,977,950
Electronic Data System
(5.630% due 07/31/97) 2,000,000 1,990,617
Ford Motor Company
(5.320% due 07/07/97) 2,500,000 2,497,675
GMAC (5.660% due 12/31/97) 1,000,000 971,228
Houston Industries
(5.800% due 07/07/97) 1,000,000 999,033
IBM Credit (5.560% due 08/08/97) 2,000,000 1,988,880
Illinois Power Company
(5.800% due 07/29/97) 2,000,000 1,990,978
Madison Funding Corporation
(5.640% due 07/14/97) 2,000,000 1,995,927
Merrill Lynch and Company
(5.430% due 11/26/97) 1,000,000 977,677
Nationwide Building
(5.690% due 08/11/97) 1,500,000 1,490,280
Orix Credit Alliance
(5.650% due 09/19/97) 2,000,000 1,974,889
-----------
25,768,772
-----------
VARIABLE RATE DEMAND NOTES - 8.81%
American Family Financial
Services, Inc. (5.2562% due 07/02/97) 1,484,666 1,484,666
General Mills Incorporated
(5.245% due 07/02/97) 62,752 62,752
Johnson Controls, Inc.
(5.2760% due 07/02/97) 4,983,151 4,983,151
Pitney Bowes Credit Corporation
(5.2551% due 07/02/97) 560,874 560,874
Warner Lambert (5.226% due 07/02/97) 5,450,773 5,450,773
Wisconsin Electric Power Company
(5.549% due 01/01/97) 1,536,603 1,536,603
-----------
14,078,819
-----------
Total Short Term Investments
(cost $39,847,591) 39,847,591
-----------
TOTAL INVESTMENTS - 99.51%
(cost $149,939,900)<F2> 159,028,648
-----------
OTHER ASSETS AND LIABILITIES - .49% 787,315
-----------
TOTAL NET ASSETS - 100% $159,815,963
============
_______________
Non-Income producing
(ADR) American Depository Receipt
<FN>
<F1> Interest rates vary periodically based on current market rates. Rates
shown are as of June 30, 1997. The maturity shown for each variable rate
demand note is the later of the next scheduled interest rate adjustment
date or the date on which principal can be recovered through demand.
Information shown is as of June 30, 1997.
<F2> Gross unrealized appreciation and depreciation of securities at June
30, 1997 for financial reporting purposes was $12,433,734 and $3,344,986
respectively; tax amounts were substantially the same.
</FN>
</TABLE>
The accompanying notes are an integral part
of the financial statements.
<PAGE>
CARILLON FUND, INC.
SCHEDULE OF INVESTMENTS
June 30, 1997
(Unaudited)
BOND PORTFOLIO
<TABLE>
<CAPTION>
U.S. TREASURY OBLIGATIONS - 33.47% SHARES/
PRINCIPAL VALUE
--------- -----
<S> <C> <C>
U.S. TREASURY BOND - 2.03%
6.000% due 02/15/26 $2,000,000 $ 1,789,375
-----------
U.S. TREASURY NOTES - 26.65%
6.000% due 10/15/99 4,000,000 3,992,500
6.700% due 04/30/00 2,000,000 2,026,250
7.750% due 02/15/01 2,500,000 2,615,625
5.625% due 02/28/01 2,000,000 1,956,250
5.875% due 11/15/05 5,000,000 4,784,375
7.000% due 07/15/06 5,000,000 5,143,750
6.250% due 02/15/07 3,000,000 2,934,375
23,453,125
-----------
U.S. TREASURY STRIPS - 4.79%
0.000% due 02/15/00 3,250,000 2,766,692
0.000% due 08/15/02 2,000,000 1,448,220
-----------
4,214,912
Total U.S. Treasury Obligations
(cost $29,412,404) 29,457,412
-----------
MORTGAGE - BACKED SECURITIES - 3.10%
FEDERAL HOME LOAN
MORTGAGE CORPORATION - 1.01%
7.500% due 02/01/02 39,345 39,812
9.500% due 04/01/05 70,650 74,028
7.500% due 06/01/07 86,826 87,426
11.000% due 05/01/10 11,080 12,334
12.500% due 08/01/10 16,401 18,769
8.000% due 11/01/16 46,309 47,365
9.500% due 02/01/18 75,613 80,788
6.500% due 07/01/23 549,494 530,877
-----------
891,399
-----------
FEDERAL NATIONAL MORTGAGE
ASSOCIATION - 1.91%
12.000% due 04/01/00 60,942 65,284
9.000% due 08/01/01 46,473 48,346
8.500% due 01/01/02 43,959 45,456
10.500% due 06/01/04 12,259 12,998
10.500% due 05/01/05 184,966 196,122
6.500% due 06/01/08 1,055,197 1,040,403
8.000% due 08/01/17 267,939 273,716
-----------
1,682,325
-----------
GOVERNMENT NATIONAL MORTGAGE
ASSOCIATION - .18%
11.000% due 03/15/10 60,550 66,491
9.000% due 05/15/20 81,070 85,605
-----------
152,096
-----------
Total Mortgage-Backed Securities
(cost $2,686,975) 2,725,820
-----------
COLLATERALIZED MORTGAGE
OBLIGATIONS - 6.75%
FEDERAL HOME LOAN MORTGAGE
CORPORATION - 3.51%
59 E (8.900% due 11/15/20) $1,008,875 $ 1,051,541
106 G (8.250% due 12/15/20) 1,000,000 1,038,248
1770 B (8.250% due 01/15/24) 1,000,000 1,002,701
-----------
3,092,490
-----------
FEDERAL NATIONAL MORTGAGE
ASSOCIATION - .23%
Remic (9.500% due 12/25/18) 190,981 202,622
-----------
PRIVATE SECTOR - 3.01%
Securitized Asset Sales, Inc.
(6.500% due 07/25/08) 296,484 282,680
CMC Securities Corp.
(0.000% due 12/25/08) 375,009 279,202
Country Wide Mortgage-Backed
Securities, Inc.(6.000% due 03/01/09) 851,430 795,022
Capstead Mortgage Securities Corp.
(10.950% due 02/01/14) 192,504 193,219
NWA Trust No. 2 Class B
(10.230% due 06/21/14) 938,462 1,099,340
-----------
2,649,463
-----------
Total Collateralized Mortgage
Obligations (cost $5,566,249) 5,944,575
-----------
CORPORATE BONDS AND NOTES - 48.27%
AIR TRANSPORTATION - 1.15%
Continental Airlines
(7.820% due 10/15/23) 980,392 1,008,765
-----------
BANK & BANK HOLDING COMPANIES - 1.17%
NationsBank Corp.
(7.625% due 04/15/05) 1,000,000 1,030,183
-----------
BUILDING PRODUCTS - .57%
Falcon Building Products
(9.5000% due 06/15/07) 500,000 497,500
-----------
COMMUNICATIONS AND MEDIA - 11.73%
Adelphia Communications
(12.500% due 05/15/02) 1,000,000 1,061,250
Call-Net Enterprises
(0.000% due 12/01/04) 1,250,000 1,079,688
CF Cable TV Inc.
(9.125% due 07/15/07) 1,000,000 1,070,000
Continental Cablevision
(8.300% due 05/15/06) 1,000,000 1,060,739
Jones Intercable, Inc.
(9.625% due 03/15/02) 500,000 505,000
Neodata Service
(12.000% due 05/01/03) 1,000,000 1,075,000
Peoples Choice TV
(0.000% due06/01/04) 1,000,000 365,000
Spanish Broadcasting Systems
(11.000% due 03/15/04) 1,000,000 1,050,000
Time Warner Inc.
(8.110% due 08/15/06)<F2> 1,000,000 1,042,947
Talton Holdings Incorporated
(11.000% due 06/30/07) 1,000,000 1,010,000
Viacom Incorporated
(7.750% due 06/01/05) 1,000,000 1,003,667
-----------
10,323,291
-----------
CONSUMER PRODUCTS - 1.05%
Coleman Holdings (0.000% due 05/27/98) 1,000,000 923,750
-----------
FINANCE COMPANIES - 7.48%
Ahmanson Capital Trust
(8.360% due 12/01/26)<F2> 1,500,000 1,491,684
Conseco Finance
(8.796% due 04/01/27)<F2> 1,500,000 1,542,532
Prudential Insurance
(8.100% due 07/15/15) 1,000,000 1,002,775
USF&G (8.470% due 01/10/27)<F2> 1,000,000 1,002,128
Zions Trust (8.536% due 12/15/26)<F2> 1,500,000 1,545,384
-----------
6,584,503
-----------
FOOD, BEVERAGE, & TOBACCO - 2.24%
RJR Nabisco, Inc.
(7.625% due 09/15/03) 500,000 483,870
Great American Cookie, Inc.
(10.875% due 01/15/01) 500,000 505,000
Nabisco Inc. (7.550% due 06/15/15) 1,000,000 985,992
-----------
1,974,862
-----------
GAMING INDUSTRY - 4.47%
Argosy Gaming (13.250% due 06/01/04) $1,000,000 $ 962,500
Boomtown, Inc. 1st Mortgage
(11.500% due 11/01/03) 1,000,000 1,070,000
Casino Magic of Louisiana
(13.000% due 08/15/03) 1,000,000 845,000
Empress River Casino Finance Corp.
(10.750% due 04/01/02) 1,000,000 1,060,000
3,937,500
-----------
GROCERY INDUSTRY - .55%
Pueblo Xtra International
(9.5000% due 08/01/03) 500,000 480,000
-----------
HEALTH CARE - 1.72%
Columbia / HCA Healthcare Corp.
(7.690% due 06/15/25)<F2> 1,000,000 1,004,062
Foundation Health Corp.
(7.750% due 06/01/03) 500,000 514,119
-----------
1,518,181
-----------
INSURANCE - 3.04%
Berkley (W.R.) Corp.
(9.875% due 05/15/08) 500,000 593,441
Farmers Insurance Exhange
(8.500% due 04) 1,000,000 1,052,931
Leucadia National Corp.
(8.250% due 06/15/05) 1,000,000 1,032,965
-----------
2,679,337
-----------
MANUFACTURING - 3.75%
General Instrument Corporation
(5.000% due 06/15/00) 500,000 570,625
International Knife & Saw Corp.
(11.375% due 11/15/06) 1,000,000 1,067,500
International Wire Group Inc.
(11.750% due 06/01/05) 500,000 543,750
Terex Corp. (13.750% due 05/15/02) 1,000,000 1,122,500
-----------
3,304,375
-----------
MISCELLANEOUS - 1.22%
Allied Waste North America
(10.250% due 12/01/06) 1,000,000 1,070,000
-----------
OIL & GAS - DOMESTIC - .60%
Penzoil Company (9.625% due 11/15/99) 500,000 531,552
-----------
OIL & GAS - SERVICES - 2.95%
All Star Gas Corporation
(7.000% due 07/15/04) 1,000,000 870,000
Mitchell Energy Development Corp.
(6.750% due 02/15/04) 750,000 709,714
PDV America, Inc.
(7.750% due 08/01/00) 1,000,000 1,013,210
-----------
2,592,924
-----------
PAPER & FOREST PRODUCTS - 1.17%
Crown Paper (11.000% due 09/01/05) 500,000 500,000
Westvaco Corp. (10.300% due 01/15/19) 500,000 532,418
-----------
1,032,418
-----------
RETAIL - 2.16%
Pamida Incorporated
(11.750% due 03/15/03) 500,000 470,000
Shopko Stores (6.500% due 08/15/03) 1,500,000 1,427,181
-----------
1,897,181
-----------
STEELS AND METALS - 1.25%
Gulf States Steel
(13.500% due 04/15/03) 500,000 497,500
UCAR Global Enterprises Inc.
(12.000% due 01/15/05) 530,000 598,900
-----------
1,096,400
-----------
Total Corporate Bond and Notes
(cost $41,636,488) 42,482,722
-----------
COMMON STOCKS - .04%
ENERGY - .04%
Mesa Incorproated* 6,417 36,898
Total Common Stocks (cost $ 24,365) 36,898
-----------
WARRANTS - 0.00%
RETAIL-FOOD - 0.00%
Great American Cookie 90 $ 2,250
TECHNOLOGY - .00%
Terex Corporation Appreciation Rights 4,000 40
-----------
Total Warrants (cost $ 28,050) 2,290
-----------
PREFERRED STOCKS - 1.02%
BANKING AND FINANCIAL SERVICE - 1.02%
Earthshell Container Corporation
Series A
Cumulative Senior Convertible 8%<F1> 500 900,000
Total Preferred Stocks (cost $500,000) 900,000
-----------
SHORT TERM INVESTMENTS - 7.01%
COMMERCIAL PAPER - 5.68%
ConAgra, Incorporated
(5.770% due 07/03/97) 2,000,000 1,999,359
CSX (5.800% due 07/07/97) 1,000,000 999,033
Ford Motor Company
(5.3200% due 07/07/97) 1,000,000 999,063
Ford Motor Company
(5.6200% due 07/07/97) 1,000,000 998,907
-----------
4,996,362
-----------
VARIABLE RATE DEMAND
NOTES <F2> - 1.33%
American Family Financial
Services, Inc. (5.2562% due 07/02/97) 100 100
General Mills, Inc.
(5.2450% due 07/02/97) 309,612 309,612
Johnson Controls Inc.
(5.2760% due 07/02/97) 662,051 662,051
Pitney Bowes Credit Corp.
(5.2551% due 07/02/97) 144,846 144,846
Wisconsin Electric Power Co.
(5.2962% due 07/02/97) 49,831 49,831
-----------
1,166,440
-----------
Total Short-Term Investments
(cost 6,162,802) 6,162,802
-----------
TOTAL INVESTMENTS - 99.66%
(cost $86,017,333)<F3> 87,712,519
-----------
OTHER ASSETS AND LIABILITIES - .34% 302,105
-----------
TOTAL NET ASSETS - 100% $88,014,624
-----------
* Non-Income Producing
<FN>
<F1> 144A- Privately placed security traded among qualified institutional
buyers.
<F2> Interest rates vary periodically based on current market rates.
Rates shown are as of June 30, 1997. The maturity shown for each
variable rate demand note is the later of the next scheduled interest
adjustment date or the date on which principal can be recovered through
demand. Information shown is as of June 30, 1997.
<F3> Gross unrealized appreciation and depreciation of securities at June
30, 1997 for financial reporting purposes was $2,747,980 and $1,052,794;
tax amounts were substantially the same.
</FN>
</TABLE>
The accompanying notes are an integral part of
the financial statments.
<PAGE>
CARILLON FUND, INC.
SCHEDULE OF INVESTMENTS
<TABLE>
<CAPTION>
JUNE 30, 1997
(Unaudited)
S&P 500 INDEX PORTFOLIO
COMMON STOCKS - 90.10%
SHARES VALUE
------ -----
<S> <C> <C>
BANKING & FINANCIAL SERVICE - 15.88%
Aegon ADR 348 24,313
Aetna Life & Casulaty Company 867 88,759
Allstate Corporation 2,600 189,800
American Express Company 2,800 208,600
American General Corporation 1,300 62,075
American International Group 2,700 403,313
Banc One Corporation 2,490 120,609
Bank of Boston Corporation 900 64,856
Bank of New York, Incorporated 2,300 100,050
BankAmerica Corporation 4,200 271,163
Bankers Trust New York Corporation 500 43,500
Barnett Banks, Incorporated 1,300 68,250
Chase Manhattan Corporation 2,712 263,234
Chubb Group 1,100 73,563
CIGNA Corporation 500 88,750
Citicorp 2,100 253,181
Comerica, Incorporated 700 47,600
CoreStates Financial Corporation 1,400 75,250
Fannie Mae 6,100 266,113
Federal Home Loan Mortgage Corporation 4,000 137,500
First Bank System, Incorporated 900 76,838
First Chicago NBD Corporation 1,800 108,900
First Union Corporation 1,700 157,250
Fleet Financial Group, Incorporated 1,600 101,200
General RE Corporation 500 91,000
Great Western Financial 800 43,000
Green Tree Financial Corporation 800 28,500
Household International, Incorporated 600 70,463
ITT Hartford Group Incorporated 600 49,650
KeyCorp 1,400 78,225
Lincoln National Corporation 600 38,625
Marsh & McLennan Companies, Incorporated 1,000 71,375
MBNA Corporation 1,775 65,009
Mellon Bank Corporation 1,600 72,200
Merrill Lynch & Company, Incorporated 2,000 119,250
Morgan (J. P.) & Company 1,200 125,250
Morgan Stanley Group Incorporated 3,285 141,460
National City Corporation 1,400 73,500
NationsBank Corporation 3,044 196,338
Norwest Corporation 2,300 129,375
PNC Bank Corporation 2,100 87,413
Providian Corp. 800 25,700
Republic New York Corporation 400 43,000
S & P Despository Receipt 15,000 1,326,976
SAFECO Corporation 800 37,350
Salomon, Incorporated 700 38,938
SunTrust Banks, Incorporated 1,500 82,594
Transamerica Corporation 500 46,781
Travelers Group, Incorporated 3,633 229,106
US Bancorp 900 57,713
Wachovia Corporation 1,000 58,313
Wells Fargo & Company 533 143,644
-----------
6,865,415
-----------
CAPITAL GOOD - 5.05%
AMP, Incorporated 1,500 62,625
Caterpillar, Incorporated 1,100 118,113
Cooper Industries, Incorporated 900 44,775
Deere & Company 1,500 82,313
Dover Company 800 49,200
Emerson Electric Company 2,600 143,163
Foster Wheeler Corporation 300 16,200
General Electric Company 18,400 1,202,900
Grainger (WW), Incorporated 500 39,094
Illinois Tool Works, Incorporated 1,600 79,900
Ingersoll-Rand Company 600 37,050
Tenneco, Incorporated 1,200 54,225
Tyco International 1,100 76,519
Waste Management, Incoroporated 2,900 93,163
Westinghouse Electric Corporation 3,600 83,250
-----------
2,182,490
-----------
CONSUMER CYCLICAL - 6.34%
American Greetings Company Class A 600 22,275
American Stores Company 900 44,438
Black & Decker Corp. 500 18,594
Chrysler Corporation 4,100 134,531
CVS Corporation 700 35,875
Dayton Hudson Corporation 1,400 74,463
Eaton Corporation 500 43,656
Federated Department Stores Incorporated* 1,300 45,175
Ford Motor Company 6,800 256,700
Gap (The), Incorporated 1,600 62,200
General Motors Corporation 4,400 245,025
Genuine Parts Company 1,950 66,056
Goodyear Tire & Rubber Company 1,100 69,644
HFS, Incorporated 800 46,400
Home Depot, Incorporated 2,800 193,025
Johnson Controls 800 32,850
K Mart Corporation* 2,900 35,525
Lowe's Companies, Incorporated 1,000 37,125
May Department Stores Company 1,600 75,600
NIKE, Incorporated 1,700 99,238
PACCAR, Incorporated 400 18,575
Penney, (J.C.) Company, Incorporated 1,400 73,063
Reebok International, Incorporated* 400 18,775
Rite Aid Corporation 900 44,888
Sears, Roebuck & Company 2,300 123,625
Tandy Corporation 500 28,000
Limited (The), Incorporated 1,790 36,248
Toys "R" Us, Incorporated* 1,700 59,500
TRW, Incorporated 900 51,131
V.F. Corporation 500 42,375
Wal-Mart Stores, Incorporated 14,100 476,756
Walgreen Company 1,400 75,075
Whirlpool Corporation 600 32,738
Woolworth Corporation* 1,000 24,000
-----------
2,743,144
-----------
CONSUMER NON-DURABLE - 23.65%
Abbott Laboratories 4,400 293,700
Albertson's, Incorporated 1,600 58,400
American Home Products Corporation 3,800 290,700
Andrew Corporation 600 16,875
Anheuser-Busch Companies, Incorporated 2,800 117,425
Archer-Daniels-Midland Company 3,495 82,133
Automatic Data Processing, Incorporated 1,900 89,300
Avon Products, Incorporated 800 56,450
Baxter International, Incorporated 1,700 88,825
Becton, Dickinson Company 900 45,563
Block, H&R Incorporated 700 22,575
Boston Scientific Corporation* 1,000 61,438
Bristol-Meyers Squibb Company 5,800 469,800
Browning Ferris 1,300 43,225
Brunswick Corporation 700 21,875
Campbell Soup Company 2,600 130,000
Clorox Co. 300 39,600
Coca-Cola Company 13,900 938,250
Cognizant Corporation 1,000 40,500
Colgate-Palmolive Company 1,600 104,400
Columbia/HCA Healthcare Corporation 3,950 155,284
Comcast Corporation 1,200 25,650
ConAgra, Incorporate, Class A. Special 1,500 96,188
CPC International, Incorporated 900 83,081
CUC International, Incorporated* 2,550 65,822
Donnelly (RR) & Sons Company 1,200 43,950
Dow Jones, & Company, Incorporated 700 28,131
Dun & Bradstreet Corporation 1,200 31,500
Fortune Brands, Incorporated 1,100 41,044
Gallagher Group* 1,100 20,281
Gannett Company, Incorporated 1,100 108,625
General Mills, Incorporated 1,000 65,125
Gillette Company 3,100 293,725
Heinz (H.J.) Company 2,300 106,088
Harrahs Entertainment, Incorporated* 700 12,600
Hershey Foods Corporation 1,100 60,844
Hilton Hotels Corporation 1,700 45,156
International Flavors & Fragrance,
Incorporated 700 35,350
Interpublic Group Companies, Incorporated 600 36,788
Johnson & Johnson 7,500 482,813
Kellogg Company 1,200 102,750
King World Producation, Incorporated* 500 17,500
Kroger Company* 1,600 46,400
Lilly,(Eli) & Company 3,100 338,869
Loews Corporation 800 80,100
Manor Care 500 16,313
Mattel, Incorporated 1,850 62,669
Marriott International 900 55,238
McDonalds Corporation 4,100 198,081
McGraw Hill Companies, Incorporated 800 47,050
Medtronic, Incorporated 1,400 113,400
Merck & Company, Incorporated 6,600 683,100
PepsiCo, Incorporated 8,700 326,794
Pfizer, Incorporated 3,600 430,200
Pharmacia & Upjohn, Incorporated 2,900 100,775
Philip Morris Companies, Incorporated 14,100 625,688
Procter & Gamble Company 3,800 536,750
Ralston-Ralston Purina Group 600 49,313
Sara Lee Corporation 2,800 116,550
Schering-Plough Corporation 4,200 201,075
Seagrams Company, Limited 2,200 88,550
St. Jude Medical* 500 19,500
Sysco Corporation 1,300 47,450
Tele-Communications, Incorporated* 2,000 29,750
Tenet Healthcare Corporation* 1,900 56,169
Time Warner, Incorporated 3,500 168,875
Tribune Company 1,000 48,063
UST, Incorporated 1,200 33,300
United HealthCare Corporation 1,100 57,200
Viacom, Inc. - Class B* 1,700 51,000
Walt Disney Company, The 3,919 314,500
Warner-Lambert Company 1,700 211,225
Wendy's International 800 20,750
Winn-Dixie Stores, Incorporated 900 33,525
Wrigley, (Wm), Jr. Company 700 46,900
-----------
10,224,451
-----------
ENERGY - 8.07%
Amerada Hess Corporation 600 33,338
Amoco Corporation 3,000 260,813
Atlantic Richfield Company 1,800 126,900
Burlington Resources, Incorporated 900 39,713
Chevron Corporation 3,700 273,569
Columbia Gas System, Incorporated 400 26,100
Dresser Industries, Incorporated 1,400 52,150
Enron Corporation 1,500 61,219
Exxon Corporation 13,400 824,100
Halliburton Company 900 71,325
Kerr-McGee Company 400 25,350
Mobil Corporation 4,200 293,475
Occidental Petroleum 2,000 50,125
Phillips Petroleum Company 1,600 70,000
Royal Dutch Petroleum Company ADR 12,400 674,250
Schlumberger Limited 1,800 225,000
Sun Company, Incorporated 800 24,800
Texaco, Incorporated 1,500 163,125
USX-Marathon 1,800 51,975
Union Pacific Resources Group 1,592 39,601
Unocal Corporation 1,400 54,338
Williams Companies 1,050 45,938
-----------
3,487,204
-----------
MANUFACTURING - 7.61%
Air Products & Chemicals, Incorporated 700 56,875
Alcan Aluminum Limited 1,900 65,906
Allegheny Teledyne, Incorporated 800 21,600
Aluminum Company of America 1,400 105,525
Applied Materials Incorporated* 1,100 77,894
Barrick Gold 2,200 48,400
Bemis Company 400 17,300
Bethlehem Steel Corporation* 800 8,350
Centex Corporation 100 4,063
Champion International Corporation 800 44,200
Corning, Incorporated 1,400 77,875
Crown Cork & Seal Company, Incorporated 800 42,750
Dow Chemical Company 1,600 139,400
DuPont (E.I.) De Nemours & Company 6,400 402,400
Eastman Chemical Company 600 38,100
Eastman Kodak Company 1,900 145,825
Englehard Corporation 800 16,750
Fluor Corporation 700 38,631
Freeport McMoran Copper 800 24,900
Georgia-Pacific Company 800 68,300
Grace, (WR) & Company 500 27,563
Great Lakes Chemical Corporation 600 31,425
Hercules, Incorporated 700 33,513
Inco, Limited 1,300 39,081
International Paper Company 1,800 87,413
ITT Corporation* 700 42,744
Kimberly-Clark Corporation 3,200 159,200
Louisiana-Pacific Corporation 900 19,013
Mallincrokdt Group, Incorporated 700 26,600
Masco Corporation 1,200 50,100
Minnesota Mining & Manufacturing Company 2,400 244,800
Mead Corporation 400 24,900
Monsanto Company 3,500 150,719
Morton International, Incorporated 1,000 30,188
Nalco Chemical Company 600 23,175
Newmont Mining Corporation 1,500 58,500
Nucor Corporation 700 39,550
Owens Corning 400 17,250
Phelps Dodge Corporation 600 51,113
Placer Dome, Incorporated 1,400 22,925
PPG Industries, Incorporated 1,200 69,750
Praxair Incorporated 1,000 56,000
Reynolds Metals Company 500 35,625
Rohm & Haas 400 36,025
Rubbermaid, Incorporated 1,200 35,700
Sherwin- Williams 1,200 37,050
Silicon Graphics Incorporated* 1,200 18,000
Union Camp Corporation 700 35,000
Union Carbide Corporation 800 37,650
Unilever (N.V.) ADR 900 196,200
USX-US Steel Group 600 21,038
Weyerhaeuser Company 1,400 72,800
Worthington Industries, Incorporated 700 12,819
-----------
3,288,473
-----------
SERVICE - 0.16%
Ikon Office Solution 800 19,950
Service Corporation International 1,500 49,313
-----------
69,263
-----------
TECHNOLOGY - 14.08%
3COM Corporation* 1,100 49,500
Advanced Micro Devices, Incorporated* 900 32,400
AirTouch Communications, Incorporated* 2,900 79,388
AlliedSignal Incorporated 1,800 151,200
Amgen, Incorporated 1,600 93,000
Boeing Company 4,084 216,707
Cabletron Systems, Incorporated* 900 25,481
Cisco Systems, Incorporated* 3,800 255,075
COMPAQ Computers Corporation* 1,500 148,875
Computer Associates International,
Incorporated 2,100 116,944
Computer Sciences Corporation* 500 36,063
Digital Equipment Corporation* 1,000 35,438
Dell Computer Corporation* 1,000 117,438
First Data Corporation 2,700 118,631
Hewlett-Packard Company 5,900 330,400
Honeywell, Incorporated 900 68,288
Intel Corporation 4,700 666,519
International Business Machines Corporation 6,000 541,125
Lockheed Martin Corporation 1,200 124,275
LSI Logic Corporation* 800 25,600
Lucent Technologies 3,685 265,550
McDonnell Douglas Corporation 1,200 82,200
Micron Technology Incorporated* 1,300 51,919
Microsoft Corporation* 6,800 859,350
Motorola Incorporated 3,400 258,400
Nothern Telecom, Limited 1,500 136,500
Novell, Incorporated* 2,000 13,875
Oracle Systems Corporation* 4,000 201,500
Perkin-Elmer Corporation 300 23,869
Pitney-Bowes Incorporated 1,000 69,500
Raytheon Company 1,500 76,500
Rockwell International Corporation 1,300 76,700
Scientific Atlanta, Incorporated 700 15,313
Seagate Technology, Incorporated* 1,500 52,781
Sun Microsystems, Incorporated* 2,200 81,881
Tandem Computer Incorporated* 800 16,200
Tektronix, Incorporated 200 12,000
Tellabs, Incorporated* 1,100 61,463
Texas Instruments, Incorporated 1,100 92,469
Textron Incorporated 1,200 79,650
Unisys Corporation* 1,200 9,150
United Technologies Corporation 1,600 132,800
Western Atlas, Incorporated* 400 29,300
Xerox Corporation 2,000 157,750
-----------
6,088,967
-----------
TRANSPORTATION - 1.37%
AMR Corporation* 600 55,500
Burlington Northern Santa Fe Corporation 1,100 98,863
Caliber System, Incorporated 400 14,900
CSX Corporation 1,600 88,800
Delta Air Lines 500 41,000
Federal Express* 700 40,425
Laidlaw Incorporated 1,900 26,244
Norfolk Southern Company 800 80,600
Ryder System 700 23,100
Southwest Airlines Company 1,000 25,875
Union Pacific Corporation 1,400 98,700
-----------
594,007
-----------
UTILITY - 7.89%
ALLTELL Corporation 1,300 43,469
American Electric Power Company, Incorporated 1,600 67,200
AT&T Corporation 9,100 319,069
Ameritech Corporation 3,100 210,606
Baltimore Gas & Electric Company 1,100 29,356
Bell Atlantic Corporation 2,600 197,275
BellSouth Corporation 5,400 250,425
Carolina Power & Light Company 1,200 43,050
Central & Southwest Corporation 1,900 40,375
CinergyCorporation 1,000 34,813
Coastal Corporation 600 31,913
Consolidated Edison Co. of N.Y. Incorporated 1,400 41,213
Consolidated Natural Gas Company 600 32,288
Dominion Resources 1,400 51,275
Duke Power 2,339 112,126
DTE Energy Company 1,100 30,388
Edison International 2,500 62,188
Entergy Corporation 1,300 35,588
FPL Group Incorporated 1,500 69,094
General Public Utilities Corporation 900 32,288
GTE Corporation 4,900 214,988
Houston Industries, Incorporated 1,400 30,013
MCI Communications Corporation 3,200 122,500
Niagara Mohawk Power Corporation* 800 6,850
NYNEX Corporation 2,600 149,825
Pacific Gas & Electric Company 2,600 63,050
PacifiCorp 2,200 48,400
PECO Energy Company 1,200 25,200
Public Service Enterprise Group, Incorporated 1,300 32,500
SBC Communications 5,055 312,778
Southern Company 3,500 76,563
Sprint Corporation* 2,000 105,250
<PAGE>
Sonat, Incorporated 600 30,750
Texas Utilities Company 1,700 58,544
Unicom Corporation 1,400 31,150
Union Electric Company 900 33,919
U.S. West Communications Group 2,700 101,756
US West Media Group* 3,700 74,925
WorldCom, Incorporated 4,900 156,800
-----------
3,409,760
-----------
Total Common Stocks (cost $30,430,987) 38,953,174
-----------
<CAPTION>
SHORT-TERM INVESTMENTS - 10.66%
PRINCIPAL VALUE
<S> <C> <C>
US Treasury Bill (5.220% due 11/13/97) $4,250,000 4,166,366
Portico US Federal Money Market Fund 443,734 443,734
-----------
Total Short-Term Investments (cost $4,610,100) 4,610,100
-----------
TOTAL INVESTMENTS - 100.76%
(cost $35,041,087)<F1> 43,563,274
-----------
OTHER ASSETS AND LIABILITIES - (0.76%) (327,181)
-----------
TOTAL NET ASSETS - 100% $43,236,093
-----------
*Non-income producing
(ADR) American Depository Receipt
<FN>
<F1> Gross unrealized appreciation and depreciation of securities and futures
at June 30, 1997 for financial reporting was $9,235,029 and $427,467
respectively.
</FN>
</TABLE>
(2) Securities with an aggregate market value of
$4,165,875 have been segregated with the custodian to
cover margin requirements for the following open futures
contracts at June 30, 1997:
<TABLE>
<CAPTION>
Unrealized Appreciation /
Type Contracts (Depreciation)
-------------------------------------------------------------------
<S> <C> <C>
Standard & Poor's 500 Index (09/97) 5 316,250
Standard & Poor's 500 Index (09/97) 5 (30,875)
--------
$285,375
========
</TABLE>
The accompanying notes are an integral part of
the financial statements.
<PAGE>
CARILLON FUND, INC.
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 1997
(Unaudited)
NOTE 1 - SIGNIFICANT ACCOUNTING POLICIES
Carillon Fund, Inc. (the Fund) is registered under the
Investment Company Act of 1940, as amended, as a no-load,
diversified, open-end management investment company. The shares
of the Fund are sold only to The Union Central Life Insurance
Company (Union Central) and its separate accounts to fund the
benefits under certain variable insurance and retirement
products. The Fund's shares are offered in four different
series - Equity Portfolio, Capital Portfolio, Bond Portfolio,
and S&P 500 Index Portfolio. The Equity Portfolio seeks long-
term appreciation of capital by investing primarily in common
stocks and other equity securities. The Capital Portfolio seeks
the highest total return through a combination of income and
capital appreciation consistent with the reasonable risks
associated with an investment portfolio of above-average quality
by investing in equity securities, debt instruments, and money
market instruments. The Bond Portfolio seeks a high level of
current income as is consistent with reasonable investment risk
by investing primarily in long-term, fixed-income, investment-
grade corporate bonds. The S&P 500 Index Portfolio seeks
investment results that correspond to the total return
performance of U.S. common stocks, as represented in the
Standard & Poor's 500 Index.
The preparation of financial statements in conformity with
generally accepted accounting principles requires management to
make estimates and assumptions that affect the reported amounts
of assets and liabilities and disclosure of contingent assets
and liabilities at the date of the financial statements and the
reported amounts of revenues and expenses during the reporting
period. Actual results could differ from those estimates.
Securities valuation - Securities held in each Portfolio, except
for money market instruments maturing in 60 days or less, are
valued as follows: Securities traded on stock exchanges
(including securities traded in both the over-the-counter market
and on an exchange), or listed on the NASDAQ National Market
System, are valued at the last sales price as of the close of
the New York Stock Exchange on the day the securities are being
valued, or, lacking any sales, at the closing bid prices.
Securities traded only in the over-the-counter market are valued
at the last bid price, as of the close of trading on the New
York Stock Exchange, quoted by brokers that make markets in the
securities. Other securities for which market quotations are
not readily available are valued at fair value as determined in
good faith under procedures adopted by the Board of Directors.
Money market instruments with a remaining maturity of 60 days or
less held in each Portfolio are valued at amortized cost which
approximates market.
Securities transactions and investment income - Securities
transactions are recorded on the trade date (the date the order
to buy or sell is executed). Dividend income is recorded on the
ex-dividend date and interest income is recorded on the accrual
basis. All amortization of discount is recognized currently
under the effective interest method. Gains and losses on sales
of investments are calculated on the identified cost basis for
financial reporting and tax purposes.
Federal taxes - It is the intent of the Fund to comply with the
requirements of the Internal Revenue Code applicable to regulated
investment companies and to distribute all of its net investment
income and any net realized capital gains. Regulated investment
companies owned by the segregated asset accounts of a life
insurance company, held in connection with variable annuity
contracts, are exempt from excise tax on undistributed income.
Therefore, no provision for income or excise taxes has been
recorded.
Distributions -Distributions from net investment income in all
Portfolios are declared and paid quarterly. Net realized
capital gains are distributed periodically, no less frequently
than annually. Distributions are recorded on the ex-dividend
date. All distributions are reinvested in additional shares of
the respective Portfolio at the net asset value per share.
The amount of distributions are determined in accordance with
federal income tax regulations which may differ from generally
accepted accounting principles. These "book/tax" differences
are either considered temporary or permanent in nature. To the
extent these differences are permanent in nature, such amounts
are reclassified within the capital accounts based on their
federal tax-basis treatment; temporary differences do not
require reclassification. Distributions which exceed net
investment income and net realized capital gains for financial
reporting purposes but not for tax purposes are reported as
distributions in excess of net investment income or
distributions in excess of net realized capital gains. To the
extent they exceed net investment income and net realized
capital gains for tax purposes, they are reported as
distributions of paid-in-capital.
Expenses - Allocable expenses of the Fund are charged to each
Portfolio based on the ratio of the net assets of each Portfolio
to the combined net assets of the Fund. Nonallocable expenses
are charged to each Portfolio based on specific identification.
NOTE 2 - TRANSACTIONS WITH AFFILIATES
Investment advisory fees - The Fund pays investment advisory
fees to Carillon Advisers, Inc. (the Adviser), under terms of an
Investment Advisory Agreement (the Agreement). Certain officers
and directors of the Adviser are affiliated with the Fund. The
Fund pays the Adviser, as full compensation for all services and
facilities furnished, a monthly fee computed separately for each
Portfolio on a daily basis, at an annual rate, as follows:
(a) for the Equity Portfolio - .65% of the first $50,000,000,
.60% of the next $100,000,000, and .50% of
all over $150,000,000 of the current net asset value:
(b) for Capital Portfolio - .75% of the first $50,000,000,
.65% of the next $100,000,000, and .50% of all
over $150,000,000 of the current net asset value.
(c) for the Bond Portfolio - .50% of the first $50,000,000,
.45% of the next $100,000,000, and .40% of
all over $150,000,000 of the current net asset value.
(d) for the S & P 500 Index Portfolio - .30% of the current
net asset value.
The Agreement provides that if the total operating expenses of
the Fund, exclusive of the advisory fee and certain other
expenses as described in the Agreement, for any fiscal quarter
exceed an annual rate of 1% of the average daily net assets of
the Equity, Capital , or Bond Portfolios, the Adviser will
reimburse the Fund for such excess, up to the amount of the
advisory fee for that year. The Adviser has agreed to waive its
advisory fee and pay any other expenses of the S&P 500 Index
Portfolio to the extent that such expenses exceed 0.60% of its
average annual net assets. As a result, for the six months
ended June 30, 1997, the Adviser waived management fees of
$3,002 for the S&P 500 Index Portfolio.
In addition to providing investment advisory services, the
Adviser is responsible for providing certain administrative
functions to the Fund. The Adviser has entered into an
Administration Agreement with Carillon Investments, Inc. (the
Distributor) under which the Distributor furnishes substantially
all of such services for an annual fee of .20% of the Fund's
average net assets for the Equity, Capital, and Bond Portfolios,
and .05% of the Fund's average net assets for the S & P 500
Index Portfolio. The fee is borne by the Adviser, not the Fund.
Carillon Advisers, Inc. and Carillon Investments, Inc. are
wholly-owned subsidiaries of Union Central.
Directors' fees - Each director who is not affiliated with the
Adviser receives fees from the Fund for service as a director.
Members of the Board of Directors who are not affiliated with
the Adviser are eligible to participate in a deferred
compensation plan. The value of each director's deferred
compensation account will increase or decrease at the same rate
as if it were invested in shares of the Scudder Money Market
Fund.
NOTE 3 - FUTURES CONTRACTS
S&P 500 Index Portfolio ("Index") may purchase futures contracts
on the Standard & Poor's 500 Stock Index. These contracts
provide for the sale of a specified quantity of a financial
instrument at a fixed price at a future date. When Index enters
into a futures contract, it is required to deposit and maintain
as collateral such initial margin as required by the exchange on
which the contract is traded. Under terms on the contract,
Index agrees to receive from or pay to the broker an amount
equal to the daily fluctuation in the value of the contract
(known as the variation margin). The variation margin is
recorded as unrealized gain or loss until the contract expires
or is otherwise closed, at which time the gain or loss is
realized. Index invests in futures as a substitute to investing
in the 500 common stock positions in the Standard & Poor's 500
Index. The potential risk to Index is that the change in the
value in the underlying securities may not correlate to the
value of the contracts.
NOTE 4 - SUMMARY OF PURCHASES AND SALES OF INVESTMENTS
Purchases and sales of securities for the six months ended
June 30, 1997 excluding short-term obligations, follow:
<TABLE>
<CAPTION>
Equity Capital Bond S&P 500
Portfolio Portfolio Portfolio Index
--------- --------- --------- -------
<S> <C> <C> <C> <C>
Total Cost
of Purchases of:
Common Stocks $84,309,294 $15,404,296 $ -- $15,091,219
U.S. Government Securities -- 8,851,656 4,579,070 --
Corporate Bonds -- 598,356 55,470,303 --
----------- ----------- ----------- -----------
$84,309,294 $24,854,308 $60,049,373 $15,091,219
----------- ----------- ----------- -----------
Total Proceeds
from Sales of:
Common Stocks $89,850,236 $19,078,087 $ 515,000 $ 5,966,758
U.S. Government Securities -- 2,982,800 6,518,143 --
Corporate Bonds -- 4,050,824 56,265,467 --
----------- ----------- ----------- -----------
$89,850,236 $26,111,711 $63,298,610 $ 5,966,758
=========== =========== =========== ===========
</TABLE>
<PAGE>
Note 5 - FINANCIAL HIGHLIGHTS
Computed on the basis of a share of capital stock outstanding
throughout the period.
<TABLE>
<CAPTION>
Equity Portfolio
Six Months Ended
June 30, Year Ended December 31,
---------- ----------------------------------------
(Unaudited)
1997 1996 1995 1994 1993 1992
---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value,
Beginning of Year $19.45 $16.54 $14.30 $14.58 $13.74 $12.60
------ ------ ------ ------ ------ ------
Investment
Activities:
Net investment
income .18 .29 .24 .20 .16 .19
Net realized and
unrealized
gains/(losses) 1.21 3.61 3.36 .31 1.69 1.27
------ ------ ------ ------ ------ ------
Total from
Investment
Operations 1.39 3.90 3.60 .51 1.85 1.46
------ ------ ------ ------ ------ ------
Distributions:
Net investment
income (.16) (.27) (.23) (.19) (.16) (.19)
Net realized gains (2.30) (.72) (1.13) (.60) (.85) (.13)
------ ------ ------ ------ ------ ------
Total Distributions (2.46) (.99) (1.36) (.79) (1.01) (.32)
------ ------ ------ ------ ------ ------
Net Asset Value,
End of year $18.38 $19.45 $16.54 $14.30 $14.58 $13.74
====== ====== ====== ====== ====== ======
Total Return 8.30% 24.52% 26.96% 3.42% 14.11% 11.78%
Ratios/
Supplemental Data:
Ratio of Expenses
to Average
Net Assets .63%<F1> .64% .66% .69% .70% .72%
Ratio of Net
Investment
Income to Average
Net Assets 1.37%<F1> 1.66% 1.73% 1.45% 1.18% 1.47%
Portfolio Turnover
Rate 63.25%<F1> 52.53% 34.33% 40.33% 37.93% 46.75%
Average Commission
Rate Paid(2) $ .0595 $ .0628
Net Assets,
End of Year (000's) $309,830 $288,124 $219,563 $157,696 $138,239 $102,306
_________________
<FN>
<F1> The ratios are annualized.
<F2> Represents the dollar amount of commissions paid on Portfolio
transactions divided by the total number of shares purchased and sold for
which commissions were charged. Disclosure not required for periods prior to
fiscal 1996.
</FN>
</TABLE>
<PAGE>
Note 5 - FINANCIAL HIGHLIGHTS
Computed on the basis of a share of capital stock outstanding
throughout the period.
<TABLE>
<CAPTION>
Capital Portfolio
Six Months Ended
June 30, Year Ended December 31,
----------- ----------------------------------------
(Unaudited)
1997 1996 1995 1994 1993 1992
---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value,
Beginning of Year $ 14.95 $ 13.72 $ 13.19 $ 13.81 $ 12.99 $ 12.82
------- ------- ------- ------- ------- -------
Investment
Activities:
Net investment
income .35 .63 .64 .52 .43 .42
Net realized and
unrealized
gains/(losses) (.04) 1.36 1.15 (.39) 1.17 .56
------- ------- ------- ------- ------- -------
Total from
Investment
Operations .31 1.99 1.79 .13 1.60 .98
------- ------- ------- ------- ------- -------
Distributions:
Net investment
income (.36) (.57) (.64) (.52) (.42) (.42)
Net realized gains (1.18) (.19) (.62) (.23) (.36) (.39)
------- ------- ------- ------- ------- -------
Total Distributions (1.54) (.76) (1.26) (.75) (.78) (.81)
------- ------- ------- ------- ------- -------
Net Asset Value,
End of year $13.72 $14.95 $13.72 $13.19 $13.81 $12.99
======= ======= ======= ======= ======= =======
Total Return 2.31% 14.94% 14.28% .94% 12.72% 7.93%
Ratios/Supplemental
Data:
Ratio of Expenses
to Average
Net Assets .77%<F1> .77% .77% .80% .82% .88%
Ratio of
Net Investment
Income to Average
Net Assets 4.24%<F1> 4.42% 4.99% 4.25% 3.31% 3.49%
Portfolio Turnover
Rate 40.92%<F1> 53.11% 43.83% 41.89% 32.42% 39.74%
Average Commission
Rate Paid<F2> $ .0603 $.0615
Net Assets,
End of Year (000's) $159,816 $159,294 $145,623 $119,263 $100,016 $68,674
_________________
<FN>
<F1> The ratios are annualized.
<F2> Represents the dollar amount of commissions paid on Portfolio
transactions divided by the total number of shares purchased and sold for
which commissions were charged. Disclosure not required for periods prior to
fiscal 1996.
</FN>
</TABLE>
<PAGE>
Note 5 - FINANCIAL HIGHLIGHTS
Computed on the basis of a share of capital stock outstanding
throughout the period.
<TABLE>
<CAPTION>
Bond Portfolio
Six Months Ended
June 30 Year Ended December 31,
--------------- ------------------------------------
(Unaudited)
1997 1996 1995 1994 1993 1992
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value,
Beginning of Year $ 10.91 $ 11.07 $ 10.04 $ 11.30 $ 10.91 $ 10.96
------- ------- ------- ------- ------- -------
Investment Activities:
Net investment income .34 .79 .88 .77 .73 .82
Net realized and
unrealized
gains/(losses) (.08) (.04) .98 (.95) .54 (.01)
------- ------- ------- ------- ------- -------
Total from
Investment Operations .42 .75 1.86 (.18) 1.27 .81
------- ------- ------- ------- ------- -------
Distributions:
Net investment income (.32) (.87) (.83) (.78) (.73) (.82)
In excess of
net investment income -- (.04) -- -- -- --
Net realized gains (.06) -- -- (.30) (.15) (.04)
------- ------- ------- ------- ------- -------
Total Distributions (.38) (.91) (.83) (1.08) (.88) (.86)
------- ------- ------- ------- ------- -------
Net Asset Value,
End of period $ 10.95 $ 10.91 $ 11.07 $ 10.04 $ 11.30 $ 10.91
======= ======= ======= ======= ======= =======
Total Return 3.55% 7.19% 19.03% (1.63%) 11.94% 7.65%
Ratios/Supplemental
Data:
Ratio of Expenses to
Average Net Assets .61%<F1> .62% .65% .68% .66% .69%
Ratio of Net Investment
Income to Average
Net Assets 7.31%<F1> 7.24% 7.43% 7.21% 6.65% 7.59%
Portfolio Turnover Rate 152.68%<F1> 202.44% 111.01% 70.27% 137.46% 40.91%
Net Assets,
End of Year (000's) 88,015 $85,634 $73,568 $55,929 $54,128 $38,557
________________
<FN>
<F1> The ratios are annualized.
</FN>
</TABLE>
<PAGE>
Note 5 - FINANCIAL HIGHLIGHTS
Computed on the basis of a share of capital stock outstanding
throughout the period.
<TABLE>
<CAPTION>
S & P 500 Index Portfolio
Six Months Ended Year Ended
June 30, 1997 December 31, 1996
------------- -----------------
(Unaudited)
<S> <C> <C>
Net Asset Value,
Beginning of Year $ 12.13 $ 10.00
Investment Activities:
Net investment income .14 .20
Net realized and unrealized
gains/(losses) 2.31 2.12
------- -------
Total from Investment Operations 2.45 2.32
------- -------
Distributions:
Net investment income (.11) (.19)
Net realized gains (.10) --
------- -------
Total Distributions (.21) (.19)
------- -------
Net Asset Value,
End of Period $ 14.37 $ 12.13
======= =======
Total Return 20.39% 23.37%
Ratios/Supplemental Data:
Ratio of Net Expenses to
Average Net Assets 1.23%<F1> .59%<F2>
Ratio of Net Investment
Income to Average Net Assets 3.53%<F1> 2.14%<F2>
Portfolio Turnover Rate 36.77% 1.09%
Average Commission Rate Paid<F3> .0595 $ .0601
Net Assets, End of Year (000's) $43,236 $29,205
- -------------
<FN>
<F1> The ratios are annualized.
<F2> The ratios of net expenses to average net assets would have increased
and net investment income to average net assets would have decreased by .25%
for the six months ended December 31, 1996, had the Adviser not waived a
portion of its fee.
<F3> Represents the dollar amount of commissions paid on Portfolio
transactions divided by the total number of shares purchased and sold for
which commissions were charged. Disclosure not required for periods prior to
fiscal 1996.
</FN>
</TABLE>
<PAGE>
CARILLON FUND, INC.
Financial Statements
December 31, 1996
<PAGE>
CARILLON FUND, INC.
REPORT OF INDEPENDENT AUDITORS
To the Board of Trustees and Shareholders of Carillon Fund, Inc.
We have audited the accompanying statements of assets and
liabilities of Carillon Fund, Inc. (consisting of the Equity
Portfolio, Capital Portfolio, Bond Portfolio and the S&P 500
Index Portfolio), including the schedules of investments, as of
December 31, 1996, and the related statements of operations for
the year then ended, and the statements of changes in net assets
and financial highlights for the periods ended December 31, 1996
and December 31, 1995, respectively. These financial statements
and financial highlights ("financial statements") are the
responsibility of the Fund's management. Our responsibility is
to express an opinion on these financial statements based on our
audits. The financial highlights presented for periods prior to
December 31, 1995 were audited by other auditors.
We conducted our audits in accordance with generally accepted
auditing standards. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether
the financial statements are free of material misstatement. An
audit includes examining, on a test basis, evidence supporting
the amounts and disclosure in the financial statements. Our
procedures included confirmation of securities owned as of
December 31, 1996, by correspondence with the custodian and
brokers. An audit also includes assessing the accounting
principles used and significant estimates made by management, as
well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, such financial statements present fairly, in all
material respects, the financial position of each of the
Portfolios of Carillon Fund, Inc. as of December 31, 1996, the
results of their operations for the year then ended, and the
changes in their net assets and the financial highlights for the
periods ended December 31, 1996 and December 31, 1995,
respectively, in conformity with generally accepted accounting
principles.
/s/ Deloitte & Touche LLP
Deloitte & Touche LLP
Dayton, Ohio
February 3, 1997
<PAGE>
CARILLON FUND, INC.
STATEMENTS OF ASSETS AND LIABILITIES
December 31, 1996
<TABLE>
<CAPTION>
S&P 500
Equity Capital Bond Index
Portfolio Portfolio Portfolio Portfolio
------------ ------------ ----------- -----------
<S> <C> <C> <C> <C>
ASSETS
Investments in
securities, at value $282,646,476 $156,298,562 $88,078,300 $29,275,723
(cost $222,263,315;
$144,685,532;
$86,040,107;
$26,294,249)
Cash 3,375 -- -- --
Receivables:
Shares sold 1,033,820 348,253 106,559 179,916
Securities sold 5,144,647 1,864,018 -- 17,389
Interest and Dividends 575,981 879,817 1,368,459 43,553
Prepaid expenses
and other 12,911 8,460 5,022 1,195
------------ ------------ ----------- -----------
289,417,210 159,399,110 89,558,340 29,517,776
------------ ------------ ----------- -----------
LIABILITIES
Payables:
Investment securities
purchased 1,145,250 -- 3,567,982 --
Shares purchased -- 45 66 180,224
Investment advisory fees 134,253 90,306 34,737 8,233
Custodial and portfolio
accounting fees 6,794 7,868 5,954 6,022
Professional fees 6,149 5,462 5,618 5,299
Bank overdraft -- -- 218,525 23
Variation margin -- -- -- 102,200
Other accrued expenses 1,041 1,543 4,275 11,165
Deferred compensation
for directors -- -- 87,054 --
------------ ------------ ----------- -----------
1,293,487 105,224 3,924,211 313,166
------------ ------------ ----------- -----------
NET ASSETS
Paid-in capital 192,682,992 134,247,020 83,411,472 25,912,734
Undistributed net
investment income 734,698 982,540 -- 42,252
Distributions in excess
of net investment
income -- -- (296,645) --
Accumulated net realized
gain/(loss) 34,322,872 12,451,296 481,109 218,750
on investments
Net unrealized 60,383,161 11,613,030 2,038,193 3,030,874
appreciation on ------------ ------------ ----------- -----------
investments and
futures contracts
$288,123,723 $159,293,886 $85,634,129 $29,204,610
============ ============ =========== ===========
Shares authorized
($.10) par value 20,000,000 15,000,000 10,000,000 10,000,000
Shares outstanding 14,813,685 10,655,370 7,847,440 2,407,503
Net asset value,
offering, and
redemption price $19.45 $14.95 $10.91 $12.13
per share
</TABLE>
The accompanying notes are an integral part of
the financial statement.
<PAGE>
<TABLE>
<CAPTION>
CARILLON FUND, INC.
STATEMENTS OF OPERATIONS
Year Ended December 31, 1996
S&P 500
Equity Capital Bond Index
Portfolio Portfolio Portfolio Portfolio
--------- --------- --------- ---------
<S> <C> >c? <C> <C>
INVESTMENT INCOME
Interest $ 1,041,257 $ 6,227,142 $ 6,257,449 $ 135,283
Dividends (net of
foreign withholding
taxes of $117,559;
$41,233; $0; $2,598) 4,734,994 1,629,448 -- 311,295
----------- ----------- ----------- ----------
5,776,251 7,856,590 6,257,449 446,578
----------- ----------- ----------- ----------
EXPENSES
Investment advisory fees 1,436,998 1,032,861 384,084 48,985
Custodial fees and
expenses 61,313 46,599 22,157 14,140
Portfolio accounting fees 48,645 46,102 39,174 29,713
Professional fees 9,181 8,980 9,448 15,895
Director's fees 11,351 11,351 11,354 10,754
Transfer agent fees 6,010 6,054 6,089 5,853
Registration and
filing fees 8,919 8,590 7,616 2,493
Other 17,403 11,713 10,894 9,982
----------- ----------- ----------- ----------
1,599,820 1,172,250 490,816 137,815
Fees waived by the Adviser -- -- -- (40,752)
----------- ----------- ----------- ----------
1,599,820 1,172,250 490,816 97,063
----------- ----------- ----------- ----------
NET INVESTMENT INCOME 4,176,431 6,684,340 5,766,633 349,515
----------- ----------- ----------- ----------
REALIZED AND UNREALIZED
GAIN/(LOSS) ON
INVESTMENTS AND
FUTURES CONTRACTS
Net realized gain
on investments 34,227,538 12,459,745 1,210,173 32,147
Net realized gain on
futures contracts -- -- -- 186,603
----------- ----------- ----------- ----------
34,227,538 12,459,745 1,210,173 218,750
----------- ----------- ----------- ----------
Net change in unrealized
appreciation/
(depreciation) on
investments 17,468,047 1,990,613 (1,316,722) 2,981,474
Net change in unrealized
appreciation/
(depreciation) on
futures contracts -- -- -- 49,375
----------- ----------- ----------- ----------
17,468,047 1,990,613 (1,316,722) 3,030,849
----------- ----------- ----------- ----------
NET REALIZED AND
UNREALIZED GAIN/
(L0SS) ON INVESTMENTS
AND FUTURES CONTRACTS 51,695,585 14,450,358 (106,549) 3,249,599
----------- ----------- ----------- ----------
NET INCREASE IN NET
ASSETS FROM OPERATIONS $55,872,016 $21,134,698 $5,660,084 $3,599,114
=========== =========== =========== ==========
</TABLE>
The accompanying notes are an integral part of the financial
statements.
<PAGE>
CARILLON FUND, INC.
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
Equity Portfolio
For the Year Ended December 31,
-------------------------------
1996 1995
---- ----
<S> <C> <C>
OPERATIONS
Net investment income $ 4,176,431 $ 3,230,075
Net realized gain/(loss)
on investments and futures 34,227,538 9,962,775
Net change in unrealized
appreciation /(depreciation) on
investments and futures contracts 17,468,047 31,418,181
----------- -----------
55,872,016 44,611,031
----------- -----------
DISTRIBUTIONS TO SHAREHOLDERS
Net investment income (3,889,965) (3,023,061)
In excess of net investment income -- --
Net realized gain on investments (9,867,342) (12,644,665)
----------- -----------
(13,757,307) (15,667,726)
----------- -----------
FUND SHARE TRANSACTIONS
Proceeds from shares sold 41,762,282 29,948,214
Net asset value of shares
issued to shareholders
in reinvestment of distributions 13,757,307 15,667,726
Payments for shares redeemed (29,173,822) (12,692,274)
----------- -----------
26,445,767 32,923,666
----------- -----------
NET INCREASE IN NET ASSETS 68,560,476 61,866,971
NET ASSETS
Beginning of year 219,563,247 157,696,276
----------- -----------
End of year 288,123,723 219,563,247
=========== ===========
FUND SHARE TRANSACTIONS:
Sold 2,393,015 1,968,821
Issued in reinvestment
of distributions 809,878 1,111,633
Redeemed (1,660,244) (837,546)
----------- -----------
Net increase from fund
share transactions 1,542,649 2,242,908
----------- -----------
</TABLE>
The accompanying notes are an integral part of the financial
statements.
<PAGE>
CARILLON FUND, INC.
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
Capital Portfolio
For the Year Ended December 31,
-------------------------------
1996 1995
---- ----
<S> <C> <C>
OPERATIONS
Net investment income $ 6,684,340 $ 6,696,820
Net realized gain on
investments and futures 12,459,745 1,973,190
Net change in unrealized
appreciation/(depreciation) on
investments and futures contracts 1,990,613 8,952,302
----------- -----------
21,134,698 17,622,312
----------- -----------
DISTRIBUTIONS TO SHAREHOLDERS
Net investment income (6,050,397) (6,389,872)
In excess of net investment income -- --
Net realized gain on investments (2,002,549) (5,716,244)
----------- -----------
(8,052,946) (12,106,116)
----------- -----------
FUND SHARE TRANSACTIONS
Proceeds from shares sold 17,130,822 21,179,705
Net asset value of shares
issued to shareholders in
reinvestment of distributions 8,052,945 12,106,115
Payments for shares redeemed (24,594,141) (12,442,444)
----------- -----------
589,626 20,843,376
----------- -----------
NET INCREASE IN NET ASSETS 13,671,378 26,359,572
NET ASSETS
Beginning of year 145,622,508 119,262,936
----------- -----------
End of year 159,293,886 145,622,508
=========== ===========
FUND SHARE TRANSACTIONS:
Sold 1,199,385 1,579,714
Issued in reinvestment of
distributions 570,034 922,915
Redeemed (1,729,493) (928,220)
----------- -----------
Net increase from fund
share transactions 39,926 1,574,409
</TABLE>
The accompanying notes are an integral part of the financial
statements.
<PAGE>
CARILLON FUND, INC.
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
Bond Portfolio
For the Year Ended December 31,
-------------------------------
1996 1995
---- ----
<S> <C> <C>
OPERATIONS
Net investment income $ 5,766,633 $5,184,573
Net realized gain/(loss)
on investments and futures 1,210,173 (162,632)
Net change in unrealized
appreciation/(depreciation) on
investments and futures contracts (1,316,722) 6,104,034
----------- ----------
5,660,084 11,125,975
----------- ----------
DISTRIBUTIONS TO SHAREHOLDERS
Net investment income (6,340,623) (5,049,814)
In excess of net investment income (320,260) --
Net realized gain on investments -- --
----------- ----------
(6,660,883) (5,049,814)
----------- ----------
FUND SHARE TRANSACTIONS
Proceeds from shares sold 17,850,341 12,251,770
Net asset value of shares issued
to shareholders in reinvestment
of distributions 6,660,883 5,049,814
Payments for shares redeemed (11,443,995) (5,739,318)
----------- ----------
13,067,229 11,562,266
----------- ----------
NET INCREASE IN NET ASSETS 12,066,430 17,638,427
NET ASSETS
Beginning of year 73,567,699 55,927,272
----------- ----------
End of year 85,634,129 73,567,699
=========== ==========
FUND SHARE TRANSACTIONS:
Sold 1,633,803 1,141,491
Issued in reinvestment
of distributions 621,662 469,937
Redeemed (1,054,560) (538,145)
----------- ----------
Net increase from fund
share transactions 1,200,905 1,073,283
=========== ==========
</TABLE>
The accompanying notes are an integral part of the financial
statements.
<PAGE>
CARILLON FUND, INC.
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
S&P 500 Index Portfolio
For the
Period from
For the Year December 29,
Ended 1995 to
December 31, December 31,
------------ ------------
1996 1995
---- ----
<S> <C> <C>
OPERATIONS
Net investment income $ 349,515 $ 123
Net realized gain/(loss) on
investments and futures 218,750 --
Net change in unrealized
appreciation/(depreciation) on
investments and futures contracts 3,030,849 25
----------- --------
3,599,114 148
----------- --------
DISTRIBUTIONS TO SHAREHOLDERS
Net investment income (307,386) --
In excess of net investment income -- --
Net realized gain on investments -- --
----------- --------
(307,386) --
----------- --------
FUND SHARE TRANSACTIONS
Proceeds from shares sold 30,917,430 305,000
Net asset value of shares
issued to shareholders 307,386 --
in reinvestment of dividends
and distributions
Payments for shares redeemed (5,617,082) --
----------- --------
25,607,734 305,000
----------- --------
NET INCREASE IN NET ASSETS 28,899,462 305,148
NET ASSETS
Beginning of year 305,148 --
----------- --------
End of year 29,204,610 305,148
=========== ========
FUND SHARE TRANSACTIONS:
Sold 2,850,416 30,500
Issued in reinvestment of
distributions 26,989 --
Redeemed (500,402) --
----------- --------
Net increase from fund
share transactions 2,377,003 30,500
=========== ========
</TABLE>
The accompanying notes are an integral part of the financial
statements.
<PAGE>
CARILLON FUND, INC.
SCHEDULE OF INVESTMENTS
<TABLE>
<CAPTION>
DECEMBER 31, 1996
EQUITY PORTFOLIO
SHARES/
PRINCIPAL VALUE
--------- -----
<S> <C> <C>
COMMON STOCKS - 92.28%
BANKING & FINANCIAL SERVICE - 17.48%
ABN Amro Holdings NV Sponsored ADR 32,868 2,135,788
Allied Capital Corporation 28,571 449,993
Banco Bhif ADR* 75,000 1,228,125
Banco Frances Rio Pla Sponsored ADR 28,750 790,625
Banco Latinoamericano
De Exportanciones Sponsored ADR 75,000 3,806,250
Capital American Financial
Corporation 30,000 1,091,250
Charter One Financial, Incorporated 52,500 2,205,000
Chile Fund Incorporated 80,000 1,670,000
Community First Bankshares 91,545 2,517,488
Corus Bankshares, Incorporated 70,000 2,257,500
Czech Republic Fund 109,000 1,444,250
Deutsche Bank AG Sponsored ADR 42,000 1,959,497
FPIC Insurance Group, Incorporated* 150,000 2,025,000
Gainsco, Incorporated 217,762 2,095,959
Jefferies Group, Incorporated 64,000 2,584,000
Mid Ocean Limited Order Shares 40,000 2,100,000
Penncorp Financial Group Corporation 95,000 3,420,000
RLI Corporation 68,625 2,290,359
Raymond James Financial Corporation 66,100 1,991,263
Standard Federal Bancorporation 57,900 3,293,063
Thai Fund, Incorporated 102,500 1,691,250
Union Planters Corporation* 50,000 1,950,000
Washington Federal, Incorporated 85,100 2,255,150
Zions Bancorporation 30,000 3,120,000
------------
50,371,810
------------
CAPITAL GOOD - 11.87%
AGCO Corporation 59,400 1,700,325
Astec Industries, Incorporated* 75,000 712,500
Breed Technologies, Incorporated 90,000 2,340,000
Cemex SA Sponsored ADR 125,000 971,786
Crossman Communitites, Incorporated* 80,000 1,360,000
D.R. Horton, Incorporated 100,000 1,087,500
Deere & Company 68,000 2,762,500
Ford Motor Company 55,000 1,753,125
Griffon Corporation* 209,600 2,567,600
Kysor Industries Corporation* 75,000 2,446,875
Lindsay Manufacturing Company 117,862 5,510,048
Medusa Corporation 80,300 2,760,313
Schult Homes Corporation 50,000 1,175,000
Scotsman Industries, Incorporated 40,000 945,000
Strattec Security Corporation* 145,000 2,646,250
Toll Brothers, Incorporated* 90,000 1,755,000
Woodhead Industries, Incorporated 50,500 694,375
Visx, Incorporated* 45,000 995,625
------------
34,183,822
------------
CONSUMER CYCLICAL - 4.61%
Chromcraft Revington, Incorporated* 75,000 2,081,250
CPAC, Incorporated 125,000 1,875,000
Donnkenny, Incorporated* 100,000 462,500
Galey & Lord, Incorporated* 9,700 144,288
NCI Building Systems, Incorporated* 80,700 2,784,150
Pillowtex Corporation 56,900 1,024,200
Roberds, Incorporated* 90,000 742,500
Southern Energy Home 150,000 1,725,000
Tractor Supply Company* 30,000 618,750
Winsleow Furniture, Incorporated* 188,300 1,835,925
------------
13,293,563
------------
CONSUMER NON-DURABLE -10.87%
Advocat, Incorporated* 100,500 728,625
Allied Healthcare Products,
Incorporated 65,100 480,113
Charoen Pok Feedmill ADR 100,000 1,450,850
Conso Products Company 146,250 1,882,969
Crown Books Corporation* 29,900 351,325
Dart Group Corporation - Class A 7,500 697,500
Dairy Farm International
Holdings Sponsored ADR 200,000 804,998
Footstar, Incorporated* 68,200 1,696,475
GT Bicycles, Incorporated* 134,900 1,736,838
Helen of Troy Ltd, Bermuda* 177,000 3,894,000
IHOP Corporation* 87,000 2,055,375
King World Productions, Incorporated* 50,000 1,843,750
Morningstar Group, Incorporated* 121,000 2,374,625
Nam Tai Electronics, Incorporated* 187,500 1,453,125
Oakley, Incorporated 73,200 796,050
Orthofix International NV* 113,036 932,547
Schlotzsky's, Incorporated* 137,900 1,379,000
Shopko Stores, Incorporated 110,700 1,660,500
Titan Wheel International,
Incorporated 95,000 1,211,250
Toy Biz, Incorporated* 120,000 2,340,000
Utah Medical Products, Incorporated* 115,200 1,540,800
------------
31,310,715
------------
ENERGY - 11.52%
Apache Corporation 58,118 2,055,924
Callon Petroleum Company* 110,000 2,090,000
Cross Timbers Oil Company 70,000 1,758,750
Geoscience Corporation* 50,000 650,000
Giant Industries, Incorporated 165,000 2,310,000
Global Industries, Incorporated 100,000 1,862,500
Holly Corporation 90,000 2,407,500
Nuevo Energy Company* 45,000 2,340,000
Offshore Energy Development* 80,000 1,220,000
Plains Resources, Incorporated* 120,000 1,875,000
St. Mary Land & Exploration 60,000 1,492,500
Southern Mineral Corporation* 350,000 2,056,250
Stone Energy Corporation* 93,900 2,805,263
Total S.A. Sponsored ADR 42,958 1,729,060
Trizec Hahn Corporation 75,000 1,650,000
Vastar Resources Incorporated* 50,000 1,900,000
YPF S.A. Sponsored ADR 55,000 1,388,750
Zeigler Coal Holdings Company 75,000 1,603,125
------------
33,194,622
------------
MANUFACTURING -14.21%
ABT Building Products Company* 145,000 3,625,000
AEP Industries, Incorporated* 107,550 5,915,250
Alltrista Corporation* 86,000 2,214,500
BWAY Corporation* 110,000 2,103,750
Bayer A G Sponsored ADR 110,000 4,482,478
Carbide Graphite Group Incorporated* 130,000 2,551,250
Echo Bay Mines Limited 90,000 596,250
Holophane Corporation 75,000 1,425,000
Falcon Products, Incorporated 147,730 2,105,153
Kevco Incorporated* 140,000 1,960,000
Matthews International Corporation
- Class A 77,000 2,175,250
Minorco Sponsored ADR 90,000 1,873,125
Pohang Iron & Steel Corporation 75,000 1,518,750
Shanghai Petro Chemical Company
Limited Sponsored ADR 40,000 1,175,000
Shelter Components Corporation 100,250 1,228,063
Sybron Chemicals, Incorporated* 65,200 1,043,200
Triangle Pacific Corporation* 92,500 2,225,781
York Group, Incorporated 140,000 2,730,000
------------
40,947,800
------------
REAL ESTATE - 11.78%
Associated Estates Realty Corporation 65,000 1,543,750
Commercial Net Lease Realty* 99,300 1,576,388
Evans Withycombe Residential 92,000 1,932,000
Health Care Property Investments,
Incorporated 47,400 1,659,000
Healthcare Realty Trust, Incorporated 111,400 2,952,100
Highwoods Properties, Incorporated* 40,000 1,350,000
Hospitality Properties Turst,
Incorporated 64,000 1,856,000
IRT Property Company 172,300 1,981,450
LTC Properties, Incorporated 95,000 1,757,500
Merry Land & Investment Company 115,000 2,472,500
Mid-America Apartment Communities 80,000 2,310,000
National Health Investors,
Incorporated 40,000 1,515,000
Public Storage, Incorporated 80,000 2,480,000
Shurgard Storage Centers,
Incorporated 70,000 2,073,750
Trinet Corporate Realty Trust
Incorporated 58,000 2,059,000
United Dominion Realty Trust
Incorporated 132,000 2,046,000
Winston Hotels, Incorporated 175,000 2,384,375
------------
33,948,813
------------
SERVICE - 1.78%
Comcast Corporation 50,000 893,750
Devon Group, Incorporated* 85,000 2,337,500
PCA International, Incorporated 55,200 897,000
Right Management Consultants 44,600 992,350
------------
5,120,600
------------
TECHNOLOGY - 3.46%
Cybex Corporation* 160,000 2,280,000
DH Technology, Incorporated* 135,000 3,240,000
Digi International, Incorporated* 95,000 902,500
Kemet Corporation* 60,000 1,395,000
Recoton Corporation* 143,000 2,136,062
9,953,562
TRANSPORTATION - 2.77%
Atlantic Southeast Airlines
Incorporated 95,000 2,078,125
Illinois Central Corporation
- Class A 82,500 2,640,000
Landstar, Incorporated* 40,000 930,000
Midwest Express Holdings* 65,000 2,340,000
------------
7,988,125
------------
UTILITY - 1.93%
CMS Energy Corporation 50,000 1,681,250
Empresa Nacional
De Electricidad Sponsored ADR 29,400 2,058,000
Tuscon Electric Power Company 110,000 1,828,750
------------
5,568,000
------------
Total Common Stocks
(cost $ 205,498,271) $265,881,432
------------
SHORT-TERM INVESTMENTS - 5.82%
COMMERCIAL PAPER - 5.37%
Army Airforce (5.600% due 01/01/97) 2,000,000 2,000,000
CC USA (5.400% due 02/06/97) 1,000,000 994,600
ConAgra, Incorporated
(5.450% due 01/03/97) 1,000,000 999,697
Circus Circus (5.500% due 01/08/97) 2,000,000 1,997,861
Dana Credit Corporation
(5.480% due 01/16/97) 1,500,000 1,496,575
Telecommunications, Incorporated
(5.700% due 01/24/97) 1,000,000 996,358
Textron Financial Corporation
(5.570% due 02/11/97) 2,000,000 1,987,313
Public Service Electric & Gas
(5.450% due 01/07/97) 1,000,000 999,092
Viacom (5.660% due 01/21/97) 2,000,000 1,993,711
White Consolidated Industries,
Incorporated(5.480% due 01/24/97) 2,000,000 1,992,998
------------
15,458,205
------------
VARIABLE RATE DEMAND NOTES<F1> - .45%
Johnson Controls, Incorporated
(5.529% due 01/01/97) 1,306,839 1,306,839
------------
Total Short-Term Investments
(cost $16,765,044) 16,765,044
------------
TOTAL INVESTMENTS - 98.10%
(cost $222,263,315)<F2> 282,646,476
------------
OTHER ASSETS AND LIABILITIES - 1.9% 5,477,247
------------
TOTAL NET ASSETS - 100% $288,123,723
============
- -----------------
* Non-income producing
(ADR) American Depository Receipt
<FN>
<F1>) Interest rates vary periodically based on current market
rates. The maturity shown for each variable rate demand note is
the later of the next scheduled interest rate adjustment date or
the date on which principal can be recovered through demand.
Information as of December 31, 1996.
<F2> Represents cost for Federal income tax purposes. Gross
unrealized appreciation and depreciation of securities at
December 31, 1996 was $69,683,138 and $9,299,977, respectively.
</FN>
</TABLE>
The accompanying notes are an integral part of the financial
statements
<PAGE>
CARILLON FUND, INC.
SCHEDULE OF INVESTMENTS
<TABLE>
<CAPTION>
DECEMBER 31, 1996
CAPITAL PORTFOLIO
SHARES/
PRINCIPAL VALUE
--------- -----
<S> <C> <C>
COMMON STOCKS - 34.38%
BANKING & FINANCIAL SERVICE - 8.42%
Allied Capital Corporation 34,285 539,992
Banco BHIF ADR* 50,000 818,750
Banco Latinoamericano
de Exportaciones ADR 30,000 1,522,500
Black Rock Strategic Term Trust 75,000 600,000
Charter One Financial Incorporated 42,000 1,764,000
Corus Bankshares Incorporated 25,000 806,250
Deutsche Bank AG Sponsored ADR 18,000 839,784
FPIC Insurance Group Incorporated* 60,000 810,000
Gainsco Incorporated 63,000 606,375
New Germany Fund 72,229 966,063
RLI Corporation 30,480 1,017,270
Templeton Global Income Fund 125,000 890,625
Thai Fund Incorporated 55,000 907,500
Washington Federal Incorporated 50,000 1,325,000
------------
13,414,109
------------
CAPITAL GOOD - 2.57%
Astec Industries Incorporated* 50,000 475,000
Griffon Corporation* 55,000 673,750
Lindsay Manufacturing Incorporated 32,908 1,538,449
Lonrho PLC - Sponsored ADR 150,000 319,574
Strattec Security Corporation* 60,000 1,095,000
------------
4,101,773
------------
CONSUMER CYCLICAL - 2.15%
Chromcraft Revington Inc.* 25,000 693,750
NCI Building Systems Incorporated* 35,000 1,207,500
Southern Energy Homes 65,000 747,500
Winsleow Furniture Incorporated* 80,000 780,000
------------
3,428,750
------------
CONSUMER NON-DURABLE - 1.87%
GT Bicycles Incorporated* 80,000 1,030,000
Helen of Troy Limited, Bermuda* 51,000 1,122,000
IHOP Corporation* 35,000 826,875
------------
2,978,875
------------
ENERGY - 2.50%
Callon Petroleum Company* 35,000 665,000
Giant Industries Incorporated 87,400 1,223,600
Offshore Energy Development* 43,000 655,750
Stone Energy Corporation* 27,000 806,625
YPF S.A. Sponsored ADR 25,000 631,250
------------
3,982,225
------------
MANUFACTURING -8.29%
ABT Building Products Company* 45,000 1,125,000
AEP Industries, Incorporated* 45,831 2,520,705
Bayer AG Sponsored ADR 75,000 1,629,992
Bway Corporation* 44,000 841,500
Carbide Graphite Group* 60,000 1,177,500
Holly Corporation 20,000 535,000
Newmont Mining Corporation 20,000 895,000
Pohang Iron & Steel Company 32,000 648,000
Royal Oak Mines Incorporated* 125,000 406,250
Santa Fe Pacific Gold Corporation 35,000 538,125
TVX Gold Incorporated* 120,000 930,000
Vaal Reefs Exploration
& Mining Limited ADR* 120,100 43,119
York Group Incorporated 62,000 1,209,000
------------
13,199,191
------------
REAL ESTATE - 7.03%
Associated Estates Realty
Corporation 50,000 1,187,500
Columbus Realty Trust 46,000 1,046,500
Hospitality Properties Trust 33,000 957,000
IRT Properties Company 85,000 977,500
LTC Properties Incorporated 46,000 851,000
Merry Land & Investment Company 60,000 1,290,000
Mid-America Apartment Communities 40,000 1,155,000
Shurgard Storage Centers Incorporated 43,000 1,273,875
United Dominion Realty Trust 75,000 1,162,500
Winston Hotels Incorporated 95,000 1,294,375
------------
11,195,250
------------
TECHNOLOGY - 1.55%
DH Technology, Incorporated* 59,760 1,434,240
Recoton Corporation* 69,000 1,030,688
------------
2,464,928
------------
Total Common Stocks (cost $43,838,220) 54,765,101
------------
PREFERRED STOCKS - .40%
MANUFACTURING -.40%
Freeport McMoRan Copper & Gold Series 20,000 640,000
------------
Total Preferred Stock (cost $709,838) 640,000
------------
U.S. TREASURY OBLIGATIONS - 13.18%
8.000% due 01/15/97 1,000,000 1,000,313
8.500% due 04/15/97 500,000 503,906
6.750% due 02/28/97 650,000 651,016
6.750% due 05/31/97 1,000,000 1,004,063
7.875% due 04/15/98 500,000 511,719
5.500% due 02/28/99 1,000,000 991,250
6.000% due 10/15/99 5,900,000 5,900,000
5.750% due 10/31/00 1,000,000 986,875
7.500% due 11/15/01 500,000 526,406
6.375% due 08/15/02 1,750,000 1,761,485
5.875% due 02/15/04 100,000 97,375
7.250% due 05/15/04 3,500,000 3,683,750
7.875% due 11/15/04 3,100,000 3,382,875
------------
Total U.S. Treasury Notes
($20,735,403) 21,001,033
------------
COLLATERALIZED MORTGAGE
OBLIGATIONS - 12.51%
FEDERAL HOME LOAN MORTGAGE
CORPORATION - 3.16%
1662 H (6.250% due 01/15/09) 1,007,738 989,065
1442 FA (5.970% due 11/15/07) 1,000,000 907,605
77 F (8.500% due 06/15/17) 23,592 23,592
1559 VP (5.500% due 02/15/20) 1,700,000 1,625,744
1399 PAC (7.000% due 09/15/22) 596,484 568,131
1631 SB (6.527% due 12/15/23) 1,450,000 911,855
------------
5,025,992
------------
FEDERAL NATIONAL MORTGAGE
ASSOCIATION - 7.82%
Remic 93-12 ED
(7.500% due 02/25/06) 1,645,000 1,692,039
Remic 1992-163 PN
(7.000% due 07/25/07) 1,500,000 1,501,020
Remic 92-117 J
(7.500% due 07/25/20) 1,000,000 1,013,637
Remic 92-119 E
(8.000% due 07/25/20) 1,000,000 1,021,846
Remic 92-112E
(8.000% due 12/25/20) 1,500,000 1,534,255
Remic 93-127 FA
(5.430% due 10/25/21) 1,000,000 951,862
Remic 1992-39 FB
(6.190% due 03/25/22) 2,000,000 1,936,180
Remic 92-66 F
(5.906% due 05/25/22) 1,007,444 1,008,482
Remic 1993-119 SB
(7.595% due 07/25/23) 2,572,882 1,803,790
------------
12,463,111
------------
PRIVATE SECTOR - 1.53%
Prudential Home Mortgage Securities
(7.500% due 07/25/10) 521,233 515,531
Merrill Lynch Mortgage Investors
(6.438% due 09/15/17) 2,000,000 1,920,000
------------
2,435,531
------------
Total Collateralized Mortgage
Obligations (cost $20,294,887) 19,924,634
------------
MORTGAGE - BACKED SECURITIES - 9.25%
FEDERAL HOME LOAN MORTGAGE
CORPORATION - .82%
7.500% due 06/01/07 50,933 51,379
9.500% due 10/01/08 230,479 247,019
8.250% due 03/01/12 119,734 123,764
8.500% due 03/01/16 95,105 98,830
7.500% due 07/01/17 57,995 58,149
11.000% due 04/01/19 55,195 61,646
11.000% due 11/01/19 53,485 59,736
11.000% due 05/01/20 213,091 237,904
11.000% due 06/01/20 332,322 371,297
------------
1,309,724
------------
FEDERAL NATIONAL MORTGAGE
ASSOCIATION - 8.08%
10.000% due 02/01/04 6,768 7,235
9.500% due 09/01/05 150,099 158,380
9.000% due 11/01/05 68,885 72,112
7.500% due 03/25/07 1,200,000 1,220,681
8.000% due 05/01/07 145,405 149,688
6.000% due 12/01/08 868,950 842,360
5.500% due 01/01/09 900,305 857,694
6.000% due 03/01/09 984,158 954,043
5.500% due 04/01/09 888,742 843,620
8.500% due 03/01/19 12,085 12,654
6.500% due 02/01/26 806,877 770,124
6.500% due 03/01/26 201,918 192,720
7.000% due 03/01/26 1,944,740 1,903,336
7.000% due 07/01/26 1,961,895 1,919,593
7.500% due 07/01/26 2,959,197 2,959,375
------------
12,863,615
------------
GOVERNMENT NATIONAL MORTGAGE
ASSOCIATION - .35%
9.000% due 11/15/16 103,445 111,000
10.500% due 11/20/19 291,488 318,313
9.000% due 12/15/19 126,525 134,961
------------
564,274
------------
Total Mortgage Backed Securities
(cost $14,273,212) 14,737,613
------------
CORPORATE BONDS AND NOTES - 5.56%
COMMUNICATIONS AND MEDIA - .57%
Loewen Group International, Inc.
(8.2500% due 04/15/03) 900,000 908,104
------------
FINANCE COMPANY - .32%
Helicon Group
(11.0000% due 11/01/03) 500,000 510,000
------------
FINANCIAL SERVICES - .52%
Pacific Gulf Properties, Inc.
(8.375% due 02/15/01) 750,000 825,000
------------
GAMING INDUSTRY - .16%
Circus Circus Enterprises, Inc.
(10.625% due 06/15/97) 250,000 255,124
------------
INSURANCE - .09%
The Penn Central Corp.
(9.750% due 08/01/99) 130,000 136,857
------------
MISCELLANEOUS - .65%
Toll Corp. (10.500% due 03/15/02) 500,000 517,500
Parisian (9.875% due 07/15/03) 500,000 510,000
------------
1,027,500
------------
OIL & GAS EXPLORATION SERVICES - .97%
Maxus Debentures
(11.250% due 05/01/13) 208,000 213,200
Rowan Companies
(11.875% due 12/10/01) 750,000 795,000
Trans Texas Gas, Corp.
(11.500% due 06/15/02) 500,000 540,625
------------
1,548,825
------------
REAL ESTATE - .33%
GE Capital Marketing Services, Inc.
(6.0000% due 08/25/09) 568,877 531,547
------------
TELEPHONE & TELECOMMUNICATIONS- .75%
United Telecommunications, Inc.
(9.750% due 04/01/00) 156,000 169,674
TCI Communications Inc
(8.6500% due 09/15/04) 1,000,000 1,023,856
------------
1,193,530
UTILITIES - ELECTRIC - 1.20%
Connecticut Light & Power Co.
1st Ref Mtg. (7.625% due 04/01/97) 677,000 677,240
New Orleans Public Service Inc.
1st Mtg. (8.670% due 04/01/05) 1,200,000 1,237,629
------------
1,914,869
------------
Total Corporate Bonds
(cost $ 8,455,147) 8,851,356
------------
SHORT-TERM INVESTMENTS - 22.84%
COMMERCIAL PAPER - 17.71%
Army Airforce (5.600% due 01/10/97) 2,000,000 2,000,000
Case Credit Corporation
(5.530% due 02/03/97) 1,000,000 994,931
Circus Circus Enterprises Inc.
(5.500% due 01/08/97) 2,000,000 1,997,861
Conagra Inc. (5.450% due 01/03/97) 2,000,000 1,999,394
Dana Credit Corporation
(5.480% due 01/21/97) 1,000,000 996,956
Hanson Financial
(5.620% due 03/14/97) 1,500,000 1,483,140
IES Diversified
(5.550% due 01/27/97) 1,000,000 995,992
IES Diversified
(5.670% due 01/31/97) 1,500,000 1,492,913
Illinois Power Fuel Company
(5.450% due 01/14/97) 2,000,000 1,996,064
Nabisco Inc (5.450% due 01/13/97) 1,000,000 998,183
New York State Gas & Electric
(5.950% due 01/24/97) 2,000,000 1,992,397
Penn Power & Light Energy
(5.450% due 01/08/97) 1,000,000 998,940
Penn Power & Light Energy
(5.480% due 01/22/97) 1,000,000 996,803
Public Service Electric & Gas
(5.450% due 01/07/97) 1,000,000 999,092
Public Service Electric & Gas
(5.450% due 01/10/97) 1,000,000 998,638
Telecommunications Inc
(5.700% due 01/24/97) 2,300,000 2,291,624
Textron Financial Group
(5.550% due 02/10/97) 1,000,000 993,833
Textron Inc.
(5.5700% due 02/11/97) 1,000,000 993,656
Viacom (5.700% due 01/24/97) 1,000,000 996,358
White Consolidated Industries, Inc
(5.480% due 01/24/97) 1,000,000 996,499
White Consolidated Industries, Inc
(5.530% due 02/03/97) 1,000,000 994,931
------------
28,208,205
------------
VARIABLE RATE DEMAND NOTES - 5.13%
American Family Financial Services
(5.509% due 01/01/97) 1,485,013 1,485,013
Johnson Controls, Inc.
(5.529% due 01/01/97) 6,157,736 6,157,736
Wisconsin Electric Power Company
(5.549% due 01/01/97) 527,871 527,871
------------
8,170,620
------------
Total Short Term Investments
(cost $36,378,825) 36,378,825
------------
TOTAL INVESTMENTS - 98.12%
(cost $144,685,532)<F2> 156,298,562
------------
OTHER ASSETS AND LIABILITIES - 1.88% 2,995,324
------------
TOTAL NET ASSETS - 100% $159,293,886
------------
- -----------------
* Non-Income producing
(ADR) American Depository Receipt
<FN>
<F1> Interest rates vary periodically based on current market
rates. Rates shown are as of December 31, 1996. The maturity
shown for each variable rate demand note is the later of the
next scheduled interest rate adjustment date or the date on
which principal can be recovered through demand. Information as
of December 31, 1996.
<F2> Represents cost for Federal income tax purposes. Gross
unrealized appreciation and depreciation of securities at
December 31, 1996 was $14,144,348 and $2,531,318 respectively.
</FN>
</TABLE>
The accompanying notes are an integral part of the financial
statements.
<PAGE>
CARILLON FUND, INC.
SCHEDULE OF INVESTMENTS
December 31, 1996
BOND PORTFOLIO
<TABLE>
<CAPTION>
SHARES/
PRINCIPAL VALUE
--------- -----
<S> <C> <C>
U.S. TREASURY OBLIGATIONS - 35.51%
U.S. TREASURY BOND - 5.41%
6.250% due 08/15/23 $3,000,000 $ 2,811,570
6.000% due 02/15/26 2,000,000 1,819,376
-----------
4,630,946
-----------
U.S. TREASURY NOTES - 25.30%
6.000% due 10/15/99 4,000,000 4,000,000
6.700% due 04/30/00 2,000,000 2,038,126
7.750% due 02/15/01 2,500,000 2,642,188
5.625% due 02/28/01 2,000,000 1,960,626
5.875% due 11/15/05 5,000,000 4,823,440
6.500% due 08/15/05 1,000,000 1,006,875
7.000% due 07/15/06 5,000,000 5,195,315
-----------
21,666,570
-----------
U.S. TREASURY STRIPS - 4.80%
0.000% due 02/15/00 3,250,000 2,695,290
0.000% due 08/15/02 2,000,000 1,416,780
-----------
4,112,070
-----------
Total U.S. Treasury Notes
(cost $30,002,142) 30,409,583
-----------
MORTGAGE - BACKED SECURITIES - 3.43%
FEDERAL HOME LOAN MORTGAGE
CORPORATION - 1.10%
7.500% due 02/01/02 46,747 47,331
9.500% due 04/01/05 77,932 82,169
7.500% due 06/01/07 112,097 113,080
11.000% due 05/01/10 13,069 14,596
12.500% due 08/01/10 18,983 21,794
8.000% due 11/01/16 55,327 56,382
9.500% due 02/01/18 76,207 81,827
6.500% due 07/01/23 553,517 532,356
-----------
949,535
-----------
FEDERAL NATIONAL MORTGAGE
ASSOCIATION - 2.14%
12.000% due 04/01/00 69,694 75,095
9.000% due 08/01/01 50,968 53,341
8.500% due 01/01/02 47,751 49,676
10.500% due 06/01/04 16,138 17,207
10.500% due 05/01/05 200,712 214,009
6.500% due 06/01/08 1,141,030 1,128,683
8.000% due 08/01/17 289,120 294,360
-----------
1,832,371
-----------
GOVERNMENT NATIONAL MORTGAGE
ASSOCIATION - .19%
11.000% due 03/15/10 61,600 68,029
9.000% due 05/15/20 86,210 90,844
-----------
158,873
-----------
Total Mortgage-Backed Securities
(cost $2,892,682) 2,940,779
-----------
COLLATERALIZED MORTGAGE
OBLIGATIONS - 7.97%
FEDERAL HOME LOAN MORTGAGE
CORPORATION - 3.56%
59 E (8.900% due 11/15/20) 965,123 1,007,820
106 G (8.250% due 12/15/20) 1,000,000 1,031,890
1770 B (8.250% due 01/15/24) 1,000,000 1,004,836
-----------
3,044,546
-----------
FEDERAL NATIONAL MORTGAGE
ASSOCIATION - .26%
Remic (9.500% due 12/25/18) 212,032 225,191
-----------
PRIVATE SECTOR - 4.15%
Securitized Asset Sales, Inc.
(6.500% due 07/25/08) 305,789 291,457
CMC Securities Corp.
(0.000% due 12/25/08) 401,817 301,298
Country Wide Mortgage-Backed
Securities, Inc.(6.000% due 03/01/09) 876,358 807,073
Capstead Mortgage Securities Corp.
(10.950% due 02/01/14) 215,719 215,934
Greenwich Capital Acceptance
(8.238% due 08/25/24) 989,978 858,806
NWA Trust No. 2 Class B
(10.230% due 06/21/14) 950,769 1,083,310
-----------
3,557,878
-----------
Total Collateralized Mortgage
Obligations (cost $6,559,333) 6,827,615
-----------
CORPORATE BONDS AND NOTES - 50.43%
AIR TRANSPORTATION - 1.22%
Continental Airlines
(7.820% due 10/15/23) 1,000,000 1,033,140
-----------
BANK & BANK HOLDING COMPANIES - 4.17%
Comerica Inc. (9.750% due 05/01/99) 500,000 534,041
First Tennessee (8.070% due 01/06/27) 2,000,000 2,002,240
Nationsbank Corp.
(7.625% due 04/15/05) 1,000,000 1,034,698
-----------
3,570,979
-----------
COMMUNICATIONS AND MEDIA - 8.59%
Arch Communication Group
(0.000% due 03/15/08) 1,000,000 571,250
Call-Net Enterprises
(0.000% due 12/01/04) 1,250,000 1,025,000
CF Cable TV Inc.
(9.125% due 07/15/07) 1,000,000 1,070,000
Continental Cablevision
(8.300% due 05/15/06) 1,000,000 1,067,038
CS Wireless Systems
(0.000% due 03/01/06) 500,000 180,000
Jones Intercable, Inc.
(9.625% due 03/15/02) 500,000 525,000
Neodata Service (12.000% due 05/01/03) 1,000,000 1,052,500
Peoples Choice TV (0.000% due06/01/04) 2,000,000 840,000
Time Warner Inc. (8.110% due 08/15/06) 1,000,000 1,024,735
-----------
7,355,523
-----------
CONGLOMERATES - 1.78%
Figgie International Inc.
(9.875% due 10/01/99) 1,000,000 1,040,000
JB Poindexter & Company
(12.500% due 05/15/04) 500,000 487,500
-----------
1,527,500
-----------
CONSUMER PRODUCTS -2.59%
Coleman Holdings
(0.000% due 05/27/98) 1,000,000 833,750
Pillowtex Corporation
(10.000% due 11/15/06) 500,000 520,000
Revlon Consumer Products Corp.
(0.00% due 03/15/98) 1,000,000 867,500
-----------
2,221,250
-----------
ENERGY - 1.34%
Coastal Corp.(9.7500% due 08/01/03) 1,000,000 1,144,986
-----------
FINANCE COMPANIES - 1.79%
Ahmanson Capital Trust
(8.360% due 12/01/26) 1,500,000 1,536,615
-----------
FOOD, BEVERAGE, & TOBACCO -3.45%
Dimon Inc. (8.875% due 06/01/06) 1,000,000 1,037,500
RJR Nabisco, Inc.
(7.625% due 09/15/03) 500,000 482,059
Great American Cookie, Inc.
(10.875% due 01/15/01) 500,000 455,000
Nabisco Inc. (7.550% due 06/15/15) 1,000,000 978,312
-----------
2,952,871
-----------
FOREIGN - 1.12%
Quebec Province CDA
(7.125% due 02/09/24) 1,000,000 955,040
-----------
GAMING INDUSTRY - 5.84%
Argosy Gaming (13.2500% due 06/01/04) 1,000,000 927,500
Boomtown, Inc. 1st Mortgage
(11.500% due 11/01/03) 1,000,000 1,047,500
Casino Magic of Louisiana
(13.000% due 08/15/03) 1,000,000 987,500
Empress River Casino Finance Corp.
(10.750% due 04/01/02) 1,000,000 1,077,500
Hollywood Casino Corp.
(12.750% due 11/01/03) 1,000,000 960,000
-----------
5,000,000
-----------
HEALTH CARE - 1.80%
Columbia / HCA Healthcare Corp.
(7.690% due 06/15/25) 1,000,000 1,026,254
Foundation Health Corp.
(7.750% due 06/01/03) 500,000 516,881
-----------
1,543,135
-----------
INSURANCE - 4.92%
Berkley (W.R.) Corp.
(9.875% due 05/15/08) 500,000 595,056
Farmers Insurance Exhange
(8.500% due 04) 1,000,000 1,046,903
Leucadia National Corp.
(8.250% due 06/15/05) 1,000,000 1,036,976
Penn Central Corp.
(9.750% due 08/01/99) 500,000 526,374
Prudential Insurance
(8.100% due 07/15/15) 1,000,000 1,010,504
-----------
4,215,813
-----------
MANUFACTURING - 4.31%
General Instrument Corporation
(5.000% 06/15/00) 500,000 532,500
International Knife & Saw Corp.
(11.375% due 11/15/06) 1,000,000 1,035,000
International Wire Group Inc.
(11.750% due 06/01/05) 500,000 535,000
Safelite Glass Corporation
(9.875% due 12/15/06) 500,00 515,000
Terex Corp. (13.750% due 05/15/02) 1,000,000 1,075,000
-----------
3,692,500
-----------
MISCELLANEOUS - .60%
Sea Containers (10.500% due 07/01/03) 500,000 512,500
-----------
OIL & GAS - DOMESTIC - .63%
Penzoil Company (9.625% due 11/15/99) 500,000 535,737
-----------
OIL & GAS - SERVICES - 3.17%
Mitchell Energy Development Corp.
(6.750% due 02/15/04) 750,000 707,585
PDV America, Inc.
(7.750% due 08/01/00) 1,000,000 1,005,453
Petro (12.500% due 06/01/02) 1,000,000 1,000,000
-----------
2,713,038
-----------
PAPER & FOREST PRODUCTS - .62%
Westvaco Corp. (10.300% due 01/15/19) 500,000 532,396
-----------
RETAIL - GENERAL - 1.23%
Hook - SuperX Inc.
(10.125% due 06/01/02) 1,000,000 1,057,132
-----------
STEELS AND METALS - 1.26%
Gulf States Steel
(13.500% due 04/15/03) 500,000 472,500
UCAR Global Enterprises Inc.
(12.000% due 01/15/05) 530,000 610,163
-----------
1,082,663
-----------
Total Corporate Bond and Notes
(cost $42,252,009) 43,182,818
-----------
COMMON STOCKS - .04%
ENERGY - .04%
Mesa Incorproated* 6,417 33,689
-----------
Total Common Stocks (cost $ 24,365) 33,689
-----------
WARRANTS - 0.00%
RETAIL-FOOD - 0.00%
Great American Cookie Warrants 90 2,250
TECHNOLOGY - .06%
CS Wireless Systems 138 1
Terex Corporation Appreciation Rights 4,000 40
-----------
Total Warrants (cost $ 28,050) 2,291
-----------
PREFERRED STOCKS - 1.05%
BANKING AND FINANCIAL SERVICE - 1.05%
Earthshell Container Corporation
Series A
Cumulative Senior Convertible 8%<F1> 500 900,000
-----------
Total Preferred Stocks (cost $500,000) 900,000
-----------
SHORT TERM INVESTMENTS - 4.42%
VARIABLE RATE DEMAND NOTES<F2> - 4.42%
American Family (5.509% due 01/01/97) 661,231 661,231
Johnson Controls Inc.
(5.529% due 01/01/97) 2,145,196 2,145,196
Pitney Bowes Credit Corp.
(5.507% due 01/01/97) 42,913 42,913
Sara Lee (5.487% due 01/01/97) 797,184 797,184
Southwestern Bell Telephone Co.
(5.487% due 01/01/97) 135,000 135,000
-----------
Total Short-Term Investments
(cost $3,781,525) 3,781,525
-----------
TOTAL INVESTMENTS - 102.85%
(cost $86,040,107)<F3> 88,078,300
-----------
OTHER ASSETS AND LIABILITIES - (2.85)% (2,444,171)
-----------
TOTAL NET ASSETS - 100% $85,634,129
===========
- -----------------------
* Non-Income Producing
<FN>
<F1> 144A- Privately placed security traded among qualified
institutional buyers.
<F2> Interest rates vary periodically based on current market rates.
Rates shown are as of December 31, 1996. The maturity shown for each
variable rate demand note is the later of the next scheduled interest
adjustment date or the date on which principal can be recovered through
demand. Information shown is as of December 31, 1996.
<F3> Represents cost for Federal income tax purposes. Gross unrealized
appreciation and depreciation of securities at December 31, 1996 was
$3,185,795 and $1,147,602 respectively.
</FN>
</TABLE>
The accompanying notes are an integral part of
the financial statments.
<PAGE>
CARILLON FUND, INC.
SCHEDULE OF INVESTMENTS
<TABLE>
<CAPTION>
DECEMBER 31, 1996
S&P 500 INDEX PORTFOLIO
COMMON STOCKS - 82.48%
SHARES VALUE
------ -----
<S> <C> <C>
BANKING & FINANCIAL SERVICE - 11.85%
Aetna Life & Casulaty Company 667 53,318
Allstate Corporation 2,000 115,750
American Express Company 2,100 118,650
American General Corporation 900 36,788
American International Group 2,000 216,500
Banc One Corporation 1,890 81,270
Bank of Boston Corporation 700 44,975
Bank of New York Incorporated 1,700 57,375
BankAmerica Corporation 1,600 159,600
Bankers Trust New York Corporation 300 25,875
Barnett Banks, Incorporated 1,000 41,125
Boatmen's Bancshares, Incorporated 800 51,600
Chase Manhattan Corporation 2,012 179,571
Chubb Group 800 43,000
CIGNA Corporation 300 40,988
Citicorp 1,600 164,800
Comerica, Incorporated 600 31,425
CoreStates Financial Corporation 1,100 57,063
Dean Witter, Discover & Company 700 46,375
Federal Home Loan Mortgage Corporation 800 88,100
Federal National Mortgage Association 4,800 178,800
First Bank System, Incorporated 700 47,775
First Chicago NBD Corporation 1,400 75,250
First Union Corporation 1,300 96,200
Fleet Financial Group, Incorporated 1,200 59,850
General RE Corporation 400 63,100
Great Western Financial 500 14,500
Green Tree Financial Corporation 600 23,175
Household International, Incorporated 500 46,125
ITT Hartford Group Incorporated 500 33,750
KeyCorp 1,000 50,500
Lincoln National Corporation 500 26,250
Marsh & McLennan Companies, Incorporated 400 41,600
MBNA Corporation 850 35,275
Mellon Bank Corporation 600 42,600
Merrill Lynch & Company, Incorporated 800 65,200
Morgan (J. P.) & Company 900 87,863
Morgan Stanley Group Incorporated 700 39,988
National City Corporation 1,100 49,363
NationsBank Corporation 1,000 97,750
Norwest Corporation 1,600 69,600
PNC Bank Corporation 1,500 56,438
Providian Corp. 500 25,688
Republic New York Corporation 300 24,488
SAFECO Corporation 600 23,663
Salomon, Incorporated 500 23,563
SunTrust Banks, Incorporated 1,200 59,100
Transamerica Corporation 400 31,600
Travelers Group, Incorporated 2,733 124,010
US Bancorp 700 31,456
Wachovia Corporation 800 45,200
Wells Fargo & Company 433 116,802
-----------
3,460,670
-----------
CAPITAL GOOD - 4.56%
AMP, Incorporated 1,100 42,213
Caterpillar, Incorporated 900 67,725
Cooper Industries, Incorporated 600 25,275
Deere & Company 1,200 48,750
Dover Company 600 30,150
Emerson Electric Company 1,100 106,425
Foster Wheeler Corporation 300 11,138
General Electric Company 7,100 702,013
Grainger (WW), Incorporated 300 24,075
Illinois Tool Works, Incorporated 600 47,925
Ingersoll-Rand Company 500 22,250
Scientific-Atlanta, Incorporated 500 7,500
Tenneco, Incorporated 900 40,613
Tyco International Limited 800 42,300
Westinghouse Electric Corporation 1,900 37,763
WMX Technologies, Incorporated 2,300 75,038
-----------
1,331,153
-----------
CONSUMER CYCLICAL - 6.02%
American Greetings Company Class A 500 14,188
American Stores Company 700 28,613
Black & Decker Corp. 500 15,063
Chrysler Corporation 3,200 105,600
CVS Corporation 500 20,688
Dayton Hudson Corporation 1,100 43,175
Eaton Corporation 400 27,900
Federated Department Stores Incorporated* 1,000 34,125
Ford Motor Company 5,300 168,938
Gap (The), Incorporated 1,300 39,163
General Motors Corporation 3,400 189,550
Genuine Parts Company 900 40,050
Goodyear Tire & Rubber Company 800 41,100
HFS, Incorporated 600 35,850
Home Depot, Incorporated 2,100 105,263
Johnson Controls 300 24,863
K Mart Corporation* 2,200 22,825
Lowe's Companies, Incorporated 800 28,400
May Department Stores Company 1,200 56,100
NIKE, Incorporated 1,300 77,675
PACCAR, Incorporated 200 13,600
Penney, (J.C.) Company, Incorporated 1,100 53,625
Reebok International, Incorporated 300 12,600
Rite Aid Corporation 500 19,875
Sears, Roebuck & Company 1,700 78,413
Tandy Corporation 300 13,200
Limited (The), Incorporated 1,290 23,704
Toys "R" Us, Incorporated* 1,200 36,000
TRW, Incorporated 600 29,700
V.F. Corporation 400 27,000
Wal-Mart Stores, Incorporated 11,000 251,625
Walgreen Company 1,000 40,000
Whirlpool Corporation 500 23,313
Woolworth Corporation* 700 15,313
-----------
1,757,097
-----------
CONSUMER NON-DURABLE - 21.53%
Abbott Laboratories 3,400 172,550
Albertson's, Incorporated 1,200 42,750
American Brands, Incorporated 800 39,700
American Home Products Corporation 2,800 164,150
Andrew Corporation 300 15,919
Anheuser-Busch Companies, Incorporated 2,200 88,000
Archer-Daniels-Midland Company 2,495 54,890
Automatic Data Processing, Incorporated 1,400 60,025
Avon Products, Incorporated 600 34,275
Baxter International, Incorporated 1,300 53,300
Becton, Dickinson Company 700 30,363
Block, H&R Incorporated 500 14,500
Boston Scientific Corporation* 800 48,000
Bristol-Meyers Squibb Company 2,300 250,125
Browning-Ferris Industries, Incorporated 1,000 26,250
Brunswick Corporation 500 12,000
Campbell Soup Company 1,000 80,250
Clorox Co. 300 30,113
Coca-Cola Company 10,900 573,613
Cognizant Corporation 800 26,400
Colgate-Palmolive Company 600 55,350
Columbia/HCA Healthcare Corporation 3,050 124,288
Comcast Corporation 900 16,031
ConAgra, Incorporate, Class A. Special 1,100 54,725
CPC International, Incorporated 700 54,250
CUC International, Incorporated 1,850 43,938
Donnelly (RR) & Sons Company 800 25,100
Dow Jones, & Company, Incorporated 600 20,325
Dun & Bradstreet Corporation 1,200 28,500
Gannett Company, Incorporated 800 59,900
General Mills, Incorporated 700 44,363
Gillette Company 1,900 147,725
Heinz (H.J.) Company 1,700 60,775
Harrahs Entertainment, Incorporated* 500 9,938
Hershey Foods Corporation 900 39,375
Hilton Hotels Corporation 900 23,513
International Flavors & Fragrance,
Incorporated 500 22,500
Interpublic Group Companies,
Incorporated 600 28,500
Johnson & Johnson 5,800 288,550
Kellogg Company 1,000 65,625
King World Producation, Incorporated* 300 11,063
Kroger Company* 700 32,550
Lilly,(Eli) & Company 2,400 175,200
Loews Corporation 600 56,550
Manor Care 400 10,800
Mattel, Incorporated 1,250 34,688
Marriott International 600 33,150
McDonalds Corporation 3,100 140,275
McGraw Hill Companies, Incorporated 600 27,675
Medtronic, Incorporated 1,100 74,800
Merck & Company, Incorporated 5,300 420,025
PepsiCo, Incorporated 6,700 195,975
Pfizer, Incorporated 2,800 232,050
Pharmacia & Upjohn, Incorporated 2,200 87,175
Philip Morris Companies, Incorporated 3,600 405,450
Procter & Gamble Company 3,000 322,500
Ralston-Ralston Purina Group 500 36,688
Sara Lee Corporation 2,300 85,675
Schering-Plough Corporation 1,600 103,600
Seagrams Company, Limited 1,700 65,875
St. Jude Medical* 400 17,050
Sysco Corporation 900 29,363
Tele-Communications, Incorporated* 1,600 20,900
Tenet Healthcare Corporation* 1,100 24,063
Time Warner, Incorporated 2,600 97,500
Tribune Company 400 31,550
UST, Incorporated 800 25,900
United HealthCare Corporation 900 40,500
Viacom, Inc. - Class B* 1,300 45,338
Walt Disney Company, The 3,019 210,198
Warner-Lambert Company 1,300 97,500
Wendy's International 700 14,350
Winn-Dixie Stores, Incorporated 700 22,138
Wrigley, (Wm), Jr. Company 500 28,125
-----------
6,286,683
-----------
ENERGY - 7.95%
Amerada Hess Corporation 500 28,938
Amoco Corporation 2,300 185,150
Atlantic Richfield Company 800 106,000
Burlington Resources, Incorporated 600 30,225
Chevron Corporation 2,800 182,000
Columbia Gas System, Incorporated 300 19,088
Dresser Industries, Incorporated 1,200 37,200
Enron Corporation 1,100 47,438
Exxon Corporation 5,300 519,400
Halliburton Company 600 36,150
Kerr-McGee Company 300 21,600
Mobil Corporation 1,700 207,825
Occidental Petroleum 1,600 37,400
Phillips Petroleum Company 1,300 57,525
Royal Dutch Petroleum Company ADR 2,300 392,725
Schlumberger Limited 1,400 139,825
Sun Company, Incorporated 700 17,063
Texaco, Incorporated 1,200 117,750
USX-Marathon 1,400 33,425
Union Pacific Resources Group 1,092 31,941
Unocal Corporation 1,100 44,688
Williams Companies 750 28,125
-----------
2,321,481
-----------
MANUFACTURING - 7.68%
Air Products & Chemicals, Incorporated 600 41,475
Alcan Aluminum Limited 1,500 50,438
Allegheny Teledyne, Incorporated 800 18,400
Aluminum Company of America 1,100 70,125
Applied Materials Incorporated* 900 32,344
Barrick Gold 1,800 51,750
Bemis Company 300 11,063
Bethlehem Steel Corporation* 700 6,300
Centex Corporation 100 3,763
Champion International Corporation 500 21,625
Corning, Incorporated 1,100 50,875
Crown Cork & Seal Company, Incorporated 600 32,625
Dow Chemical Company 1,200 94,050
DuPont (E.I.) De Nemours & Company 2,500 235,938
Eastman Chemical Company 400 22,100
Eastman Kodak Company 1,500 120,375
Englehard Corporation 600 11,475
Fluor Corporation 500 31,375
Freeport McMoran Copper 600 17,925
Fresenius Medical Care* 400 56
Georgia-Pacific Company 500 36,000
Grace, (WR) & Company 400 20,700
Great Lakes Chemical Corporation 400 18,700
Hercules, Incorporated 600 25,950
Inco, Limited 1,100 35,063
International Paper Company 1,300 52,488
ITT Corporation 600 26,025
Kimberly-Clark Corporation 1,300 123,825
Louisiana-Pacific Corporation 600 12,675
Mallincrokdt Group, Incorporated 500 22,063
Masco Corporation 800 28,800
Minnesota Mining & Manufacturing Company 1,900 157,463
Mead Corporation 300 17,438
Monsanto Company 2,700 104,963
Morton International, Incorporated 700 28,525
Nalco Chemical Company 400 14,450
Newmont Mining Corporation 1,200 53,700
Nucor Corporation 500 25,500
Owens Corning 300 12,788
Phelps Dodge Corporation 500 33,750
Placer Dome, Incorporated 1,200 26,100
PPG Industries, Incorporated 900 50,513
Praxair Incorporated 700 32,288
Reynolds Metals Company 400 22,550
Rohm & Haas 300 24,488
Rubbermaid, Incorporated 800 18,200
Sherwin- Williams 500 28,000
Silicon Graphics Incorporated* 900 22,950
Union Camp Corporation 400 19,100
Union Carbide Corporation 700 28,613
Unilever (N.V.) ADR 700 122,675
USX-US Steel Group 500 15,688
Weyerhaeuser Company 1,000 47,375
Worthington Industries, Incorporated 500 9,063
-----------
2,242,546
-----------
SERVICE - 0.21%
Alco Standard Corporation 600 30,975
Service Corporation International 1,100 30,800
-----------
61,775
-----------
TECHNOLOGY - 13.04%
3COM Corporation* 800 58,700
Advanced Micro Devices, Incorporated* 700 18,025
AirTouch Communications, Incorporated* 2,300 58,075
AlliedSignal Incorporated 1,300 87,100
Amgen, Incorporated* 1,200 65,250
Boeing Company 1,542 164,030
Cabletron Systems, Incorporated 800 26,600
Cisco Systems, Incorporated 2,900 184,513
COMPAQ Computers Corporation* 1,100 81,675
Computer Associates International,
Incorporated 1,600 79,600
Computer Sciences Corporation* 400 32,850
Digital Equipment Corporation* 700 25,463
Dell Computer Corporation 800 42,500
First Data Corporation 2,000 73,000
Hewlett-Packard Company 4,700 236,175
Honeywell, Incorporated 600 39,450
Intel Corporation 3,700 484,469
International Business Machines
Corporation 2,300 347,300
Lockheed Martin Corporation 900 82,350
LSI Logic Corporation* 600 16,050
Lucent Technologies 2,785 128,806
McDonnell Douglas Corporation 1,000 64,000
Micron Technology Incorporated 1,000 29,125
Microsoft Corporation* 5,200 429,650
Motorola Incorporated 2,600 159,575
Nothern Telecom, Limited 1,200 74,250
Novell, Incorporated* 1,600 15,150
Oracle Systems Corporation 2,900 121,075
Perkin-Elmer Corporation 300 17,663
Pitney-Bowes Incorporated 800 43,600
Raytheon Company 1,100 52,938
Rockwell International Corporation 1,000 60,875
Seagate Technology, Incorporated 1,000 39,500
Sun Microsystems, Incorporated 1,600 41,100
Tandem Computer Incorporated* 600 8,250
Tektronix, Incorporated 200 10,250
Tellabs, Incorporated 800 30,100
Texas Instruments, Incorporated 900 57,375
Textron Incorporated 400 37,700
Unisys Corporation* 900 6,075
United Technologies Corporation 1,200 79,200
Western Atlas, Incorporated* 300 21,263
Xerox Corporation 1,500 78,938
-----------
3,809,633
-----------
TRANSPORTATION - 1.51%
AMR Corporation* 400 35,250
Burlington Northern Santa Fe Corporation 900 77,738
Caliber System, Incorporated 300 5,775
Conrail Incorporated 400 39,850
CSX Corporation 1,300 54,925
Delta Air Lines 400 28,350
Federal Express 600 26,700
Laidlaw Incorporated 1,400 16,100
Norfolk Southern Company 700 61,250
Ryder System 500 14,063
Southwest Airlines Company 700 15,488
Union Pacific Corporation 1,100 66,138
-----------
441,627
-----------
UTILITY - 8.13%
ALLTELL Corporation 1,000 31,375
American Electric Power Company,
Incorporated 1,000 41,125
AT&T Corporation 6,900 300,150
Ameritech Corporation 2,500 151,563
Baltimore Gas & Electric Company 800 21,400
Bell Atlantic Corporation 2,000 129,500
BellSouth Corporation 4,300 173,613
Carolina Power & Light Company 700 25,550
Central & Southwest Corporation 1,000 25,625
CinergyCorporation 700 23,363
Coastal Corporation 500 24,438
Consolidated Edison Co. of N.Y.,
Incorporated 900 26,325
Consolidated Natural Gas Company 500 27,625
Dominion Resources 900 34,650
Duke Power 1,000 46,250
DTE Energy Company 700 22,663
Edison International 1,900 37,763
Entergy Corporation 1,000 27,750
FPL Group Incorporated 1,000 46,000
General Public Utilities Corporation 600 20,175
GTE Corporation 3,800 172,900
Houston Industries, Incorporated 1,100 24,888
MCI Communications Corporation 3,000 98,063
Niagara Mohawk Power Corporation* 600 5,925
NYNEX Corporation 2,000 96,250
Pacific Gas & Electric Company 1,900 39,900
Pacific Telesis Group 1,800 66,150
PacifiCorp 1,400 28,700
PanEnergy Corporation 700 31,500
PECO Energy Company 900 22,725
Public Service Enterprise Group,
Incorporated 900 24,525
SBC Communications 2,600 134,550
Southern Company 2,900 65,613
Sprint Corporation* 1,600 63,800
Sonat, Incorporated 400 20,600
Texas Utilities Company 1,000 40,750
Unicom Corporation 1,000 27,125
Union Electric Company 600 23,100
U.S. West Communications Group 2,100 67,725
US West Media Group* 2,200 40,700
WorldCom, Incorporated 1,700 44,306
-----------
2,376,698
-----------
Total Common Stocks (cost $21,107,889) 24,089,363
<CAPTION>
SHORT-TERM INVESTMENTS - 17.76%
PRINCIPAL VALUE
--------- -----
<S> <C> <C>
US Treasury Bill<F2>
(5.360% due 05/01/97) $5,200,00 5,112,578
Portico US Federal Money Market Fund 73,782 73,782
-----------
Total Short-Term Investments
(cost $5,186,360) 5,186,360
-----------
TOTAL INVESTMENTS -
100.24% (cost $26,294,249)<F1> 29,275,723
-----------
OTHER ASSETS AND LIABILITIES - (0.24%) (71,113)
-----------
TOTAL NET ASSETS - 100% $29,204,610
- -----------
*Non-income producing
(ADR) American Depository Receipt
<FN>
<F1> Represents cost for Federal income tax purposes. Gross unrealized
appreciation and depreciation of securities at December 31, 1996
was $3,401,349 and $370,475 respectively.
<F2> Security is held by the custodian in a segregated account for open
futures contracts. At December 31, 1996, the Fund's open futures contracts
were as follows:
</FN>
</TABLE>
<TABLE>
<CAPTION>
Unrealized Appreciation/
Type Contracts (Depreciation)
- ---- ---------- ------------
<S> <C> <C>
Standard & Poor's 500 Index (03/97) 10 $57,750
Standard & Poor's 500 Index (03/97) 2 6,350
Standard & Poor's 500 Index (03/97) 2 (14,700)
-------
$49,400
=======
</TABLE>
The accompanying notes are an integral part of the
financial statements.
<PAGE>
CARILLON FUND, INC.
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1996
NOTE 1 - SIGNIFICANT ACCOUNTING POLICIES
Carillon Fund, Inc. (the Fund) is registered under the
Investment Company Act of 1940, as amended, as a no-load,
diversified, open-end management investment company. The shares
of the Fund are sold only to The Union Central Life Insurance
Company (Union Central) and its separate accounts to fund the
benefits under certain variable insurance and retirement
products. The Fund's shares are offered in four different
series - Equity Portfolio, Capital Portfolio, Bond Portfolio,
and S&P 500 Index Portfolio. The Equity Portfolio seeks long-
term appreciation of capital by investing primarily in common
stocks and other equity securities. The Capital Portfolio seeks
the highest total return through a combination of income and
capital appreciation consistent with the reasonable risks
associated with an investment portfolio of above-average quality
by investing in equity securities, debt instruments, and money
market instruments. The Bond Portfolio seeks a high level of
current income as is consistent with reasonable investment risk
by investing primarily in long-term, fixed-income, investment-
grade corporate bonds. The S&P 500 Index Portfolio seeks
investment results that correspond to the total return
performance of U.S. common stocks, as represented in the
Standard & Poor's 500 Index.
The preparation of financial statements in conformity with
generally accepted accounting principles requires management to
make estimates and assumptions that affect the reported amounts
of assets and liabilities and disclosure of contingent assets
and liabilities at the date of the financial statements and the
reported amounts of revenues and expenses during the reporting
period. Actual results could differ from those estimates.
SECURITIES VALUATION - Securities held in each Portfolio, except
for money market instruments maturing in 60 days or less, are
valued as follows: Securities traded on stock exchanges
(including securities traded in both the over-the-counter market
and on an exchange), or listed on the NASDAQ National Market
System, are valued at the last sales price as of the close of
the New York Stock Exchange on the day the securities are being
valued, or, lacking any sales, at the closing bid prices.
Securities traded only in the over-the-counter market are valued
at the last bid price, as of the close of trading on the New
York Stock Exchange, quoted by brokers that make markets in the
securities. Other securities for which market quotations are
not readily available are valued at fair value as determined in
good faith under procedures adopted by the Board of Directors.
Money market instruments with a remaining maturity of 60 days or
less held in each Portfolio are valued at amortized cost which
approximates market.
SECURITIES TRANSACTIONS AND INVESTMENT INCOME - Securities
transactions are recorded on the trade date (the date the order
to buy or sell is executed). Dividend income is recorded on the
ex-dividend date and interest income is recorded on the accrual
basis. All amortization of discount is recognized currently
under the effective interest method. Gains and losses on sales
of investments are calculated on the identified cost basis for
financial reporting and tax purposes.
FEDERAL TAXES - It is the intent of the Fund to comply with the
requirements of the Internal Revenue Code applicable to
regulated investment companies and to distribute all of its net
investment income and any net realized capital gains. Regulated
investment companies owned by the segregated asset accounts of a
life insurance company, held in connection with variable annuity
contracts, are exempt from excise tax on undistributed income.
Therefore, no provision for income or excise taxes has been
recorded.
DISTRIBUTIONS -Distributions from net investment income in all
Portfolios are declared and paid quarterly. Net realized
capital gains are distributed periodically, no less frequently
than annually. Distributions are recorded on the ex-dividend
date. All distributions are reinvested in additional shares of
the respective Portfolio at the net asset value per share.
The amount of distributions are determined in accordance with
federal income tax regulations which may differ from generally
accepted accounting principles. These "book/tax" differences
are either considered temporary or permanent in nature. To the
extent these differences are permanent in nature, such amounts
are reclassified within the capital accounts based on their
federal tax-basis treatment; temporary differences do not
require reclassification. Distributions which exceed net
investment income and net realized capital gains for financial
reporting purposes but not for tax purposes are reported as
distributions in excess of net investment income or
distributions in excess of net realized capital gains. To the
extent they exceed net investment income and net realized
capital gains for tax purposes, they are reported as
distributions of paid-in-capital.
EXPENSES - Allocable expenses of the Fund are charged to each
Portfolio based on the ratio of the net assets of each Portfolio
to the combined net assets of the Fund. Nonallocable expenses
are charged to each Portfolio based on specific identification.
NOTE 2 - TRANSACTIONS WITH AFFILIATES
INVESTMENT ADVISORY FEES - The Fund pays investment advisory
fees to Carillon Advisers, Inc. (the Adviser), under terms of an
Investment Advisory Agreement (the Agreement). Certain officers
and directors of the Adviser are affiliated with the Fund. The
Fund pays the Adviser, as full compensation for all services and
facilities furnished, a monthly fee computed separately for each
Portfolio on a daily basis, at an annual rate, as follows:
(a) for the Equity Portfolio - .65% of the first
$50,000,000, .60% of the next $100,000,000, and .50% of all over
$150,000,000 of the current net asset value:
(b) for Capital Portfolio - .75% of the first
$50,000,000, .65% of the next $100,000,000, and .50% of all over
$150,000,000 of the current net asset value.
(c) for the Bond Portfolio - .50% of the first
$50,000,000, .45% of the next $100,000,000, and .40% of all over
$150,000,000 of the current net asset value.
(d) for the S & P 500 Index Portfolio - .30% of the
current net asset value.
The Agreement provides that if the total operating expenses of
the Fund, exclusive of the advisory fee and certain other
expenses as described in the Agreement, for any fiscal quarter
exceed an annual rate of 1% of the average daily net assets of
the Equity, Capital , or Bond Portfolios, the Adviser will
reimburse the Fund for such excess, up to the amount of the
advisory fee for that year. The Adviser has agreed to waive its
advisory fee and pay any other expenses of the S&P 500 Index
Portfolio to the extent that such expenses exceed 0.60% of its
average annual net assets. As a result, for the year ended
December 31, 1996, the Adviser waived management fees of $40,752
for the S&P 500 Index Portfolio.
In addition to providing investment advisory services, the
Adviser is responsible for providing certain administrative
functions to the Fund. The Adviser has entered into an
Administration Agreement with Carillon Investments, Inc. (the
Distributor) under which the Distributor furnishes substantially
all of such services for an annual fee of .20% of the Fund's
average net assets for the Equity, Capital, and Bond Portfolios,
and .05% of the Fund's average net assets for the S & P 500
Index Portfolio. The fee is borne by the Adviser, not the Fund.
Carillon Advisers, Inc. and Carillon Investments, Inc. are
wholly-owned subsidiaries of Union Central.
DIRECTORS' FEES - Each director who is not affiliated with the
Adviser receives fees from the Fund for service as a director.
Members of the Board of Directors who are not affiliated with
the Adviser are eligible to participate in a deferred
compensation plan. The value of each director's deferred
compensation account will increase or decrease at the same rate
as if it were invested in shares of the Scudder Money Market
Fund.
NOTE 3 - FUTURES CONTRACTS
S&P 500 Index Portfolio ("Index") may purchase futures contracts
on the Standard & Poor's 500 Stock Index. These contracts
provide for the sale of a specified quantity of a financial
instrument at a fixed price at a future date. When Index enters
into a futures contract, it is required to deposit and maintain
as collateral such initial margin as required by the exchange on
which the contract is traded. Under terms on the contract,
Index agrees to receive from or pay to the broker an amount
among equal to the daily fluctuation in the value of the
contract (known as the variation margin). The variation margin
is recorded as unrealized gain or loss until the contract
expires or is otherwise closed, at which time the gain or loss
is realized. Index invests in futures as a substitute to
investing in the 500 common stock positions in the Standard &
Poor's 500 Index. The potential risk to Index is that the
change in the value in the underlying securities may not
correlate to the value of the contracts.
NOTE 4 - SUMMARY OF PURCHASES AND SALES OF INVESTMENTS
Purchases and sales of securities for the year ended December
31, 1996 excluding short-term obligations, follow:
<TABLE>
<CAPTION>
Equity Capital Bond S&P 500
Portfolio Portfolio Portfolio Index
--------- --------- --------- -------
<S> <C> <C> <C> <C>
Total Cost of
Purchases of:
Common Stocks $134,595,735 $32,689,304 $ 500,000 $21,253,070
U.S. Government
Securities -- 29,758,818 20,072,333 --
Corporate Bonds -- 4,655,726 143,754,858 --
------------ ----------- ------------ -----------
$134,595,735 $67,103,848 $164,327,191 $21,253,070
============ =========== ============ ===========
Total Proceeds
from Sales of:
Common Stocks $121,196,447 $45,862,233 $ 56,998 $ 148,079
U.S. Government
Securities -- 17,316,857 13,542,937 --
Corporate Bonds -- 5,810,391 137,605,856 --
------------ ----------- ------------ -----------
$121,196,447 $68,989,481 $151,205,791 $ 148,079
============ =========== ============ ===========
</TABLE>
<PAGE>
Note 5 - FINANCIAL HIGHLIGHTS
Computed on the basis of a share of capital stock
outstanding throughout the year.
<TABLE>
<CAPTION>
Equity Portfolio
Year Ended December 31,
-----------------------
1996 1995 1994 1993 1992
---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
Net Asset Value,
Beginning of Year $16.54 $14.30 $14.58 $13.74 $12.60
------- ------- ------- ------- -------
Investment Activities:
Net investment income .29 .24 .20 .16 .19
Net realized and unrealized 3.61 3.36 .31 1.69 1.27
gains/(losses)
------- ------- ------- ------- -------
Total from Investment
Operations 3.90 3.60 .51 1.85 1.46
------- ------- ------- ------- -------
Distributions:
Net investment income (.27) (.23) (.19) (.16) (.19)
Net realized gains (.72) (1.13) (.60) (.85) (.13)
------- ------- ------- ------- -------
Total Distributions (.99) (1.36) (.79) (1.01) (.32)
------- ------- ------- ------- -------
Net Asset Value,
End of year $19.45 $16.54 $14.30 $14.58 $13.74
------- ------- ------- ------- -------
Total Return 24.52% 26.96% 3.42% 14.11% 11.78%
Ratios/Supplemental Data:
Ratio of Expenses to
Average Net Assets .64% .66% .69% .70% .72%
Ratio of Net Investment
Income to Average Net Assets 1.66% 1.73% 1.45% 1.18% 1.47%
Portfolio Turnover Rate 52.53% 34.33% 40.33% 37.93% 46.75%
Average Commission Rate Paid $.0628<F1>
Net Assets, End of Year
(000's) $288,124 $219,563 $157,696 $138,239 $102,306
<FN>
<F1> Represents the dollar amount of commissions paid on Portfolio
transactions divided by the total number of shares purchased and sold for
which commissions were charged. Disclosure not required for periods prior
to fiscal 1996.
</FN>
</TABLE>
<PAGE>
Note 5 - FINANCIAL HIGHLIGHTS
Computed on the basis of a share of capital stock outstanding
throughout the year.
<TABLE>
<CAPTION>
Capital Portfolio
Year Ended December 31
----------------------
1996 1995 1994 1993 1992
---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
Net Asset Value,
Beginning of Year $13.72 $13.19 $13.81 $12.99 $12.82
Investment Activities:
Net investment income .63 .64 .52 .43 .42
Net realized and unrealized 1.36 1.15 (.39) 1.17 .56
gains/(losses)
Total from Investment
Operations 1.99 1.79 .13 1.60 .98
Distributions:
Net investment income (.57) (.64) (.52) (.42) (.42)
Net realized gains (.19) (.62) (.23) (.36) (.39)
Total Distributions (1.76) (1.26) (.75) (.78) (.81)
Net Asset Value,
End of year $14.95 $13.72 $13.19 $13.81 $12.99
Total Return 14.94% 14.28% .94% 12.72% 7.93%
Ratios/Supplemental Data:
Ratio of Expenses to
Average Net Assets .77% .77% .80% .82% .88%
Ratio of Net Investment
Income to Average Net Assets 4.42% 4.99% 4.25% 3.31% 3.49%
Portfolio Turnover Rate 53.11% 43.83% 41.89% 32.42% 39.74%
Average Commission
Rate Paid .0615<F1>
Net Assets,
End of Year (000's) $159,294 $145,623 $119,263 $100,016 $68,674
<FN>
<F1> Represents the dollar amount of commissions paid on
Portfolio transactions divided by the total number of shares
purchased and sold for which commissions were charged.
Disclosure not required for periods prior to fiscal 1996.
</TABLE>
<PAGE>
Carillon Fund, Inc.
Notes to Financial Statements
Note 5 - FINANCIAL HIGHLIGHTS
Computed on the basis of a share of capital stock outstanding
throughout the period.
<TABLE>
<CAPTION>
Bond Portfolio
Year Ended December 31
----------------------------------------
1996 1995 1994 1993 1992
---- ---- ---- ---- ----
<S> <S> <C> <C> <C> <C>
Net Asset Value,
Beginning of Year $11.07 $10.04 $11.30 $10.91 $10.96
------ ------ ------ ------ ------
Investment Activities:
Net investment income .79 .88 .77 .73 .82
Net realized and unrealized (.04) .98 (.95) .54 (.01)
gains/(losses)
------ ------ ------ ------ ------
Total from Investment
Operations .75 1.86 (.18) 1.27 .81
------ ------ ------ ------ ------
Distributions:
Net investment income (.87) (.83) (.78) (.73) (.82)
In excess of net
investment income (.04) -- -- -- --
Net realized gains -- -- (.30) (.15) (.04)
------ ------ ------ ------ ------
Total Distributions (.91) (.83) (1.08) (.88) (.86)
------ ------ ------ ------ ------
Net Asset Value,
End of period $10.91 $11.07 $10.04 $11.30 $10.91
====== ====== ====== ====== ======
Total Return 7.19% 19.03% (1.63%) 11.94% 7.65%
Ratios/Supplemental Data:
Ratio of Expenses to
Average Net Assets .62% .65% .68% .66% .69%
Ratio of Net Investment
Income to Average Net Assets 7.24% 7.43% 7.21% 6.65% 7.59%
Portfolio Turnover Rate 202.44% 111.01% 70.27% 137.46% 40.91%
Net Assets,
End of Year (000's) $85,634 $73,568 $55,929 $54,128 $38,557
</TABLE>
<PAGE>
Note 5 - FINANCIAL HIGHLIGHTS
Computed on the basis of a share of capital stock outstanding
throughout the year.
<TABLE>
<CAPTION>
S & P 500 Index Portfolio
Year Ended
December 31, 1996<F1>
---------------------
<S> <C>
Net Asset Value,
Beginning of Year $ 10.00
Investment Activities:
Net investment income .20
Net realized and unrealized 2.12
gains/(losses) -------
Total from Investment Operations 2.32
Distributions:
Net investment income (.19)
Net realized gains --
Total Distributions (.19)
Net Asset Value,
End of Year $ 12.13
Total Return, not annualized 23.37%
Ratios/Supplemental Data:
Ratio of Net Expenses to
Average Net Assets .59%<F2>
Ratio of Net Investment
Income to Average Net Assets 2.14%<2>
Portfolio Turnover Rate 1.09%
Average Commission Rate Paid $ .0601<F3>
Net Assets, End of Year (000's) $ 29,205
<FN>
<F1> The portfolio commenced operation on December 29, 1995. The financial
highlights table for the period ending December 31, 1995 is not presented
because the activity for the period did not round to $0.01 in any category
of the reconciliation of beginning to ending net asset value per share. The
ratios and total return were all less than 0.1%. The net assets at December
31, 1995 were $305,148.
<F2> The ratios of net expenses to average net assets would have increased
and net investment income to average net assets would have decreased by .25%
for the year ended December 31, 1996, had the Adviser not waived a portion
of its fee.
<F3> Represents the dollar amount of commissions paid on Portfolio
transactions divided by the total number of shares purchased and sold for
which commissions were charged. Disclosure not required for periods prior
to fiscal 1996.
</FN>
</TABLE>
<PAGE>
PART C
OTHER INFORMATION
<PAGE>
CARILLON FUND, INC.
PART C - OTHER INFORMATION
Item 24. Financial Statements and Exhibits
(a) Financial Statements
The financial statements of Carillon Fund, Inc. are
included in Part B.
(b) Exhibits
(1) Articles of Incorporation of Carillon Fund,
Inc. - previously filed (initial filing on April 3, 1984)
(2) By-laws of Carillon Fund, Inc. - previously
filed (initial filing on April 3 1984)
(3) Not Applicable
(4) None
(5) (a) Investment Advisory Agreement -
previously filed (initial filing on April 3, 1984)
(b) Amendment to Investment Advisory
Agreement - previously filed (Post-Effective Amendment No. 3 -
May 1, 1987)
(c) Amendment to Investment Advisory
Agreement - previously filed (Post-Effective Amendment No. 15)
(6) None
(7) None
(8) (a) Custodian Agreement - previously filed
(Post-Effective Amendment No. 6 - May 1, 1990)
(b) Portfolio Accounting Agreement -
previously filed (Post-Effective Amendment No. 6 - May 1, 1990)
(9) (a) Transfer Agency Agreement - previously
filed (Post-Effective Amendment No. 6 - May 1, 1990)
(b) Service Agreement - previously filed
(Post-Effective Amendment No. 9 - May 1, 1992)
(10) Opinion and consent of counsel - previously
filed (Pre-Effective Amendment No. 1 - July 2 , 1984)
(11) Consent of Deloitte & Touche LLP - filed
herewith
(12) None
(13) Letter regarding initial capital - previously
filed (Pre-Effective Amendment No. 1 - July 2, 1984)
(14) Not Applicable
(15) Not Applicable
(16) None
____________________________
* To be filed by amendment
Item 25. Persons Controlled by or Under Common Control with
Registrant
The Union Central Life Insurance Company ("Union Central")
provided the initial investment in Carillon Fund, Inc. Union
Central votes the shares of the Fund held with respect to
registered variable contracts in accordance with instructions
received from such variable contract owners. Shares of the Fund
held in unregistered separate accounts and in its general assets
are voted by Union Central in its discretion.
Set forth below is a chart showing the entities controlled
by Union Central, the jurisdictions in which such entities are
organized, and the percentage of voting securities owned by the
person immediately controlling each such entity.
THE UNION CENTRAL LIFE INSURANCE COMPANY,
its Subsidiaries and Affiliates
I. The Union Central Life Insurance Company (Ohio)
A. Carillon Investments, Inc. (Ohio) -100% owned
B. Carillon Marketing Agency, Inc. (Delaware) -100%
owned
a. Carillon Marketing Agency of Alabama, Inc.
(Alabama) - 100% owned
b. Carillon Marketing Agency of Idaho, Inc.
(Idaho) -100% owned
c. Carillon Marketing Agency of Kentucky, Inc.
(Kentucky) - 100 owned
d. Carillon Marketing Agency of Maine, Inc.
(Maine) - 100% owned
e. Carillon Insurance Agency of Massachusetts,
Inc. (Massachusetts) 100% owned
f. Carillon Marketing Agency of New Mexico, Inc.
(New Mexico) - 100% owned
g. Carillon Marketing Agency of Ohio, Inc. (Ohio)
- -100% owned
h. Carillon Marketing Agency of Pennsylvania, Inc.
(Pennsylvania) 100% owned
i. Carillon Marketing Agency of Texas, Inc.
(Texas) - 100% owned
C. Carillon Advisers, Inc. (Ohio) -100% owned
<PAGE>
a. First Summit Capital Management (Ohio) - 51%
owned
D. The Manhattan Life Insurance Company (New York) -
100% owned
E. Family Enterprise Institute, Inc. (Delaware) -100%
owned
II. Mutual Funds of the Carillon Group
A. Carillon Fund, Inc.* (Maryland)
B. Carillon Investment Trust** (Massachusetts)
* At May 30, 1997, The Union Central Life Insurance Company
owned 100% of the outstanding shares of Carillon Fund, Inc.
** At May 30, 1997, The Union Central Life Insurance Company
owned 78% of the outstanding shares of Carillon Investment
Trust.
III. Summit Investment Trust (Massachusetts) - a mutual fund
whose investment adviser is First Summit Capital Management.
Item 26. Number of Holders of Securities
<TABLE>
<CAPTION>
Number of Record Holders
Title of Class as of May 30, 1997
<S> <C>
Equity Portfolio 1 (See Item 25)
Bond Portfolio 1 (See Item 25)
Capital Portfolio 1 (See Item 25)
S&P 500 Index Portfolio 1 (See Item 25)
Micro-Cap Portfolio 0 (See Item 25)
</TABLE>
***
Item 28. Business and other Connections of Investment
Adviser
Information regarding the officers and directors of
Carillon Advisers, Inc. ("CAI") and their business, profession
or employment of a substantial nature during the last two years
is set forth below. The address of all the persons listed below
is 1876 Waycross Road, Cincinnati, Ohio 45240.
<TABLE>
<CAPTION>
Name and Position with Principal Occupation(s)
Address the Adviser During Past Two Years
- ------- ------------- ---------------------
<S> <C> <C>
Harry Rossi Director Director Emeritus, The Union Central
Life Insurance Company ("Union
Central"); Director, Carillon
Group of Mutual Funds
Larry R. Pike Director Chairman, President and Chief
Executive Officer, Union Central
George L. Clucas Director, Senior Vice President, Union Central;
President Director, President and Chief Executive
and Chief Officer, Carillon Group of Mutual
Executive Funds
Officer
Steven R. Vice President Vice President, Union Central
Sutermeister
D. Stephen Cole Vice President Vice President, Union Central
Thomas G. Knipper Treasurer Assistant Controller, Union Central;
Controller, Carillon Group of Mutual
Funds; prior to July, 1995, Treasurer
of The Gateway Trust and Vice
President and Controller of Gateway
Advisers, Inc.
John F. Labmeier Secretary Second Vice President, Associate General
Counsel and Assistant Secretary, Union
Central; Vice President and Secretary,
Carillon Group of Mutual Funds and
Carillon Investments, Inc.
</TABLE>
Item 29. Principal Underwriters
None.
Item 30. Location of Accounts and Records
All accounts, books and other documents required to be
maintained by Section 31(a) of the 1940 Act and the Rules
thereunder will be maintained at the offices of the Fund or at
Firstar Trust Company (formerly known as First Wisconsin Trust
Company), Mutual Fund Services, P.O. Box 701, Milwaukee, WI
53201-0701.
Item 31. Management Services
All management-related service contracts are discussed in
Part A or B of this Registration Statement.
Item 32. Undertakings
(a) Not applicable.
(b) Not applicable.
(c) Insofar as indemnification for liabilities arising
under the Securities Act of 1933 may be permitted to directors,
officers and controlling persons of the registrant, the
registrant has been advised that in the opinion of the
Securities and Exchange Commission such indemnification is
against public policy as expressed in the Act and is, therefore,
unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the
registrant of expenses incurred or paid by a director, officer
or controlling person of the registrant in the successful
defense of any such action, suit or proceeding) is asserted by
such director, officer or controlling person in connection with
the securities being registered, the registrant will, unless in
the opinion of its counsel the matter has been settled by
controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Act and will be
governed by the final adjudication of such issue.
(d) Registrant hereby undertakes to furnish each
person to whom a prospectus is delivered with a copy of its
latest annual report to shareholders, upon request and without
charge.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933
and the Investment Company Act of 1940, the Registrant, Carillon
Fund, Inc., has duly caused this Post-effective Amendment to the
Registration Statement to be signed on its behalf by the
undersigned, thereto duly authorized, in the City of Cincinnati,
State of Ohio on the 27th day of August, 1997.
CARILLON FUND, INC.
(SEAL)
Attest: /s/ John F. Labmeier By: /s/ George L. Clucas
George L. Clucas, President
Pursuant to the requirements of the Securities Act of 1933,
this Post-effective Amendment to the Registration Statement has
been signed below by the following persons in the capacities and
on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
<S> <C> <C>
/s/ George L. Clucas President 8-27-97
George L. Clucas and Director
(Principal
Executive
Officer)
/s/ Thomas G. Knipper Controller 8-27-97
Thomas G. Knipper (Principal
Financial
and Accounting
Officer)
* /s/ George M. Callard, M.D. Director 8-27-97
George M. Callard, M.D.
* /s/ Theodore H Emmerich Director 8-27-97
Theodore H. Emmerich
* /s/ James M. Ewell Director 8-27-97
James M. Ewell
* /s/ Richard H. Finan Director 8-27-97
Richard H. Finan
* /s/ Jean Patrice Harrington, S.C. Director 8-27-97
Jean Patrice Harrington, S.C.
* /s/ John H. Jacobs Director 8-27-97
John H. Jacobs
* /s/ Charles W. McMahon Director 8-27-97
Charles W. McMahon
* /s/ Harry Rossi Director 8-27-97
Harry Rossi
</TABLE>
*By /s/ John F. Labmeier, pursuant to Power of Attorney
previously filed.
<PAGE>
TABLE OF EXHIBITS
(11) Consent of Deloitte & Touche LLP
Financial Data Schedule for the Bond Portfolio
Financial Data Schedule for the Equity Portfolio
Financial Data Schedule for the Capital Portfolio
Financial Data Schedule for the S&P 500 Index Portfolio
INDEPENDENT AUDITORS' CONSENT
We consent to the use in this Post-Effective Amendment No. 18 to
Registration Statement under the Securities Act of 1933 of
Carillon Fund, Inc. filed under Registration Statement No.
2-90309, of our report dated February 3, 1997 on the financial
statements of the Equity Portfolio, the Capital Portfolio, the
Bond Portfolio and the S&P 500 Index Portfolio of Carillon Fund,
Inc., and to the reference to us as experts under the caption
"Independent Auditors" both of which appear in the Statement of
Additonal Information, which is part of such Registration
Statement.
/s/ Deloitte & Touche LLP
DELOITTE & TOUCHE LLP
Dayton, Ohio
August 22, 1997
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000743773
<NAME> CARILLON FUND INC.
<SERIES>
<NUMBER> 1
<NAME> BOND PORTFOLIO
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> JUN-30-1997
<INVESTMENTS-AT-COST> 291,017,333
<INVESTMENTS-AT-VALUE> 87,712,519
<RECEIVABLES> 1,432,653
<ASSETS-OTHER> 14,208
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 89,159,380
<PAYABLE-FOR-SECURITIES> 998,907
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 145,849
<TOTAL-LIABILITIES> 1,144,756
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 85,496,558
<SHARES-COMMON-STOCK> 8,038,070
<SHARES-COMMON-PRIOR> 7,847,440
<ACCUMULATED-NII-CURRENT> 301,209
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 521,671
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 1,695,186
<NET-ASSETS> 88,014,624
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 3,374,684
<OTHER-INCOME> 0
<EXPENSES-NET> 258,939
<NET-INVESTMENT-INCOME> 3,115,745
<REALIZED-GAINS-CURRENT> 521,815
<APPREC-INCREASE-CURRENT> (343,006)
<NET-CHANGE-FROM-OPS> 3,294,554
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 2,517,892
<DISTRIBUTIONS-OF-GAINS> 481,253
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 538,907
<NUMBER-OF-SHARES-REDEEMED> (624,968)
<SHARES-REINVESTED> 276,691
<NET-CHANGE-IN-ASSETS> 2,380,365
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 481,109
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 296,645
<GROSS-ADVISORY-FEES> 204,142
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 258,939
<AVERAGE-NET-ASSETS> 85,938,564
<PER-SHARE-NAV-BEGIN> 10.91
<PER-SHARE-NII> .34
<PER-SHARE-GAIN-APPREC> .08
<PER-SHARE-DIVIDEND> .32
<PER-SHARE-DISTRIBUTIONS> .06
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 10.95
<EXPENSE-RATIO> .61
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000743773
<NAME> CARILLON FUND INC.
<SERIES>
<NUMBER> 2
<NAME> EQUITY PORTFOLIO
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> JUN-30-1997
<INVESTMENTS-AT-COST> 250,986,522
<INVESTMENTS-AT-VALUE> 310,759,196
<RECEIVABLES> 787,392
<ASSETS-OTHER> 32,463
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 311,579,051
<PAYABLE-FOR-SECURITIES> 1,581,018
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 167,699
<TOTAL-LIABILITIES> 1,748,717
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 227,752,582
<SHARES-COMMON-STOCK> 16,858,010
<SHARES-COMMON-PRIOR> 14,813,685
<ACCUMULATED-NII-CURRENT> 181,360
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 22,123,718
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 59,772,674
<NET-ASSETS> 309,830,334
<DIVIDEND-INCOME> 2,171,087
<INTEREST-INCOME> 708,997
<OTHER-INCOME> 0
<EXPENSES-NET> 907,307
<NET-INVESTMENT-INCOME> 1,972,777
<REALIZED-GAINS-CURRENT> 22,144,959
<APPREC-INCREASE-CURRENT> (610,487)
<NET-CHANGE-FROM-OPS> 23,507,249
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 2,526,115
<DISTRIBUTIONS-OF-GAINS> 34,344,113
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 784,912
<NUMBER-OF-SHARES-REDEEMED> (927,682)
<SHARES-REINVESTED> 2,187,096
<NET-CHANGE-IN-ASSETS> 21,706,611
<ACCUMULATED-NII-PRIOR> 734,698
<ACCUMULATED-GAINS-PRIOR> 34,323,872
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 808,766
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 98,541
<AVERAGE-NET-ASSETS> 291,305,386
<PER-SHARE-NAV-BEGIN> 19.45
<PER-SHARE-NII> .18
<PER-SHARE-GAIN-APPREC> 1.21
<PER-SHARE-DIVIDEND> .16
<PER-SHARE-DISTRIBUTIONS> 2.30
<RETURNS-OF-CAPITAL> 0
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