As filed with the Securities and Exchange Commission on August 15, 1996
Registration No. 2-93214
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM N-1A
REGISTRATION STATEMENT UNDER THE
SECURITIES ACT OF 1933 [ ]
POST-EFFECTIVE AMENDMENT NO. 29 [X]
and
REGISTRATION STATEMENT UNDER THE
INVESTMENT COMPANY [ ]
ACT OF 1940
AMENDMENT NO. 30
[X]
-----------------------------
COREFUNDS, INC.
(Exact Name of Registrant as Specified in Charter)
680 East Swedesford Road
Wayne, PA 19087
(Address of Principal Executive Offices)
Registrant's Telephone Number: 1-(800)355-CORE
JAMES W. JENNINGS, ESQUIRE
Morgan, Lewis & Bockius LLP
2000 One Logan Square
Philadelphia, PA 19103
(Name and Address of Agent for Service)
-----------------------------
It is proposed that this filing will become effective on August 21, 1996 after
filing pursuant to paragraph (b) of Rule 485.
The Registrant has registered an indefinite number of its Common Shares under
the Securities Act of 1933 pursuant to Rule 24f-2 under the Investment Company
Act of 1940. The Registrant filed a Rule 24f-2 notice covering the fiscal year
ended June 30, 1995 on August 25, 1995.
<PAGE>
CROSS REFERENCE SHEET
August 15, 1996
Prospectus
Form N-1A Item No.
Caption
PART A - Institutional Shares: Growth Equity Fund, Equity Fund, Special Equity
Fund, Equity Index Fund, International Growth Fund, Balanced Fund, Short
Intermediate Bond Fund, Bond Fund, Short-Term Income Fund, Government Income
Fund, Intermediate Municipal Bond Fund, Pennsylvania Municipal Bond Fund, New
Jersey Municipal Bond Fund, Global Bond Fund, Cash Reserve, Treasury Reserve and
Tax-Free Reserve Portfolios
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Item 1. Cover Page ...............................................................Cover Page
Item 2. Synopsis .................................................................Transaction and
Operating Expense
Tables
Item 3. Condensed Financial Information...........................................Financial Highlights
Item 4. General Description of Registrant.........................................Cover Page; Highlights;
Investment Objectives;
Investment Restrictions;
General Information
Item 5. Management of the Fund....................................................Cover Page; Management;
General Information;
Back Cover
Item 5A. Management Discussions
of Fund Performance ......................................................Disclosure in Annual
and Semi-Annual Reports
Item 6. Capital Stock and Other Securities........................................Cover Page;
Distributions; Taxes;
Description of Shares;
General Information; How
to Purchase and Redeem
Shares
Item 7. Purchase of Securities Being Offered......................................Valuation of Shares; How
to Purchase and Redeem
Shares
Item 8. Redemption or Repurchase .................................................How to Purchase and
Redeem Shares
Item 9. Pending Legal Proceedings.................................................*
</TABLE>
PART A - Individual Shares: Growth Equity Fund, Equity Fund, Special Equity
Fund, International Growth Fund, Balanced Fund, Short Intermediate Bond Fund,
Bond Fund, Short-Term Income Fund, Government Income Fund, Intermediate
Municipal Bond Fund,
<PAGE>
Pennsylvania Municipal Bond Fund, New Jersey Municipal Bond Fund, Global Bond
Fund, Cash Reserve, Treasury Reserve and Tax-Free Reserve Portfolios
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Item 1. Cover Page ...............................................................Cover Page
Item 2. Synopsis .................................................................Transaction and
Operating Expense
Tables
Item 3. Condensed Financial Information...........................................Financial Highlights
Item 4. General Description of Registrant.........................................Cover Page; Highlights;
Investment Objectives;
Investment Restrictions;
General Information
Item 5. Management of the Fund....................................................Cover Page; Management;
General Information;
Back Cover
Item 5A. Management Discussions
of Fund Performance ......................................................Disclosure in Annual
and Semi-Annual Reports
Item 6. Capital Stock and Other Securities........................................Cover Page;
Distributions; Taxes;
Description of Shares;
General Information;
Opening an Account and
Purchasing Shares;
Selling Shares
Item 7. Purchase of Securities Being Offered......................................Valuation of Shares;
Opening an Account and
Purchasing Shares;
Exchanging Shares
Item 8. Redemption or Repurchase .................................................Selling Shares;
Redeeming Shares
Item 9. Pending Legal Proceedings.................................................*
PART A - Equity Index Fund
Item 1. Cover Page ...............................................................Cover Page
Item 2. Synopsis .................................................................Transaction and
Operating Expense
Tables
Item 3. Condensed Financial Information...........................................Financial Highlights
Item 4. General Description of Registrant.........................................Cover Page; Highlights;
Investment Objectives;
Investment Restrictions;
General Information
Item 5. Management of the Fund....................................................Cover Page; Management;
General Information;
Back Cover
Item 5A. Management Discussions
of Fund Performance ......................................................Disclosure in Annual
and Semi-Annual Reports
<PAGE>
Item 6. Capital Stock and Other Securities........................................Cover Page;
Distributions; Taxes;
Description of Shares;
General Information;
Opening an Account and
Purchasing Shares;
Selling Shares
Item 7. Purchase of Securities Being Offered......................................Valuation of Shares;
Opening an Account and
Purchasing Shares;
Exchanging Shares
Item 8. Redemption or Repurchase .................................................Selling Shares;
Redeeming Shares
Item 9. Pending Legal Proceedings.................................................*
PART A - Elite Money Market Funds: Elite Cash Reserve (formerly Fiduciary
Reserve), Elite Government Reserve, Elite Treasury Reserve (formerly Fiduciary
Treasury Reserve) and Elite Tax Free Reserve (formerly Fiduciary Tax-Free
Reserve) Portfolios
Item 1. Cover Page ...............................................................Cover Page
Item 2. Synopsis .................................................................Transaction and
Operating Expense
Tables
Item 3. Condensed Financial Information...........................................Financial Highlights
Item 4. General Description of Registrant.........................................Cover Page; Highlights;
Investment Objectives;
Investment Restrictions;
General Information
Item 5. Management of the Fund....................................................Cover Page; Management;
General Information;
Back Cover
Item 5A. Management Discussions
of Fund Performance ......................................................Disclosure In Annual and
Semi-Annual Reports
Item 6. Capital Stock and Other Securities........................................Cover Page;
Distributions; Taxes;
Description of Shares;
General Information;
Opening an Account and
Purchasing Shares;
Selling Shares
Item 7. Purchase of Securities Being Offered......................................Valuation of Shares;
Opening an Account and
Purchasing Shares;
Exchanging Shares
Item 8. Redemption or Repurchase .................................................Selling Shares;
Redeeming Shares
Item 9. Pending Legal Proceedings.................................................*
Part B
Item 10. Cover Page...................................................Cover Page
Item 11. Table of Contents............................................Table of Contents
Item 12. General Information and History..............................The Fund
Item 13. Investment Objectives and
Policies.....................................................Investment
Objective and
Policies
<PAGE>
Item 14. Management of the Registrant.................................Directors
and Officers; the
Investment Adviser,
Manager and Distributor
Item 15. Control Persons and Principal
Holders of Securities........................................Principal Holders of
Securities
Item 16. Investment Advisory and Other
Services.....................................................The Investment Adviser,
Administrator and
Distributor
Item 17. Brokerage Allocation and Other
Practices....................................................Portfolio Transactions
Item 18. Capital Stock and Other
Securities...................................................Description of Shares
Item 19. Purchase, Redemption and Pricing
of Securities Being Offered..................................Included in Part A
Item 20. Tax Status...................................................Included in Part A
Item 21. Underwriters.................................................*
Item 22. Calculation of Performance Data..............................Yield
Item 23. Financial Statements.........................................Financial Statements
</TABLE>
Part C
Information required to be included in Part C is set forth under the
appropriate item, so numbered, in Part C of this Registration
Statement.
- -------------
* Omitted since the answer is negative or the Item is inapplicable.
<PAGE>
The prospectus for the CoreFund Institutional Shares, included as part of
Post-Effective Amendment No. 26 to the Registration Statement on Form N-1A of
CoreFunds, Inc. (File No. 2-93214) filed with the Securities and Exchange
Commission on April 19, 1996 is hereby incorporated by reference as if set forth
herein.
The prospectus for the CoreFund Individual Shares, included as part of
Post-Effective Amendment No. 26 to the Registration Statement on Form N-1A of
CoreFunds, Inc. (File No. 2-93214) filed with the Securities and Exchange
Commission on April 19, 1996 is hereby incorporated by reference as if set forth
herein.
The prospectus for the CoreFund Elite Money Market Funds, included as part of
Post-Effective Amendment No. 27 to the Registration Statement on Form N-1A of
CoreFunds, Inc. (File No. 2-93214) filed with the Securities and Exchange
Commission on May 14, 1996 is hereby incorporated by reference as if set forth
herein.
The Statement of Additional Information for CoreFunds, Inc., included as part of
Post-Effective Amendment No. 27 to the Registration Statement on Form N-1A of
CoreFunds, Inc. (File No. 2-93214) filed with the Securities and Exchange
Commission on May 14, 1996 is hereby incorporated by reference as if set forth
herein.
<PAGE>
COREFUND(R)
EQUITY INDEX FUND
PROSPECTUS
COREFUNDS, INC.
AUGUST 21, 1996
===============================================================================
CoreFunds, Inc. (the "Company") is an open-end management investment
company presently offering shares in twenty diversified and non-diversified
portfolios that offer a variety of investment opportunities. These portfolios
are managed by CoreStates Investment Advisers, Inc. ("CoreStates Advisers").
CoreFund Equity Index Fund (the "Fund") is a portfolio offered by the Company.
The Fund's investment objective is to provide its shareholders with investment
results that achieve price and yield performance similar to the S&P 500 Index,
thereby tracking with reasonable accuracy the performance of the stock market as
a whole. This Prospectus relates solely to shares in the Fund.
- -------------------------------------------------------------------------------
This Prospectus gives you information about the Funds that you should
be aware of before investing. Additional information about the Funds,
contained in a Statement of Additional Information dated August 12, 1996, has
been filed with the Securities and Exchange Commission. It is incorporated
in this Prospectus by reference. To obtain a copy without charge, call or
write:
CoreFunds, Inc.
680 East Swedesford Road
Wayne, PA 19087
1-800-355-CORE
KEEP THIS PROSPECTUS FOR FUTURE REFERENCE.
- -------------------------------------------------------------------------------
SHARES IN THE FUNDS ARE NOT OBLIGATIONS, DEPOSITS, OR ACCOUNTS OF, OR
GUARANTEED OR ENDORSED BY, CORESTATES BANK, N.A., THE PARENT CORPORATION OF EACH
FUND'S INVESTMENT ADVISER. SUCH SHARES ARE ALSO NOT FEDERALLY INSURED BY THE
FEDERAL DEPOSIT INSURANCE CORPORATION, THE FEDERAL RESERVE BOARD OR ANY OTHER
AGENCY.
- -------------------------------------------------------------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION, NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED
UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
===============================================================================
<PAGE>
- --------------------------------------------------------------------------------
TABLE OF CONTENTS /X/ COREFUND
<TABLE>
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Transaction and Operating Expense Table.................3 Financial Highlights.................................... 4
Highlights.............................................. 5
</TABLE>
_____________________ FUNDAMENTALS OF MUTUAL FUND INVESTING ____________________
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Types of investment vehicles............................. 7
How to invest in stocks, bonds, and money market
instruments............................................ 9
Developing your investment strategy...................... 14
</TABLE>
===============================================================================
INFORMATION ON THE FUND
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Investment Objective of the Fund...................... 18 Valuation of Shares.................................... 24
Investment Policies................................... 18 Net Asset Value...................................... 24
Other Investment Practices of the Portfolio Pricing.................................... 25
Fund................................................ 20 Management............................................. 25
Investment Restrictions............................... 21 Investment Adviser, Sub-Advisers..................... 25
Investor Considerations............................... 22 Administrator........................................ 26
Investment Suitability.............................. 22 Distributor.......................................... 26
Investment Risks.................................... 22 Performance Information................................ 27
Distributions......................................... 23 How to Purchase and Redeem Shares...................... 27
Taxes................................................. 23 Description of Shares.................................. 31
General Information.................................... 32
</TABLE>
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No person is authorized by CoreFunds, Inc. to give any
information or make any representation other than those
contained in this Prospectus or in other printed or written
- ---- material issued by CoreFunds, Inc., and you should not rely
2 Table of Contents on any other information or representation.
</TABLE>
<PAGE>
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TRANSACTION AND OPERATING EXPENSE TABLE /X/ COREFUND
The purpose of the following table is to help you understand the various costs
and expenses that you, as a shareholder, will bear directly or indirectly in
connection with an investment in shares of the Fund.
THE INFORMATION CONTAINED IN THE TABLE SHOULD NOT BE CONSIDERED A
REPRESENTATION OF FUTURE EXPENSES. ACTUAL EXPENSES MAY BE MORE OR LESS THAN
THOSE SHOWN.
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CLASS Y SHARES
SHAREHOLDER TRANSACTION EXPENSES
Maximum Sales Load Imposed on Purchases..................................................................... none
Maximum Sales Load Imposed on Reinvested Dividends.......................................................... none
Deferred Sales Load......................................................................................... none
Redemption Fee.............................................................................................. none
Exchange Fee................................................................................................ none
ANNUAL FUND OPERATING EXPENSES
(as a percentage of net assets):
Investment Advisory Fees After Fee Waivers(1)............................................................... .12%
12b-1 Fees.................................................................................................. none
Administrative Fees After Fee Waivers(2).................................................................... .16%
Other Expenses(3)........................................................................................... .09%
Net Annual Fund Operating Expenses(4)....................................................................... .37%
EXAMPLE
You would pay the following 1 year $ 4
expenses on a $1,000 investment, 3 years 12
assuming (1) a 5% annual return 5 years 21
and (2) redemption at the end 10 years 47
of each time period.5
</TABLE>
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1 Absent voluntary waivers, the Adviser's investment advisory fee is calculated
at the annual rate of .40% of the average net assets of the Fund.
2 Absent voluntary waivers, the Administrator's fee is calculated at the annual
rate of .25% of the Fund's average net assets.
3 Includes (among others) legal, auditing, and printing fees.
4 The Adviser and the Administrator have voluntarily waived a portion of their
fees in order to assist the Fund in maintaining a competitive expense ratio.
The expense ratios noted herein are net of investment advisory and
administrative fee waivers expected to be in effect during the fiscal period
ending June 30, 1996. Absent any fee waivers, such expense ratio would have
been 0.74%. The service providers for the Fund have been voluntarily waiving a
portion of their fees since inception. However, during this year, these
providers may change this waiver so that the Fund's expense ratio will
approach the contractually mandated ratio.
5 Absent the voluntary fee waiver of the Adviser and the Administrator, the
amounts in this Example, for one year, three years, five years and ten years
would be $8, $24, $41 and $92 respectively.
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CLASS A SHARES
SHAREHOLDER TRANSACTION EXPENSES
Maximum Sales Load Imposed on Purchases..................................................................... 3.25%
Maximum Sales Load Imposed on Reinvested Dividends.......................................................... none
Deferred Sales Load......................................................................................... none
Redemption Fee.............................................................................................. none
Exchange Fee................................................................................................ none
ANNUAL FUND OPERATING EXPENSES
(as a percentage of net assets):
Investment Advisory Fees After Fee Waivers(1)............................................................... .12%
12b-1 Fees(2)............................................................................................... 0
Administrative Fees After Fee Waivers(3).................................................................... .16%
Other Expenses(4)........................................................................................... .09%
Net Annual Fund Operating Expenses(5)....................................................................... .37%
EXAMPLE
You would pay the following 1 year $36
expenses on a $1,000 investment, 3 years 44
assuming (1) a 5% annual return 5 years 53
and (2) redemption at the end 10 years 78
of each time period.6
</TABLE>
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1 Absent voluntary waivers, the Adviser's investment advisory fee is calculated
at the annual rate of .40% of the average net assets of the Fund.
2 Absent voluntary waivers, the Distributor's 12b-1 fee is calculated at the
annual ratio of .25% of the average net assets of the Fund.
3 Absent voluntary waivers, the Administrator's fee is calculated at the annual
rate of .25% of the Fund's average net assets.
4 Includes (among others) legal, auditing, and printing fees.
5 The Adviser, Administrator and the Distributor intend to waive a portion of
their fees in order to assist the Fund in maintaining a competitive expense
ratio. The expense ratios noted herein are net of investment advisory and
administrative fee waivers expected to be in effect during the fiscal period
ending June 30, 1996. Absent any fee waivers, such expense ratio would have
been 0.99%. The service providers for the Fund have been voluntarily waiving a
portion of their fees since inception. However, during this year, these
providers may change this waiver so that the Fund's expense ratio will
approach the contractually mandated ratio.
6 Absent the voluntary fee waiver of the Adviser and the Administrator, the
amounts in this Example, for one year, three years, five years and ten years
would be $42, $63, $85 and $150 respectively.
Transaction and Operating Expense Table 3
<PAGE>
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS /X/ COREFUND
The table that follows presents information about the investment results of
Class Y Shares of the Fund. Class A Shares have not yet commenced operations.
The financial highlights for each of the periods presented have been audited by
Ernst & Young LLP, independent certified public accountants, whose report
thereon appears in CoreFunds' annual report which accompanies the Statement of
Additional Information.
FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD ENDED JUNE 30,
<TABLE>
<CAPTION>
- ---------------
EQUITY INDEX
- ---------------
Realized
and Net
Unrealized Assets,
Net Asset Net Gains Distribution Distribution End of Ratio of
Value, Net or (Losses) from Net from Net Asset Period Expenses to
Beginning Investment on Investment Capital Value End Total (000 Average Net
of Period Income Securities Income Gains of Period Return omitted) Assets
----------- ----------- ----------- ----------- ----------- ----------- --------- --------- -------------
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CLASS Y
1995*
(unaudited) $ 23.79 $ 0.26 $ 3.12 $ (0.26) $ (0.79) $ 26.12 14.27%+ $137,350 0.37%
1995 20.54 0.52 4.24 (0.52) (0.99) 23.79 24.45 112,553 0.37
1994 20.97 0.55 (0.43) (0.55) -- 20.54 0.55 72,552 0.35
1993 19.22 0.52 1.84 (0.52) (0.09) 20.97 12.39 50,551 0.49
1992 18.46 0.52 1.80 (0.48) (1.08) 19.22 12.59 20,166 0.57
1991(1) 19.48 0.03 (0.94) (0.02) (0.09) 18.46 (4.64)+ 12,117 0.97
<CAPTION>
- ---------------
EQUITY INDEX
- ---------------
Ratio of Ratio of
Expenses to Net Income
Ratio of Net Average Net to Average
Income to Assets Net Assets Portfolio
Average Net (Excluding (Excluding Turnover
Assets Waivers) Waivers) Rate
------------- ------------- ----------- -----------
<S> <C> <C> <C> <C>
CLASS Y
1995*
(unaudited) 2.02% 0.76% 1.63% 11%
1995 2.48 0.76 2.09 27
1994 2.63 0.75 2.23 13
1993 2.82 0.88 2.43 4
1992 2.66 1.06 2.17 27
1991(1) 1.79 1.20 1.56 --
</TABLE>
- --------------------------------------------------------------------------------
+ Returns are for the period indicated and have not been annualized.
* Ratios for the six-month period ended December 31, 1995, have been annualized.
(1) Equity Index commenced operations on June 1, 1991. All ratios for the period
have been annualized.
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4 Financial Highlights
</TABLE>
<PAGE>
- --------------------------------------------------------------------------------
HIGHLIGHTS /X/ COREFUND
<TABLE>
<S> <C>
COREFUNDS CoreFunds, Inc. ('CoreFunds') is an open-end management investment company presently offering shares
in twenty diversified and non-diversified portfolios. This Prospectus offers both Class Y Shares and
Class A Shares in the Equity Index Fund. Class Y Shares are primarily offered to various types of
institutional investors, which may include CoreStates Bank and its affiliate and corresponding banks,
for the investment of their own funds or for funds for which they serve in a fiduciary, agency or
custodial capacity. Class Y Shares are not subject to a sales load or 12b-1 charges. Class A Shares
are primarily offered to the general public as well as various types of institutional investors,
which may include CoreStates Bank and its affiliate and corresponding banks, for the investment of
their own funds or for funds for which they serve in a fiduciary, agency or custodial capacity.
Investors may also include shareholders of other investment companies which are advised by a Fund's
adviser or sub- adviser, and whose assets a Fund acquires in a tax-free reorganization, who propose
to become shareholders of the Fund as a result of such reorganization. Investors purchasing Class A
Shares will normally be those who desire certain additional shareholder services from certain
security broker/dealers and financial institutions which have entered into shareholder servicing
agreements with the Funds' distributor. Materials relating to the other Class Y Shares and other
Class A and C Shares of the Funds may be obtained by calling 1-800-355-CORE or by writing to
CoreFunds, Inc., 680 E. Swedesford Road, Wayne PA 19087.
- -------------------------------------------------------------------------------------------------------------------------------
FUNDAMENTALS OF MUTUAL This section will assist you in appreciating investments generally. It describes the three basic
FUND INVESTING types of investments--stocks, bonds, and money market investments--as well as mutual funds which
employ one or more of these instruments. The various types of mutual funds available and the
advantages of mutual fund investing are also discussed.
PAGE 7
- -------------------------------------------------------------------------------------------------------------------------------
RISK CHARACTERISTICS Investment in the Fund involves a number of risks, including possible loss of principal. Certain risk
factors applicable to the Fund are described below.
The Equity Index Fund is subject to market risk and fund risk. Market risk is the possibility that
stock prices in general will decline over short or even extended periods of time. Stock markets tend
to be cyclical, with periods when stock prices generally rise and periods when stock prices generally
decline. Fund risk is the possibility that a Fund's performance during a specific period may not meet
or exceed that of the stock market as a whole. Therefore, investors should consider their holdings in
the Equity Index Fund to be a long-term investment.
PAGE 22
- -------------------------------------------------------------------------------------------------------------------------------
</TABLE>
Highlights 5
<PAGE>
- --------------------------------------------------------------------------------
HIGHLIGHTS (CONTINUED) /X/ COREFUND
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INVESTMENT CoreStates Investment Advisers, Inc. ('CoreStates Advisers') serves as the investment adviser for
ADVISER the Fund. CoreStates Advisers has extensive experience in the management of money market, tax-free,
fixed income, equity, and international investments. It currently manages discretionary and non-
discretionary client security portfolios with a total aggregate market value exceeding $16 billion,
for individuals, corporations, institutions and municipalities.
PAGE 25
- ------------------------------------------------------------------------------------------------------------------------------
DIVIDEND Shareholders of the Fund are entitled to dividends and distributions arising from the net investment
POLICY income and capital gains, if any, earned on investments held by the Fund.
PAGE 23
- ------------------------------------------------------------------------------------------------------------------------------
TAXES The sale or redemption of shares of a mutual fund is a taxable event to the selling or redeeming
shareholder. In addition, any receipt of dividends which represent capital gain distributions will
be subject to federal and state income taxes. However, receipt of other dividends will generally not
be subject to federal income taxes. Ordinary dividends also will be subject to state income taxes.
PAGE 23
- ------------------------------------------------------------------------------------------------------------------------------
PURCHASING Purchases of Class Y and Class A Shares may be made by mail, wire or exchange from another account
SHARES or Fund. The minimum initial investment for institutional investors in Class Y Shares is $1,000,000
which amount may be waived at the discretion of the Distributor. There is no minimum for subsequent
investments and no minimum initial investment for automatic investment plans.
The minimum initial investment for investors in Class A Shares is $500, which amount may be waived
at the discretion of the Distributor. There is no minimum for subsequent investments and no minimum
investment for automatic investment plans. Class A Shares impose a maximum sales charge of 3.25%
deducted from the purchase or offering price at the time of purchase for those purchases of less
than $100,000 declining to 0% for amounts of $1 million or more.
PAGE 27
- ------------------------------------------------------------------------------------------------------------------------------
SELLING With respect to shares held by institutional investors on behalf of their customer accounts, all or
SHARES part of the shares beneficially owned by a customer may be redeemed in accordance with instructions
and limitations pertaining to their account at the institution. The share price of the Fund is
expected to fluctuate and may at redemption be more or less than at the time of initial purchase,
resulting in a gain or loss.
PAGE 30
- ------------------------------------------------------------------------------------------------------------------------------
</TABLE>
6 Highlights
<PAGE>
- -------------------------------------------------------------------------------
FUNDAMENTALS OF MUTUAL FUND INVESTING /X/ COREFUND
AN INTRODUCTORY GUIDE FOR INVESTORS
This section is devoted to those who are unfamiliar or uncomfortable with the
concepts of mutual fund investing, as well as those who are interested in
developing a coordinated strategy which can help them reach their financial
goals.
It describes the three basic types of investment vehicles -- stocks, bonds,
and money market instruments -- as well as mutual funds which employ one or more
of these investments.
Of course, no guide alone can help you determine how or when to invest.
That's why we recommend that you work closely with an investment representative
to develop a solid program which is designed specifically for your goals and
risk tolerance.
- -------------------------------------------------------------------------------
PART I:
TYPES OF INVESTMENT VEHICLES
FOR DETAILS ON HOW EACH OF THESE INSTRUMENTS IS USED IN MUTUAL FUNDS, PLEASE
SEE THE SECTION ENTITLED, "WHAT TYPES OF MUTUAL FUNDS ARE AVAILABLE?"
The three most popular types of investments are stocks, bonds, and money
market instruments. The following is an introduction to what they are and how
they work.
WHAT IS A STOCK?
Also known as equities, stocks represent an ownership position in a business
entity, such as a company or corporation. Each share of stock represents a
proportionate "share" of ownership in the business entity. As a result,
stocks offer individual investors the opportunity to take part in the
economic future of business.
Stocks are bought and sold on the open market, through a variety of stock
exchanges in the U.S. and around the world. This system allows any individual to
purchase and sell shares through stock brokers, who are licensed to participate
in the exchange.
The price for a share of stock is established by an "auction" system, in
which the broker for the buyer negotiates with the broker for the seller.
When the demand for a stock is low, its price will most likely fall; when
demand is high, the stock's price will most likely rise.
Because each share of stock represents a share in the company's earnings,
one of the most common factors affecting the price of the stock is the
direction of the company's earnings. In theory, the more a company earns, or
is expected to earn, the higher the price of its shares.
However, a number of other factors can cause a stock's price to go up or
down, including events which will positively or negatively affect the company's
future, changes in the overall economy, changes in the mood of the market, and
the market's perceptions of the company or its stock.
ALSO SEE: "EQUITY MUTUAL FUNDS" AND "WHAT ARE BALANCED FUNDS?"
Fundamentals 7
<PAGE>
- -------------------------------------------------------------------------------
FUNDAMENTALS OF MUTUAL FUND INVESTING (continued)
FOR DEFINITIONS OF INVESTMENT TERMS, PLEASE SEE THE
GLOSSARY FOLLOWING THIS SECTION.
WHAT IS A BOND?
When a corporation, government or government agency needs money for a
certain project, it often borrows money by issuing bonds to investors. So, in
the simplest terms, a bond is an IOU. The investor who purchases a bond is
acting as the lender.
Rather than offering an ownership share in business, as stocks do,
bonds are simply an agreement to repay the investor the amount loaned, also
known as principal, on a certain date. In addition, the issuer commits to
making periodic fixed interest payments to the lender until the loan is repaid.
When the bond is issued by a state or municipality, the interest paid to
investors is generally free of federal income taxes.
Like stocks, bonds are also traded in the open market. The value of a bond
can fluctuate due to changing market conditions. For example, when interest
rates in the market fall, the prices of bonds tend to rise. On the other hand,
when interest rates rise, the value of bonds falls.
Generally, the longer the maturity of a bond, the higher its yield and the
greater its price volatility. The shorter the maturity, the lower the yield and
the greater its price stability.
ALSO SEE: "FIXED INCOME MUTUAL FUNDS"
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------
Price of the
same bond if
Price of a 7% the yield
coupon bond increases to 8%
Years to now trading to to keep pace with Percent change
maturity yield 7% rising interest rates in price
- -------------------------------------------------------------------------------
<S> <C> <C> <C>
1 year $100.00 $99.06 -0.94%
3 years 100.00 97.38 -2.62%
10 years 100.00 93.20 -6.80%
30 years 100.00 88.69 -11.31%
- -------------------------------------------------------------------------------
</TABLE>
DURING TIMES WHEN OVERALL INTEREST RATES ARE FALLING, FIXED-INCOME INVESTORS
GENERALLY ENJOY HIGHER PRICES FOR THEIR BONDS. CONVERSELY, RISING INTEREST RATES
TEND TO REDUCE THE VALUE OF BONDS. LONGER MATURITY BONDS EXPERIENCE A GREATER
CHANGE IN PRICE, AS SHOWN ABOVE.
WHAT IS A MONEY MARKET INSTRUMENT?
Simply put, money market instruments are short-term bonds, with maturities
typically ranging from overnight to 13 months. They pay investors a rate of
interest which is generally lower than that of longer-term bonds.
Money market securities are issued by a number of sources, including the
U.S. Government, its agencies and large, reputable banks and corporations.
Money market instruments are generally quite stable, due to their short
maturities. Therefore, they are chosen by investors who wish to maintain the
safety of their investment.
ALSO SEE: "MONEY MARKET MUTUAL FUNDS"
8 Fundamentals
<PAGE>
- -------------------------------------------------------------------------------
/X/ COREFUND
PART II:
HOW TO INVEST IN STOCKS, BONDS, AND MONEY
MARKET INSTRUMENTS
Now that you've reviewed the basic types of investment vehicles available,
here's a discussion of how mutual funds can help you invest in stocks, bonds,
and money market securities.
WHAT IS A MUTUAL FUND?
Simply defined, a mutual fund pools the money of many investors and invests
it toward a specific goal, such as stability of principal, regular income, or
long-term growth. The fund's professional managers choose investments that,
in their judgment, will help the fund achieve its goal. As an investor, you
share in the fund's gains, losses, income, and expenses on a proportional
basis.
An equity fund pools its money to purchase stocks, a fixed-income fund
purchases bonds, and a money market fund purchases short-term debt instruments.
ADVANTAGES OF MUTUAL FUND INVESTING.
While many investors enjoy excellent results by purchasing individual stocks
or bonds, most investors find that mutual funds offer a more viable
alternative, for the following reasons:
PROFESSIONAL MANAGEMENT: With individual securities, you or your
broker must do the extensive research necessary to choose from among the
thousands of securities available. With mutual funds, you enjoy having a
professional money manager uncover opportunities and research them to make sure
the investment is appropriate for the needs of the fund.
LOW COSTS: With mutual funds, trading costs are modest because they are
shared by all investors in the fund.
DIVERSIFICATION: When investing, it's important to not put all your eggs in
one basket, so that you will be protected against an excessive loss in any one
investment. But only the wealthiest investors can afford to purchase the wide
range of individual securities to achieve true diversification. With mutual
funds, however, you can enjoy immediate diversification with even a very limited
amount of money, because investment risk is spread over many different
securities for greater stability and safety of your investment.
LIQUIDITY: With individual securities, it can sometimes be difficult to
redeem your investment due to market conditions and other factors. Mutual fund
shares, however, are easily redeemed at their current market value.
- -------------------------------------------------------------------------------
WHAT TYPES OF MUTUAL FUNDS ARE AVAILABLE?
The three basic categories of mutual funds are as follows:
EQUITY (STOCK) MUTUAL FUNDS A stock fund consists of selected
securities traded on the stock market. The fund changes in value as the prices
of the stocks in the fund change. Although these funds tend to rise or fall in
price more than other types of mutual funds, they have traditionally rewarded
investors with higher returns over the long run.
Fundamentals 9
<PAGE>
- -------------------------------------------------------------------------------
FUNDAMENTALS OF MUTUAL FUND INVESTING (continued)
FIXED INCOME (BOND) MUTUAL FUNDS A fixed income fund is a mutual fund which
invests in a pool of bonds. Bonds generally pay a fixed rate of interest. While
fixed income mutual funds buy bonds, it's important to note that the income paid
by a bond fund will fluctuate as individual securities are added to or
subtracted from the pool.
In addition, fixed income funds are subject to changes in net asset value
due to changing market conditions. Like individual bonds, fixed income funds
will tend to increase in value during times of decreasing interest rates, and
will generally decrease in value when interest rates rise.
There are a wide range of fixed-income funds to choose from, each with its
own investment objectives. These objectives range from stability of principal,
to maximum yield, to tax-free income.
MONEY MARKET FUNDS Of the basic mutual fund categories, money market funds
are managed to maintain the greatest stability of principal. They are managed to
maintain a value of $1 per share.
Money market funds invest in short-term money market securities, such as
U.S. Treasury Bills, certificates of deposit from large banks, and commercial
paper. Because the interest rates paid on these securities fluctuate with market
conditions, the yield for money market funds will also change.
- -------------------------------------------------------------------------------
WHAT ARE TAX-FREE FUNDS?
Tax-free funds, which include both fixed income (bond) and money market
funds, invest in securities which are issued by state, county, and local
governments and their agencies. The proceeds from these securities are used
to finance a variety of public-works projects, such as the building of roads,
schools, and sewers.
Under current tax laws, the interest paid to investors in these securities
is generally exempt from Federal income taxes. Therefore, they are frequently
purchased by investors who wish to shelter their investment income from taxes.
However, Congress from time to time reviews this aspect of the tax code and may
at any time repeal the exemption on any or all of these securities. If this were
to occur, it would have a negative impact on any affected securities, as well as
the mutual funds in which they were held.
- -------------------------------------------------------------------------------
It's Easy to Compare Tax-Free and Taxable Yields:
Tax-Free Yield
-------------- = Taxable Yield
1 - Tax Rate
- -------------------------------------------------------------------------------
10 Fundamentals
<PAGE>
- -------------------------------------------------------------------------------
/X/ COREFUND
WHAT ARE BALANCED FUNDS?
In addition to the types of mutual funds already described, there are also
funds which blend investments in stock, bond, and money market securities.
These are commonly known as balanced funds.
The returns for balanced funds are typically greater than those of bond and
money market funds, but lower than those of pure stock funds. Investing in all
three types of securities means the value of your principal should fluctuate
less than it would in a stock or bond fund alone.
Typically, the fund's professional manager has the flexibility to change
the investment mix based on current economic conditions.
- --------------------------------------------------------------------------------
COMPARING THE PERFORMANCE OF STOCK, BOND, AND MONEY MARKET INVESTMENTS
In order to balance risks and rewards, it's helpful to see how stocks, bonds,
and money market investments have performed over time.
Mutual fund performance is stated in terms of total return. The
total return of a mutual fund or any other investment consists of the
combination of capital appreciation (or loss) and investment income.
Capital appreciation (or loss) is a change in the market value. Income is
made up of dividends earned on stocks, and interest paid on bonds or money
market investments. In general, stocks have the highest total return, because
over long periods of time they have achieved the greatest capital appreciation.
Bonds have provided the greatest income or interest, but because their
prices are more stable they have less potential than stocks for capital
appreciation. Therefore, they have a lower total return potential over time than
stocks.
Of course, past returns are no guarantee of future results. But historical
data tells a story which surprises many investors.
As the chart on the following page shows, for the forty-year period between
January 1956 and December 1995, stocks have averaged annual returns of 10.8%,
while long-term bonds have averaged 6.4%, intermediate-term bonds have averaged
7.0%, and money market instruments have averaged 5.7%. During this same period,
inflation averaged 4.5%. Therefore, bonds and money market investments actually
delivered very little growth in excess of inflation.
Stocks, on the other hand, averaged more than double the rate of inflation.
What about the price fluctuations? Well, it's true that stocks do fluctuate --
and probably always will. But as the accompanying chart shows, stocks have
consistently rewarded long-term investors.
Since money market funds are managed to have a constant $1 share price,
their total return consists only of the interest earned on their investments.
Fundamentals 11
<PAGE>
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FUNDAMENTALS OF MUTUAL FUND INVESTING (continued)
GROWTH OF $1,000 (HISTORICAL PERFORMANCE
OF STOCKS, BONDS AND CASH)
<TABLE>
Dollars in Thousands
<CAPTION>
Large Long-Term Intermediate-Term
Year Stock Govt Bonds Inflation TBill Govt Bonds
<S> <C> <C> <C> <C> <C>
1956 1.4 1.04 1.03 0.93 0.99
1957 1.25 1.07 1.06 1 1.07
1958 1.79 1.09 1.08 0.94 1.05
1959 2.01 1.12 1.1 0.92 1.05
1960 2.02 1.15 1.12 1.05 1.17
1961 2.56 1.18 1.12 1.06 1.19
1962 2.34 1.21 1.14 1.13 1.26
1963 2.87 1.25 1.16 1.14 1.28
1964 3.35 1.29 1.17 1.18 1.33
1965 3.77 1.34 1.19 1.19 1.35
1967 3.39 1.4 1.23 1.23 1.41
1968 4.2 1.46 1.27 1.12 1.42
1969 4.66 1.54 1.33 1.12 1.49
1970 4.27 1.64 1.41 1.06 1.48
1971 4.44 1.75 1.49 1.19 1.73
1972 5.07 1.82 1.54 1.35 1.88
1973 6.04 1.89 1.59 1.42 1.97
1974 5.15 2.02 1.73 1.41 2.07
1975 3.79 2.19 1.94 1.47 2.18
1976 5.19 2.31 2.08 1.6 2.35
1977 6.43 2.43 2.18 1.87 2.66
1978 5.97 2.56 2.32 1.86 2.69
1979 6.36 2.74 2.53 1.84 2.79
1980 7.53 3.02 2.87 1.82 2.9
1981 9.97 3.36 3.23 1.74 3.02
1982 9.48 3.86 3.51 1.78 3.3
1983 11.51 4.26 3.65 2.49 4.26
1984 14.1 4.64 3.79 2.51 4.58
1985 14.99 5.09 3.94 2.9 5.22
1986 19.82 5.48 4.09 3.8 6.28
1987 23.48 5.82 4.14 4.73 7.23
1988 24.7 6.14 4.32 4.6 7.44
1989 28.85 6.53 4.51 5.04 7.89
1990 37.94 7.08 4.72 5.96 8.94
1991 36.73 7.63 5 6.33 9.81
1992 47.93 8.06 5.16 7.55 11.33
1993 51.62 8.34 5.31 8.15 12.14
1994 56.78 8.58 5.45 9.64 13.51
1995 57.52 8.92 5.6 .89 12.81
1996 60.01 9.21 5.7 11.86 15.06
</TABLE>
THIS CHART SHOWS HOW THE MAJOR TYPES OF INVESTMENTS HAVE PERFORMED OVER THE
PAST 40 YEARS. MORE STABLE MONEY MARKET INVESTMENTS HAVE PRODUCED THE LOWEST
ANNUAL RETURNS, WHILE STOCKS HAVE PRODUCED THE GREATEST GROWTH EVEN THOUGH
THEIR VALUE FLUCTUATES MORE.
HISTORICAL ANNUALIZED RETURN
(JANUARY 1956-DECEMBER 1995)
<TABLE>
<S> <C>
Stocks 10.8 %
Long-Term Government Bonds 6.4
Intermediate-Term Government Bonds 7.0
Cash 5.7
Inflation 4.5
</TABLE>
ASSUMPTIONS FOR THE TABLE AND CHARTS SHOWN ON THIS PAGE: RETURNS BASED ON
HISTORICAL PERFORMANCE, WHICH IS NO GUARANTEE OF FUTURE RESULTS. STOCK RETURNS
REPRESENT TOTAL RETURN OF THE STANDARD & POOR'S 500 COMPOSITE STOCK PRICE
INDEX (THE "S&P 500 INDEX"). FIXED INCOME, OR BONDS, IS COMPOSED OF
INTERMEDIATE- AND LONG-TERM GOVERNMENT BONDS. CASH REPRESENTS 30-DAY TREASURY
BILLS. SOURCE: SEI FINANCIAL SERVICES COMPANY.
RANGE OF STOCK RATES OF RETURN FOR ONE-
AND FIVE-YEAR ROLLING PERIODS
(1956-1995)
Percent
Rolling Five-Year
Annual Returns Periods
95th Percentile 37.2% 17.9%
5th Percentile -10.9% 1.4%
MANY INDIVIDUALS ARE CONCERNED ABOUT THE RISKS ASSOCIATED WITH INVESTING IN
STOCKS. MANY DO NOT REALIZE, HOWEVER, THAT DESPITE THE FLUCTUATION OF ANNUAL
RETURNS, INVESTORS WHO HELD STOCKS FOR A FULL FIVE YEARS HISTORICALLY EARNED
A POSITIVE RETURN IN MORE THAN NINETY FIVE PERCENT OF THE CASES. BEST AND WORST
CASE SCENARIOS PRESENTED IN THIS ILLUSTRATION REPRESENT THE FIFTH AND
NINETY-FIFTH PERCENTILE OF THE HISTORICAL RETURN DISTRIBUTION. SOURCE: SEI
FINANCIAL SERVICES COMPANY.
12 Fundamentals
<PAGE>
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/X/ COREFUND
WHAT ARE INTERNATIONAL FUNDS?
International funds invest primarily in stock, bond and money market
securities issued by corporations, governments and banks worldwide.
International equity funds invest in the equity (stock) securities
of companies based outside the United States. Today, international markets
account for over 62% of the world's equity capitalization, as measured by the
Morgan Stanley World Index in February, 1996. This indicates that many
investment opportunities now exist globally. Likewise, international bond
funds may invest in government and corporate debt obligations from around the
world with the aim of providing income and the potential for capital
appreciation. Investing in international equity (stock) and fixed income (bond)
funds provides investors with a way to participate in a diversified
portfolio of many international securities of many countries.
GROWTH OF $1,000
(PERFORMANCE OF INTERNATIONAL AND DOMESTIC STOCKS)
<TABLE>
Dollars in Thousands
<CAPTION>
Year MSCI EAFE S&P 500
<S> <C> <C>
1976 1.4223 1.6985
1977 1.6986 1.5762
1978 2.2812 1.6803
1979 2.4222 1.9894
1980 3.014 2.634
1981 2.9829 2.505
1982 2.9573 3.041
1983 3.6851 3.7252
1984 3.9749 3.9599
1985 6.2296 5.235
1986 10.586 6.2035
1987 13.226 6.5291
1988 17.007 7.6225
1989 18.843 10.024
1990 14.473 9.7028
1991 16.281 12.662
1992 14.352 13.637
1993 19.08 15.001
1994 20.618 15.196
1995 15.220 16.775
</TABLE>
GROWTH OF $1,000 IN INTERNATIONAL AND DOMESTIC STOCKS. MSCI EAFE (THE MORGAN
STANLEY CAPITAL INTERNATIONAL EUROPE AUSTRALIA AND FAR EAST INDEX) REPRESENTS
THE GROWTH OF AN INVESTMENT IN INTERNATIONAL STOCKS, AND THE S&P 500 INDEX
INDICATES AN INVESTMENT IN DOMESTIC STOCKS.
A COMPARISON OF FOREIGN GOV'T BOND
RETURN PERFORMANCE 1995
<TABLE>
Dollars in Thousands
<S> <C>
Japan 9.57%
U.K. 15.62%
Australia 14.94%
France 27.69%
Canada 23.45%
U.S. 18.30%
Germany 25.91%
</TABLE>
SOURCE: SEI FINANCIAL SERVICES COMPANY
Although investing internationally can reward investors (see graphs
above), there is an added dimension to the risks involved in investing in
domestic securities. Currency fluctuations in the countries in which
international stock and bond securities are issued can negatively impact the
value of these securities, as well as the mutual funds in which they are
held.
Fundamentals 13
<PAGE>
- -------------------------------------------------------------------------------
FUNDAMENTALS OF MUTUAL FUND INVESTING (continued)
PART III:
DEVELOPING YOUR INVESTMENT STRATEGY
Now that you have a basic understanding of the investments available to you,
let's look at how these investments can be used to help you achieve your
goals.
Everyone, whatever their income level, has financial goals. Perhaps yours
include a comfortable retirement, education for your children or grandchildren,
a new home, or simply the accumulation of wealth.
Whatever your personal goals, the best way to achieve them is to take
control of your financial future. And one of the best ways to do that is
through a coordinated program of saving and investing.
Saving money provides the foundation for reaching your goals, while
investing builds on that foundation by using the money you save to make even
more money.
Mutual funds provide one of the most convenient and rewarding means of
saving and investing.
Mutual funds are particularly well-suited to long-term goals such as
education and retirement, because they offer a convenient way to invest
regularly in a diversified portfolio of securities.
Once you've decided to use mutual funds to help reach your goals, here are
some very simple steps to follow:
STEP 1:
SET WELL-DEFINED GOALS.
Whether you're investing for retirement, education, wealth accumulation, or
regular income, start by determining how much you will need to satisfy your
goals. When making this assessment, you may want to seek the guidance of an
investment professional. Also take into account the effects of inflation,
which historically has reduced purchasing power by an average of 4.4% per
year.
Short-term goals will require a greater initial investment and a more
conservative investment approach. Longer-term goals will require a smaller
initial investment and a more aggressive approach, including investments in
stock and bond funds which are expected to yield higher returns over the long
run.
Once you determine your primary and secondary goals, you'll then need to
calculate how soon you will need your money.
STEP 2:
ESTABLISH YOUR TIME HORIZON.
For each of your goals, determine how soon you will need the money you're
investing. If it's a shorter-term goal, such as a new home in a few years,
you'll want investments that offer fairly predictable results in a short time.
If it is a longer-term goal, such as education for young children, you can plan
for longer-term results. Accordingly, the type of investments you choose for
retirement will depend on whether your retirement is a few years away, or a few
decades.
14 Fundamentals
<PAGE>
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/X/ COREFUND
STEP 3:
UNDERSTAND THE REAL RISKS.
Most people think of an investment as "risky" or "safe" based only on how
much the value of their principal can fluctuate. But in the long run, there
is more to risk than whether your principal goes up or down. It's just as
important to consider the following risks:
THE RISK OF INFLATION. To achieve any real increase in your wealth, your
investment return must outstrip inflation, or you may end up actually losing
purchasing power in the long run. To beat inflation, consider investing some of
your money where values and return are not fixed, but grow with the economy.
Experience shows that stock-based investments such as equity mutual funds offer
this type of performance potential.
THE RISK OF NOT REACHING YOUR GOAL. Another potential risk that many
investors tend to overlook is the risk that an investment strategy will not
enable them to reach their goal. To properly assess this risk, you first need to
define your goals, and then strike a balance between the risk of principal
volatility and the risk of failing to reach your goals.
For example, statistics show that at age 70 you can expect to live another
20 years. To achieve the many years of comfortable retirement you want, you must
have the discipline to set aside enough money during your working years and
invest it wisely.
STEP 4:
DECIDE ON AN INVESTMENT MIX.
When you are selecting specific investments, choose those which offer the
greatest potential for reaching your short-term and long-term goals, and
which are within your risk tolerance.
Many investors find that they are most comfortable with a mix of
investments, including stocks, bonds, and money market funds. This approach
offers the advantage of not putting all your eggs in one basket, and also allows
you to enjoy the distinct advantages of each type of investment.
If you use this approach, known as "asset allocation", the key is deciding
how much to allocate to each type of investment. To make this decision easier,
you can select a balanced fund, which combines stock, bond, and money market
investments under the guidance of professional investment managers.
As this chart below suggests, bonds and money markets fluctuate less in the
short term, and there is less chance of experiencing a loss. History has shown,
however, that the longer you stay invested, the more stocks have provided a
higher return, with a decreasing potential for loss.
Fundamentals 15
<PAGE>
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FUNDAMENTALS OF MUTUAL FUND INVESTING (continued)
REDUCTION OF RISK
OVER TIME
<TABLE>
<S> <C> <C>
1 Year
Stocks 43.4 -26.5
Long-Term Bonds 40.36 -9.18
Intermediate-Term Bonds 29.1 -5.14
Cash 14.7 1.5
Inflation 13.3 0.4
5 Years
Stocks 20.4 -2.36
Long-Term Bonds 21.62 -2.14
Intermediate-Term Bonds 16.98 0.96
Cash 11.12 2.33
Inflation 10.06 1.24
10 Years
Stocks 17.59 1.24
Long-Term Bonds 15.56 1.13
Intermediate-Term Bonds 13.13 2.92
Cash 9.17 2.58
Inflation 8.67 1.57
20 Years
Stocks 14.58 6.53
Long-Term Bonds 10.45 1.94
Intermediate-Term Bonds 9.85 3.98
Cash 7.72 4
Inflation 6.36 3.37
</TABLE>
THE LONGER YOU HOLD ANY PARTICULAR ASSET CLASS (STOCKS, BONDS, MONEY MARKET
INSTRUMENTS), THE LESS THE VARIATION IN RETURN. WHILE STOCKS HAVE FLUCTUATED
IN VALUE MUCH MORE THAN OTHER INVESTMENTS, THEY HAVE ALSO DELIVERED HIGHER
RETURNS OVER THE LONG RUN. IN ADDITION, THE LONGER AN INVESTOR REMAINS
INVESTED IN STOCKS, THE LESS THE CHANCE THERE IS FOR A CAPITAL LOSS. THE
BEST- AND WORST-CASE SCENARIOS PRESENTED IN THIS ILLUSTRATION REPRESENT THE
ABSOLUTE HIGHEST AND LOWEST RETURNS FROM JANUARY 1956 TO 1995. SOURCE: BASED
ON HISTORICAL DATA ON THE S&P 500 INDEX, INTERMEDIATE- AND LONG-TERM
GOVERNMENT BONDS, AND 30-DAY TREASURY BILLS FOR ROLLING ONE-, FIVE-, 10-, AND
20-YEAR PERIODS BETWEEN 1956 AND 1995. PAST RESULTS DO NOT GUARANTEE FUTURE
PERFORMANCE.
STEP 5:
GET STARTED.
Don't make the mistake of waiting until tomorrow. With mutual funds, you
don't need a large investment to start your program. All it takes is a small
amount of money, and a strong desire to reach your goals.
For full details on how the principles of mutual fund investing can
work for you, please contact your investment representative.
STEP 6:
BE DISCIPLINED.
Once you have a good strategy, stay with it. Avoid sudden changes in reaction
to temporary market trends. Remember, you're interested in long-term
performance.
In mutual fund investing, particularly with equity funds, one of
the surest ways to maximize the value of your investment is through a regular
program of monthly contributions. By adding to your account each month,
you'll be purchasing shares during both "up" markets and "down" markets. This
technique, known as "dollar cost averaging", has been shown to yield optimum
results over the long run.
16 Fundamentals
<PAGE>
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/X/ COREFUND
GLOSSARY
OF KEY INVESTMENT TERMS
CAPITAL GAIN: The profit made from the sale of securities due to an increase in
share value.
CURRENT YIELD: The income paid annually on mutual fund shares, expressed as a
percentage of the current price per share.
DISTRIBUTION: Payment of capital gains to shareholders of a mutual fund. For tax
purposes, distributions are separate from interest income or dividends.
DOLLAR COST AVERAGING: Investing a fixed dollar amount at regular intervals
over a long period of time to reduce the average cost per share of a mutual
fund.
INCOME DIVIDENDS: Regular payments from mutual funds to their shareholders,
made up of dividends, interest, and short-term capital gains earned from the
fund's portfolio of securities. May be distributed annually, bi-annually,
quarterly, or monthly, with operating expenses deducted.
MATURITY: The date on which the issuer is scheduled to return the amount
borrowed to the lender, or investor.
MUNICIPAL BOND: A debt obligation issued by a city, state, or municipality.
Interest from these bonds is generally exempt from federal income tax.
NET ASSET VALUE: The dollar value of one share of a mutual fund. This value
is generally calculated at least once each day, and is the price at which the
fund will redeem its shares from investors.
PRINCIPAL, OR PAR VALUE: Also known as face value, this is the amount loaned
to the issuer of a bond.
PROSPECTUS: A booklet distributed by the issuer of a security or mutual fund,
in compliance with SEC regulations. A mutual fund prospectus must include the
fund's investment objectives, all expenses and fees including management and
sales fees, a description of shareholder services offered, and information on
how to buy shares.
REDEMPTION PRICE: Also known as "bid price", this is the price at which
mutual funds buy back their shares. It is usually the net asset price of the
fund.
TOTAL RETURN: The combined return of capital appreciation and income
(interest and dividends) that an investment earns. (See page 27).
Fundamentals 17
<PAGE>
- --------------------------------------------------------------------------------
INFORMATION ON THE FUNDS
/X/
INVESTMENT
OBJECTIVE
OF THE FUND
The objectives of the Fund are fundamental and may only be changed by the
affirmative vote of a majority of the outstanding shares of the Fund. You may
want to pursue more than one objective by investing in other portfolios offered
by CoreFunds.
As investment adviser of the Fund, CoreStates Advisers manages the Fund's
portfolio of investments in a manner which it believes will best accomplish the
Fund's stated objective. However, there can be no assurance that a Fund will
meet its objective.
EQUITY INDEX FUND The Equity Index Fund's investment objective is to provide its
shareholders with investment results that achieve price and yield performance
similar to the S&P 500 Index, thereby tracking with reasonable accuracy the
performance of the stock market as a whole.
/X/
INVESTMENT
POLICIES
The policies which the Fund follows to achieve its investment objective are
described below. These are non-fundamental policies which may be changed without
a shareholder vote.
The Fund intends, under normal market conditions, to hold at least 90% of
its total assets in equity securities that as a group reflect a composite of
those represented in the S&P 500 Index. To mirror and confine the holdings to
relatively large, well-known companies within the S&P 500 Index, CoreStates
Advisers utilizes a computer model that closely monitors industry weightings of
the S&P 500 Index. While common stocks represented in the S&P 500 Index are the
primary securities utilized to achieve Equity Index Fund's objective, CoreStates
Advisers may also invest in other types of securities, consistent with the
objective and policies described herein. Equity Index Fund is not sponsored by
nor affiliated with Standard & Poor's Corporation ('S&P').
The S&P 500 Index consists of 500 common stocks, most of which are listed
on the New York Stock Exchange. In choosing the 500 stocks which are included in
the S&P 500 Index, S&P considers market values and industry diversification.
Most of the stocks in the S&P 500 Index are issued by companies which are among
the largest, in terms of the aggregate market value of their outstanding stock,
measured by the market price per share multiplied by the number of shares
outstanding. Stocks that are not among the five hundred largest are included in
the S&P 500 Index for diversification purposes.
Traditional methods of mutual fund investment management typically involve
frequent changes in a portfolio of securities on the basis of economic,
financial, and market analyses. Index funds such as Equity Index Fund are not
managed in this manner, however. Instead, CoreStates Advisers only purchases and
sells securities with respect to the Fund in an attempt to duplicate the total
return of the S&P 500 Index, taking into account redemptions, sales of
additional Fund shares, and other adjustments as described below.
18 Investment Objective
<PAGE>
- --------------------------------------------------------------------------------
/X/ COREFUND
Consistent with its investment objective, Equity Index Fund's investment
portfolio will at any time consist of common stocks of as many issuers listed in
the S&P 500 Index as is feasible, consistent with the policies stated herein.
Accordingly, the Fund invests in both dividend-paying and non-dividend-paying
securities that are not included in the S&P 500 Index. While Equity Index Fund
may own about 350 names, the largest 50 companies within the S&P 500 Index
generally represent nearly 85% of the value of the S&P 500 Index, and the
largest 200 companies represent nearly 95%. The number of companies owned by the
Fund is determined in an effort to minimize the impact of transaction costs and
balance these costs with tracking error.
Generally, Equity Index Fund only trades securities to reflect changes in
the S&P 500 Index, to carry out appropriate rebalancing for diversification
purposes, or to more closely track the return of the S&P 500 Index. This Fund
invests in equity securities that, as a group, reflect the composite performance
of the S&P 500 Index based on a computer-based financial model that tracks the
performance of the various stocks in the S&P 500 Index. As the Fund grows in
total assets, its portfolio may eventually include all 500 stocks in the S&P 500
Index. This decision would be made by CoreStates Advisers, based on its
financial model.
Although CoreStates Advisers does not screen securities for investment by
this Fund by traditional methods of financial and market analyses, it monitors
the Fund's investments with a view toward removing stocks of companies which
exhibit extreme financial distress or which may impair for any reason the Fund's
ability to achieve its investment objective. Therefore, an investor
participating in the Fund bears the risk of such adverse market conditions. The
Fund expects that its return will match the S&P 500 Index, prior to the
deduction of brokerage and other transaction costs, other Fund expenses, and
tracking errors.
Common stocks purchased by the Fund are initially selected in accordance
with their market capitalizations. Market capitalization is calculated by
multiplying the market price of an issuer's stock by the number of outstanding
shares of its common stock. The issues selected for this Fund are then ranked
and weighted accordance to their respective market capitalizations. The weighted
market capitalization of each issuer selected is determined by dividing the
issuer's market capitalization by the total market capitalizations of all
issuers listed.
The industry sector diversification of the issuers selected for inclusion
in Equity Index Fund according to their weighted market capitalizations is then
compared with the industry sector diversification of the issuers of all common
stocks publicly traded in the United States.
CoreStates Advisers will include in the Fund certain 'balancing
securities,' which are common stocks of companies with smaller market
capitalizations which are added to complete the portfolio to provide broad
industry representation. As indicated, 'balancing securities' are issued by
issuers whose market capitalizations are such that they would not otherwise be
eligible for inclusion in the Fund, and replace the securities of issuers in
over-represented sectors in the Fund.
Investment Policies 19
<PAGE>
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INFORMATION ON THE FUNDS (CONTINUED)
OTHER INVESTMENT PRACTICES OF THE FUND _________________________________________
In addition to the investments described above, the Fund may engage in a number
of additional investment practices, as discussed below:
REPURCHASE AGREEMENTS
Under certain circumstances, the Fund may enter into repurchase agreements with
respect to portfolio securities. Under the terms of a repurchase agreement, the
Fund purchases securities ('collateral') from financial institutions such as
banks and broker-dealers ('seller') which are deemed to be creditworthy under
guidelines approved by the Fund's management, subject to the seller's agreement
to repurchase them at a mutually agreed-upon date and price. The repurchase
price generally equals the price paid by the Fund plus interest negotiated on
the basis of current short-term rates (which may be more or less than the rate
on the underlying portfolio securities). The seller under a repurchase agreement
is required to maintain the value of the collateral held pursuant to the
agreement at not less than 100% of the repurchase price, and securities subject
to repurchase agreements are held by CoreFunds' custodian in the Federal Reserve
book-entry system. Default by the seller could, however, expose a Fund to loss
in the event of adverse market action or delay in connection with the
disposition of the underlying securities. Repurchase agreements are considered
to be loans by a Fund under the Investment Company Act of 1940 (the 'Investment
Company Act').
REVERSE REPURCHASE AGREEMENTS
The Fund may borrow funds for temporary purposes by entering into reverse
repurchase agreements. Pursuant to such agreements, the Fund would sell
portfolio securities to financial institutions such as banks and broker-dealers,
and agree to repurchase them at a mutually agreed-upon date and price. The Fund
enters into reverse repurchase agreements only to avoid otherwise selling
securities during unfavorable market conditions to meet redemptions. At the time
the Fund enters into a reverse repurchase agreement, it places in a segregated
custodial account liquid assets such as U.S. Government securities or other
liquid high-grade debt securities having a value equal to the repurchase price
(including accrued interest), and will subsequently monitor the account to
ensure that such equivalent value is maintained. Reverse repurchase agreements
involve the risk that the market value of the securities sold by the Fund may
decline below the price at which it is obligated to repurchase the securities.
Reverse repurchase agreements are considered to be borrowings by the Fund under
the Investment Company Act.
OTHER INVESTMENT COMPANIES
The Fund may invest in the securities of other investment companies. Such shares
will be purchased by the Fund within the limits prescribed by the Investment
Company Act. Such investments will be limited to amounts not in excess of 5% of
a Fund's total assets at the time of purchase.
LENDING OF SECURITIES
The Fund may lend its portfolio securities to qualified brokers, dealers, banks,
and other financial institutions for the purpose of realizing additional net
investment income through the receipt of interest on the loan. The Fund may lend
portfolio securities with a value of up to 33 1/3% of its total assets. Such
loans may be terminated at any time. The Fund will receive cash, letters of
credit, government or government agency securities as collateral in an amount
equal to at least 100% of the current market value of the loaned securities plus
accrued interest. Cash
20 Investment Policies
<PAGE>
- --------------------------------------------------------------------------------
/X/ COREFUND
collateral received by the Fund will be invested in short-term debt securities.
The Fund will retain most rights of beneficial ownership including
dividends, interest or other distributions on the loaned securities. Voting
rights pass with the lending. The Fund will call loans to vote proxies if a
material issue affecting the investment is to be voted upon. Loans will be made
only to borrowers deemed by CoreStates Advisers to be of good standing.
Such loans would involve risk of delay in receiving additional collateral
in the event the value of the collateral decreased below the value of the
securities loaned, or risk of delay in recovering the securities loaned or even
loss of rights in the collateral should the borrower of the securities fail
financially.
TEMPORARY INVESTMENTS
On occasion, the Fund may be unable to achieve its investment objective due to
market conditions. Under such circumstances, the Fund is permitted to make
certain temporary investments which deviate from the investment policies
described above. Such investments may be used to invest uncommitted cash
balances, to maintain liquidity to meet shareholder redemptions, or to take a
temporary defensive position against potential or serious stock market declines.
Although the Fund normally seeks to remain fully invested in equity
securities, it may invest all or a portion of its assets temporarily in certain
short-term and fixed income vehicles, in accordance with the investment
restrictions described herein. Money market instruments, such as commercial
paper, and fixed income securities, such as bonds, musts be assigned, or
determined by the adviser to be equal to, certain minimum ratings in each
category by either Moody's or S&P at the time of purchase by the Fund. Temporary
investments may include money market instruments, U.S. government obligations,
fixed income securities and/or repurchase agreements.
/X/
INVESTMENT
RESTRICTIONS
Investment policies of the Fund that are not fundamental may be changed by the
Board of Directors without shareholder approval, provided such changes are
deemed to be consistent with the Fund's objective and in the best interests of
its shareholders. However, the investment objectives of each Fund, along with
the restrictions and limitations described herein and in the Statement of
Additional Information, are fundamental and may be changed only by the
affirmative vote of a majority of the outstanding shares of such Fund. See
'Description of Shares.'
THE FUND MAY NOT:
1. Make loans, except that the Fund may purchase or hold certain debt
instruments and enter into repurchase agreements, in accordance with its
policies and limitations.
2. Borrow money or issue senior securities, except that the Fund may
borrow from banks and enter into reverse repurchase agreements for temporary
purposes in amounts not to exceed 10% of the value of its total assets at the
time of such borrowing; or mortgage, pledge or hypothecate any assets, except in
connection with any such borrowing and in amounts not in excess of the lesser of
the dollar amounts borrowed or 10% of the value of its total assets at the time
of such borrowing. The Fund will not purchase any securities while its
borrowings (including
Investment Restrictions 21
<PAGE>
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INFORMATION ON THE FUNDS (CONTINUED)
reverse repurchase agreements) are outstanding.
3. Invest more than 10% of its total assets in illiquid securities,
including repurchase agreements maturing in more than seven days or the lending
of securities which provide for settlement more than seven days after notice.
4. Purchase securities of any one issuer (other than obligations issued or
guaranteed as to principal and interest by the U.S. Government, its agencies or
instrumentalities) if, immediately after such purchase, more than 5% of the
value of the Fund's total assets would be invested in such issuer and/or more
than 10% of the voting securities of such issue would be held by the Fund,
except that up to 25% of the value of the Fund's total assets may be invested
without regard to such 5% limitation.
5. Invest 25% or more of its total assets in any one industry. For
purposes of this limitation, wholly-owned finance companies will be considered
to be in the industries of their parents if their activities are primarily
related to financing the activities of their parents, and utilities will be
divided according to their services-for example, gas, gas transmission, electric
and gas, electric, and telephone will each be considered a separate industry.
PORTFOLIO TURNOVER It is not a policy of the Fund to purchase or sell securities
for trading purposes. However, the advisers manage the Fund without regard
generally to restrictions on portfolio turnover, except those imposed by
provisions of the federal tax laws regarding short-term trading. Generally, the
Fund will not trade for short-term profits, but when circumstances warrant,
investments may be sold without regard to the length of time held. It is
expected that the Fund's annual portfolio turnover rates will not exceed 100%. A
100% rate of turnover would occur, for example, if all of a portfolio's
securities are replaced within a one year period.
High rates of portfolio turnover necessarily result in correspondingly
heavier brokerage and portfolio trading costs which are paid by the Fund. In
addition to portfolio trading costs, higher rates of portfolio turnover may
result in the realization of capital gains. As a general rule, net gains are
distributed to shareholders and will be taxable at ordinary income tax rates,
for federal income tax purposes, regardless of long- or short-term capital gains
status. See 'Distributions' and 'Taxes' for more information on taxation. The
tables set forth in 'Financial Highlights' present the Funds' historical
portfolio turnover rates.
/X/
INVESTOR
CONSIDERATIONS
INVESTMENT SUITABILITY _________________________________________________________
The Fund is suitable for those who want to participate in the equity market's
superior long-term performance without the near-term commitment and risks
associated with choosing a particular investment style which may or may not be
out of favor during any period of time. Investors generally can expect returns
in line with the S&P 500 Index, which is tracked closely by the Fund.
INVESTMENT RISKS _______________________________________________________________
Different funds differ significantly in terms of risk. Because of the concerns
listed below, the Fund should not be considered a complete investment program.
Most investors should maintain diversified holdings of securities with different
risk characteristics--including common stocks, bonds and different types of
money market instruments. Investors may also wish to complement an investment
22 Investor Considerations
<PAGE>
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/X/ COREFUND
in the Fund with other portfolios offered by CoreFunds.
The Fund is subject to market risk and fund risk. Market risk is the
possibility that stock prices in general will decline over short or even
extended periods of time. Stock markets tend to be cyclical, with periods when
stock prices generally rise and periods when stock prices generally decline.
Fund risk is the possibility that a Fund's performance during a specific period
may not meet or exceed that of the stock market as a whole. Therefore, investors
should consider their holdings in equity mutual funds to be long-term
investments.
/X/
DISTRIBUTIONS
Shareholders of the Fund are entitled to dividends and distributions arising
from the net investment income and capital gains, if any, earned on investments
held by such Fund. Shares of the Fund begin earning dividends on the business
day on which the purchase order for the shares is executed and continue to earn
dividends through, and including, the day before the redemption order for such
shares is executed.
Dividends are paid in the form of additional shares of the Fund unless a
shareholder selects one of the following options on the Account Application
Form: Cash Dividend Option--to receive dividends in cash and capital gains
distributions in additional shares of the Fund at net asset value; All Cash
Option--to receive both dividends and capital gains distributions in cash. In
the absence of either of these selections on the Account Application Form, each
purchase of shares is made upon the condition and understanding that the Fund's
agent is automatically appointed to receive the dividends and distributions upon
all shares in the shareholder's account and to reinvest them in full and
fractional shares of the Fund at the net asset value in effect at the close of
business on the reinvestment date. Dividends and distributions are automatically
paid in cash (along with any redemption proceeds) not later than seven business
days after a shareholder closes an account with the Fund.
The net investment income of this Fund is declared and paid to
shareholders on a quarterly basis. Distributions of any capital gains will be
made by the Fund at least annually.
If any capital gains are realized from the sale of underlying securities,
the Fund normally distributes such gains with the last dividend for the calendar
year.
/X/
TAXES
The following is only a brief summary of some of the important federal income
tax considerations generally affecting the Fund and its shareholders. No attempt
has been made to present a detailed explanation of the federal, state or local
income tax treatment of the Fund or its shareholders, and this discussion is not
intended as a substitute for careful tax planning. Potential investors in the
Fund are urged to consult their tax advisers with specific reference to their
own tax situations. The following summary is based on current tax laws and
regulations which may be changed by legislative, judicial or administrative
action.
The Fund is treated as a separate entity for federal income tax purposes
and is not combined with any of CoreFunds' other portfolios. The Fund intends
to qualify for the favorable tax treatment afforded a 'regulated investment
company' under the Code. This requires, among other things,
Taxes 23
<PAGE>
- --------------------------------------------------------------------------------
INFORMATION ON THE FUNDS (CONTINUED)
that a fund distribute to its shareholders at least 90% of its net investment
income. Provided a fund meets this 90% distribution and certain other
requirements, it will be relieved of federal income tax on that part of its net
investment income and any net capital gains (the excess of net long-term capital
gain over net short-term capital loss) distributed to shareholders.
Whether paid in cash or in additional shares, dividends attributable to
the Fund's net investment income (including ordinary income and net short-term
capital gains, if any) will be taxable to shareholders as ordinary income.
Capital gains distributions of the Fund will be taxable as long-term capital
gain, regardless of how long a shareholder has held shares.
Dividends declared by the Fund in October, November, or December of any
year and payable to shareholders of record on a date in such a month will be
deemed to have been paid by the Fund and received by the shareholders on
December 31 of that year, if paid by the Fund during the following January.
BACK-UP WITHHOLDING
Generally, the Fund is required to withhold 31% of ordinary income dividends,
capital gains distributions, and redemptions paid to shareholders who have not
complied with IRS taxpayer identification regulations and in certain other
circumstances. Shareholders who are not otherwise subject to back-up withholding
may avoid this withholding requirement by certifying on the Account Application
Form their proper Social Security or Taxpayer Identification Number and
certifying that they are not subject to back-up withholding.
IN GENERAL
The sale or redemption of shares of a mutual fund is a taxable event to the
selling or redeeming shareholder. Gains or losses (if any) may also be realized
from an ordinary redemption of shares, as described herein, or on a telephone
exchange among the CoreFunds portfolios.
In the opinion of counsel, shares of the Fund are exempt from current
Pennsylvania Personal Property Taxes.
Shareholders will be advised at least annually as to the federal income
tax status of distributions made during the year. See the Statement of
Additional Information for further information regarding taxes.
/X/
VALUATION OF SHARES
NET ASSET VALUE ________________________________________________________________
The shares of the Fund will fluctuate in value as a result of changes in the
value of its portfolio investments. Shares in the Fund will realize capital
gains or losses as portfolio investments are sold above or below cost.
The net asset value per share of the Fund for purposes of pricing purchase
and redemption orders is normally determined as of 4:00 p.m. (Eastern time) (the
'valuation time') on each business day of the Fund. A 'business day' of the Fund
is a day on which the New York Stock Exchange is open for trading, and any other
day (other than a day on which no shares of the Fund are tendered for redemption
and no order to purchase any shares is received) during which there is a
sufficient degree of trading in securities or instruments held by the Fund such
that the Fund's net asset value per share might be materially affected. Net
asset value per share is calculated by dividing the value of all of the Fund's
portfolio securities and other assets, less liabilities, by the number of
outstanding shares of the Fund at the time of the valuation. The result
(adjusted to the nearest cent) is the net asset value per share.
24 Valuation of Shares
<PAGE>
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/X/ COREFUND
PORTFOLIO PRICING ______________________________________________________________
Portfolio securities which are traded both over-the-counter and on a national
securities exchange are valued according to the broadest and most representative
market. When securities exchange valuations are used, the valuation will be the
latest sale price on such exchange on such business day or, if there is no such
reported sale, the current bid price. Other assets and securities for which no
quotations are readily available will be valued in a manner determined in good
faith by the Board of Directors to reflect their fair market value.
/X/
MANAGEMENT
The business and affairs of the Fund are managed under the direction of the
CoreFunds Board of Directors.
INVESTMENT ADVISER _____________________________________________________________
CoreStates Advisers has overall responsibility for portfolio management for the
Fund. CoreStates Advisers is a wholly-owned subsidiary of CoreStates Bank,
itself a wholly-owned subsidiary of CoreStates Corp. CoreStates Corp, based in
Philadelphia, Pennsylvania, is one of the 20 largest bank holding companies in
the United States, and leads the region in investing corporate cash. CoreStates
Corp currently has over $45 billion in assets and discretionary management over
$22 billion in customer accounts through a variety of banking activities at over
355 domestic and foreign locations.
CoreStates Advisers is an adviser registered under the Investment Advisers
Act of 1940. It performs most investment management and advisory functions for
the trust departments of CoreStates Corp's banking subsidiaries, related
investment advisory, research, trading, and fund management functions, and also
provides similar services to customers unrelated to CoreStates Corp. CoreStates
Advisers currently manages discretionary and nondiscretionary client security
portfolios with a total aggregate market value of over $16 billion, for
individuals, corporations, institutions, and municipalities. CoreStates Advisers
has extensive experience in the management of money market, tax-free, fixed
income, equity, and international investments. CoreStates Advisers has principal
offices at 1500 Market Street, P.O. Box 7558, Philadelphia, PA 19102.
As investment adviser, CoreStates Advisers manages the investment
portfolio of the Fund, makes decisions with respect to and places orders for all
purchases and sales of the Fund's portfolio securities, and maintains certain
records relating to such purchases and sales. CoreStates Advisers pays all
expenses incurred by it in connection with its investment advisory activities,
other than the cost of securities (including any brokerage commissions)
purchased for the Fund and the cost of obtaining market quotations for portfolio
securities held by the Fund.
ADVISORY FEES
For the services provided and expenses assumed as investment adviser of the
Fund, CoreStates Advisers is entitled to receive an annual fee from the Fund,
computed daily and paid monthly, at the annual rate of .40% of the average daily
net assets of Equity Index Fund. CoreStates Advisers may, from to time and at
its discretion, voluntarily waive all or a portion of its investment advisory
fees in order to assist the Fund in maintaining competitive expense ratios.
Management 25
<PAGE>
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INFORMATION ON THE FUNDS (CONTINUED)
FUND MANAGER
Lary Aasheim, C.F.A., a Vice President of CoreStates Advisers, is portfolio
manager of the Fund. In addition, he is a securities analyst with responsibility
for the technology and telecommunications equipment industries, paper, forest
products and building material industries. Prior to joining CoreStates Advisers
in 1990, Mr. Aasheim worked as an analyst at First Fidelity Bank/Fidelity Bank,
First Pennsylvania Bank and Bear Stearns in New York. He received his B.S.
degree in Economics from The Wharton School, University of Pennsylvania. He also
has earned his CFA from the Institute of Chartered Financial Analysts.
ADMINISTRATOR __________________________________________________________________
SEI Fund Resources ('SFR' or the 'Administrator'), with principal offices at 680
East Swedesford Road, Wayne, PA 19087, acts as the Fund's administrator. For its
administrative services, SFR is entitled to receive a fee from the Fund,
computed daily and paid monthly, at the annual rate of .25% of the Fund's
average daily net assets. As Administrator, SFR generally assists in the Funds'
administration and operations. State Street Bank and Trust Company located at
225 Franklin Street, Boston, MA 02110, serves as each Fund's transfer agent (the
'Transfer Agent') and dividend paying agent.
DISTRIBUTOR ____________________________________________________________________
SEI Financial Services Company ('SFS' or the 'Distributor'), with principal
offices at 680 East Swedesford Road, Wayne, PA 19087, serves as each Fund's
distributor pursuant to a Distribution Agreement which applies to Class Y and
Class A Shares. Class A Shares are also subject to a separate distribution plan
(the 'Distribution Plan') approved by the Board of Directors on April 13, 1992.
The Distribution Plan provides that CoreFunds will pay the Distributor an annual
fee, calculated on an average daily net basis and paid monthly, of up to .25% of
the average daily net assets of Class A Shares of each Fund. The Distributor may
use this fee as compensation for its distribution-related services or to
compensate Participating Broker/Dealers and Shareholder Servicing Agents for
performing distribution-related or shareholder services.
The services provided by Participating Broker/Dealers or Shareholder
Servicing Agents may include establishing and maintaining customer accounts and
records; aggregating and processing purchase and redemption requests from
customers and placing net purchase and redemption orders with the Distributor;
automatically investing customer account cash balances; providing periodic
statements to customers; arranging for bank wires; answering routine customer
inquiries concerning their investments; assisting customers in changing dividend
options, account designations and addresses; performing sub-accounting
functions; processing dividend payments on behalf of customers; forwarding
certain shareholder communications from the Fund to customers; and providing
other similar services.
Compensation received by persons selling Class A Shares will be different
than the compensation received by those persons selling Class Y Shares.
EXPENSES The Fund's expenses are accrued daily and are deducted from total
income before dividends are paid. Except as noted herein and in the Statement of
Additional Information, the Fund's service contractors bear all expenses
incurred in connection with the performance of their services on behalf of the
Fund. Similarly, the Fund bears the expenses incurred in their operations.
26 Management
<PAGE>
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/X/ COREFUND
GLASS-STEAGALL ACT CoreStates Corp and its banking subsidiaries are permitted to
perform the services contemplated by the investment advisory agreements with the
Fund and to engage in certain activities in connection with the investment of
their customer accounts in Shares of the Fund without violating the federal
banking law commonly referred to as the Glass-Steagall Act, or other applicable
banking laws or regulations. Future changes to any of these laws or regulations
or administrative or judicial interpretations of such laws or regulations,
however, could prevent or restrict CoreStates Corp (and its banking
subsidiaries) from performing such services. If CoreStates Advisers was thereby
prohibited from serving as investment adviser to the Fund, the Board of
Directors would promptly seek to retain another qualified investment adviser for
the Fund.
In addition, certain state securities laws may require banks and other
institutional investors purchasing shares on behalf of their customers in such
states to register as dealers pursuant to state law.
/X/
PERFORMANCE
INFORMATION
TOTAL RETURN AND YIELD _________________________________________________________
From time to time, in advertisements or reports to shareholders, the performance
of the Fund may be quoted and compared to that of other mutual funds with
similar investment objectives and to relevant indices.
The Fund may calculate its performance on a total return basis for various
periods. The total return basis combines principal changes, income dividends,
and capital gains distributions paid during the period. Principal changes are
based on the difference between the beginning and closing net asset values for
the period and assume reinvestment of income dividends and capital gains
distributions paid during the period. The Fund may calculate its performance for
periods since commencement of operations and for calendar or fiscal year periods
(including multiple years). See 'Total Return' in the Statement of Additional
Information.
The performance of any investment will generally reflect market
conditions, portfolio quality and maturity, type of investment, and operating
expenses. The Fund's performance will fluctuate and is not necessarily
representative of future results. The Fund's performance would be favorably
affected by any investment advisory fee waivers on the part of CoreStates
Advisers. Shareholders will receive unaudited semi-annual reports describing the
Funds' investment operations and annual financial statements audited by
independent auditors.
/X/
HOW TO
PURCHASE
AND REDEEM
SHARES
PURCHASE OF SHARES _____________________________________________________________
Shares of the Fund are sold on a continuous basis by the Distributor with
principal offices located at 680 East Swedesford Road, Wayne, Pennsylvania
19087. Shares may also be purchased through CoreStates Securities Corp.
Institutional investors may acquire Class Y Shares of the Fund for their
own account or as a record owner on behalf of
How to Purchase and Redeem Shares 27
<PAGE>
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INFORMATION ON THE FUNDS (CONTINUED)
fiduciary, agency, or custody accounts by placing orders with the Distributor.
Class A Shares are offered to retail investors as well as various institutional
investors for the investment of their own funds, or for funds for which they
serve in a fiduciary, agency or custodial capacity. Purchases may be made on any
business day of the Fund at the net asset value per share (see 'Valuation of
Shares') next determined after receipt by the Fund of an order to purchase
shares. Shares of the Fund are offered only to residents of states in which the
shares are eligible for purchase.
An order received before the valuation time on any business day will be
executed on the date of receipt at the net asset value determined as of the
valuation time on such date so long as federal funds are transmitted or
delivered to the Fund's custodian by close of business on the next business day.
An order received after the valuation time on any business day will be executed
on the next business day of the Fund at the net asset value determined on such
date. An order is deemed to be received when received by the Transfer Agent and
the execution of purchase orders by the Transfer Agent will be delayed for the
period of time that the order is in transit from SEI Financial Management
Corporation to the Transfer Agent.
Funds should be wired to CORESTATES PHIL, Philadelphia, PA ABA #031000011,
for credit to COREFUNDS-A/C #0169-0541. The wire instructions must also include
the account number. Before wiring any funds however, an investor must call
CoreFunds Investor Services at 1-800-355-CORE in order to confirm the wire
instructions for the Transfer Agent, State Street Bank and Trust Company. An
order to purchase shares by federal funds wire will be deemed to have been
received by the Fund on the business day that investors notify CoreFunds
Investor Services by 12:00 p.m. (Eastern time) of their intentions to wire money
provided that federal funds are received by the custodian on the following
business day.
The minimum investment amount for institutional investors is $1,000,000
for the initial purchase of Class Y Shares which amount may be waived at the
discretion of the Distributor. There is no minimum for subsequent investments.
The minimum investment amount is $500 for the initial purchase of Class A
Shares by an investor, which amount may be waived at the discretion of the
Distributor. A maximum sales load of 3.25% is deducted from the purchase or
offering price of Class A Shares at the time of purchase for purchases of less
than $100,000 declining to 0% for purchases of $1 million or more. There is no
minimum for subsequent purchases.
The Fund reserves the right to reject any order for the purchase of shares
in whole or in part.
Every shareholder of record will receive a confirmation of each new share
transaction with the Fund, which will also show the total number of shares being
held in safekeeping by the Transfer Agent for the account of the shareholder.
Shareholders may rely on these statements in lieu of certificates. Certificates
representing shares of the Funds will not be issued.
Beneficial ownership of shares held of record by institutional investors
on behalf of their customers will be recorded by the institutions and reflected
in the regular account statements provided by them to their customers.
28 How to Purchase and Redeem Shares
<PAGE>
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/X/ COREFUND
1. SALES CHARGES
The sales charges for Class A Shares of the Fund are as follows:
<TABLE>
<S> <C> <C> <C>
SALES CHARGE SALES CHARGE
AS PERCENTAGE AS PERCENTAGE
OF OFFERING OF NET AMOUNT BROKER DEALER
AMOUNT OF PURCHASE PRICE INVESTED REALLOWANCE
- -------------------- ------------- ------------- ---------------
Less than
$100,000 ......... 3.25% 3.36% 2.75%
$100,000 but less
than $250,000 .... 2.50% 2.56% 2.00%
$250,000 but less
than $500,000 .... 1.75% 1.78% 1.25%
$500,000 but less
than
$1,000,000 ....... 1.00% 1.01% 0.50%
$1,000,000 and
above ............ 0% 0% 0%
</TABLE>
The Reallowances shown in the above table apply to sales through financial
institutions. Under certain circumstances, the Distributor may use its own funds
to compensate financial institutions in amounts that are additional to the
reallowances shown in the table. In addition, the Distributor may, from time to
time and at its own expense, provide promotional incentives, in the form of cash
or other compensation, to certain financial institutions whose representatives
have sold or are expected to sell significant amounts of the shares of the Fund.
Brokers, dealers, or financial institutions that receive a reallowance of
100% of the sales charge may be considered underwriters for purposes of the
federal securities laws.
The following classes of shareholders will be exempted from paying any
sales charge: (a) employees (including members of their immediate families and
significant others) of CoreStates Corp, Martin Currie, Alpha Global, Aberdeen
Managers and their affiliates and those persons engaged in the sale and
distribution of CoreFunds; (b) employees of the Administrator and Distributor;
(c) Directors and officers of CoreFunds; (d) customers who purchase their shares
under a shareholder servicing arrangement between CoreFunds and
CoreStates Corp or its affiliates, having met specific standards which
CoreStates Corp or its affiliates will publish periodically and which qualify
those customers as customers of the Private Banking Groups; (e) Individual
Retirement Account rollovers from qualified employee benefit plans, Keogh plans,
and Simplified Employee Benefit plans, and Simplified Employee Benefit Plans
where CoreStates Corp or its affiliate serves as trustee or investment manager;
(f) any retirement plan qualified under Section 401(a) of the Code or any other
non-qualified benefit plan; (g) any participant-directed retirement plan
qualified under Section 401(a) of the Code or any participant-directed
non-qualified defined compensation plan described in Section 457 of the Code;
and (h) persons purchasing shares directly through a payroll deduction program
administered by CoreStates Corp or its affiliates. In addition, the initial
sales charge will be waived for (a) investors who are transferring shares from
another investment company which has a broker/dealer relationship with CoreFunds
for which they have already paid a sales charge since October 26, 1992, (b)
customers converting from CoreStates Personal Financial Services Asset
Allocation Program (CorePath) to Class A Shares of the Fund and (c) shareholders
who have purchased shares of a mutual fund through an asset allocation program
offered by a company which has been acquired by CoreStates Financial Corp, and
who wish to transfer those shares to Class A Shares of the Fund. Subsequent
investments in the Fund by these investors will be subject to the applicable
sales charge.
The sales charge will not apply to purchases made through reinvested
dividends and distributions. The sales
How to Purchase and Redeem Shares 29
<PAGE>
- --------------------------------------------------------------------------------
INFORMATION ON THE FUNDS (CONTINUED)
charge also will not apply to exchanges between portfolios of CoreFunds to the
extent that a shareholder has credit for previously paid sales charges on
purchases of any of the portfolios of CoreFunds.
From time to time, CoreFunds may waive the Fund's sales charge for those
investors purchasing shares through sales materials placed in local newspapers
and magazines. The advertisement will detail the procedure for purchasing Fund
Class A Shares without the imposition of the sales charge, including, but not
limited to, the duration of the offer.
2. RIGHT OF ACCUMULATION
A shareholder who purchases additional Class A Shares of the Fund may obtain a
'Right of Accumulation.' This Right allows an investor to combine the current
purchase of Class A and Class C Shares with the total market value or net
investment, whichever is higher, of all shares held of any portfolio of
CoreFunds which assesses a sales charge. To obtain the reduced sales charge
through a Right of Accumulation, the shareholder must provide the Distributor,
either directly or through CoreStates Securities Corp or a Participating
Broker/Dealer, as applicable, with sufficient information to verify that the
shareholder has such a right. CoreFunds may amend or terminate this Right of
Accumulation at any time as to subsequent purchases.
3. LETTER OF INTENT
An investor may also obtain the reduced sales charge shown above by
executing a 'Letter of Intent' which states the investor's intention to invest
not less than $100,000 within a 13 month period in Class A and Class C Shares.
Each purchase under a Letter of Intent will be made at the offering price
applicable at the time of such purchase to the full amount indicated on the
Letter of Intent. The Letter of Intent may apply to purchases made up to ninety
days before the date of the Letter. Any redemptions made during the 13 month
period will be subtracted from the amount of purchases in determining whether
the terms of the Letter of Intent have been met. During the term of the Letter
of Intent, the Transfer Agent will hold Class A and Class C Shares representing
5% of the specified amount in escrow for payment of a higher sales charge if the
full amount specified is not purchased. The escrowed shares will be released
when the full amount specified has been purchased. If the full amount specified
is not purchased within the 13 month period, the investor will be required to
pay an amount equal to the difference in the dollar amount of sales charge
actually paid and the amount of sales charge the investor would have had to pay
on his or her aggregate purchases if the total of such purchases had been made
at a single time. See 'Terms and Conditions' included in the Letter of Intent.
An investor who wishes to enter into a Letter of Intent in conjunction with an
investment in Class A and Class C Shares should complete the appropriate section
of the application or contact the Distributor, CoreStates Securities Corp or a
Participating Broker/Dealer.
REDEMPTION OF SHARES ___________________________________________________________
Shares may ordinarily be redeemed in accordance with the procedures described
below.
With respect to shares held by institutional investors on behalf of their
customer accounts, all or part of the shares beneficially owned by a customer
may be redeemed in accordance with instructions and limitations pertaining to
their account at the institution.
Shareholders who desire to redeem Shares of the Fund must place their
redemption orders with CoreFunds Investor Services for the Transfer Agent, State
Street Bank and Trust Company prior to 4:00 p.m.
30 How to Purchase and Redeem Shares
<PAGE>
- --------------------------------------------------------------------------------
/X/ COREFUND
(Eastern time) on any business day (12:00 p.m. for the Money Market Funds).
Payment will be made the next business day after proper receipt by the Transfer
Agent by transfer of federal funds. An order is deemed to be received when
received by the transfer agent and the execution of redemption orders by the
Transfer Agent will be delayed for the period of time that the redemption order
is in transit from SEI Financial Management Corporation to the Transfer Agent.
Otherwise, the redemption order will be effective the next business day.
The Fund intends to pay cash for all shares redeemed but under abnormal
conditions which make payment in cash unwise, the Fund may make payment wholly
or partly in portfolio securities at their then market value equal to the
redemption price. In such cases, a shareholder may incur brokerage costs in
converting such securities to cash.
/X/
DESCRIPTION
OF SHARES
CoreFunds has set up the following twenty-one portfolios: Growth Equity, Equity,
Special Equity, Equity Index, International Growth, Balanced, Short-Intermediate
Bond, Bond, Short Term Income, Government Income, Intermediate Municipal Bond,
Pennsylvania Municipal Bond, New Jersey Municipal Bond, Global Bond, Cash
Reserve, Treasury Reserve, Tax-Free Reserve, Elite Cash Reserve, Elite
Government Reserve, Elite Treasury Reserve and Elite Tax-Free Reserve. CoreFunds
offers two classes of shares for each portfolio. CoreFunds may in the future
create one or more additional portfolios, or one or more classes of shares
within a portfolio. Class Y Shares-Institutional, Class A and C Shares-
Individual and shares of the Elite Money Market Funds are offered in separate
prospectuses. In addition to this prospectus, the shares of the Equity Index
Fund (Class Y Shares) are also offered in the CoreFunds Class Y
Shares-Institutional prospectus.
Class A Shares differ from Class Y Shares in that Class A Shares are
subject to a sales load and distribution and transfer agent expenses for certain
additional shareholder services they receive. Class C Shares also differ from
Class Y Shares in that Class C Shares are subject to distribution and transfer
agent expense for certain additional shareholder services, but unlike Class A
Shares, are not subject to a sales load. Classes A and C Shares also have voting
rights which Class Y Shares do not, in connection with the Distribution Plan
affecting Class A and C Shares. In addition, the distribution and transfer agent
expenses charged Class A and C Shares result in Class A and C Shares having
different dividends and performance results from Class Y Shares. In addition,
the minimum initial investment for Class Y Shares is substantially higher than
that required for Class A or Class C Shares with the exception of the Equity
Index Fund.
THIS PROSPECTUS AND THE STATEMENT OF ADDITIONAL INFORMATION INCORPORATED
HEREIN RELATE PRIMARILY TO CLASS Y SHARES OF THE EQUITY INDEX FUND AND DESCRIBE
ONLY THE INVESTMENT OBJECTIVE AND POLICIES, OPERATIONS, CONTRACTS, AND OTHER
MATTERS RELATING TO SUCH SHARES. INVESTORS WISHING TO OBTAIN SIMILAR INFORMATION
REGARDING OTHER COREFUND PORTFOLIOS MAY OBTAIN PROSPECTUSES DESCRIBING SUCH
PORTFOLIOS BY CONTACTING THE DISTRIBUTOR AT 1-800-355-CORE.
Description of Shares 31
<PAGE>
- --------------------------------------------------------------------------------
INFORMATION ON THE FUNDS (CONTINUED)
Except for differences between classes of some of CoreFunds' portfolios
pertaining to distribution costs, incremental transfer agency fees and any other
incremental expenses identified that should be properly allocated to a class,
each share in each Fund represents an equal proportionate interest in that Fund
with each other share of the same Fund and is entitled to such dividends and
distributions out of the income earned on the assets belonging to such Fund as
are declared in the discretion of the Board of Directors.
CoreFunds' shareholders are entitled to one vote for each full share held,
and fractional votes for fractional shares held, and will vote in the aggregate
and not by portfolio or class except as otherwise expressly required by law or
when the Board of Directors determines that the matter to be voted upon affects
only the interests of the shareholders of a particular Portfolio or class. See
the Statement of Additional Information under 'Description of Shares' for
examples where the Investment Company Act requires voting by portfolio or class.
Voting rights are not cumulative and, accordingly, the holders of more than 50%
of the aggregate number of shares of all of the Funds may elect all of the
directors if they choose to do so and, in such event, the holders of the
remaining shares would not be able to elect any person or persons to the Board
of Directors.
As used in this Prospectus, a 'vote of a majority of the outstanding
shares' of a Fund means the affirmative vote of the lesser of (a) more than 50%
of the outstanding shares of a Fund, or (b) at least 67% of the shares of a Fund
present at a meeting at which the holders of more than 50% of the outstanding
shares of such Fund are represented in person or by proxy.
/X/
GENERAL
INFORMATION
In accordance with the Maryland General Corporation Law, CoreFunds is not
required to hold annual meetings of shareholders unless the Investment Company
Act requires the shareholders to elect members of the Board of Directors.
However, a meeting of shareholders may be called for any purpose upon the
written request of the holders of at least 10% of the outstanding shares of
CoreFunds, or of a Fund with respect to matters affecting only such Fund.
As used in this Prospectus, 'assets belonging to the Fund' means the
consideration received by CoreFunds upon the issuance or sale of shares in the
Fund, together with all income, earnings, profits and proceeds derived from the
investment thereof, including any proceeds from the sale, exchange or
liquidation of such investments, and any funds or payments derived from any
reinvestment of such proceeds, and a portion of any general assets of CoreFunds
not belonging to the Fund or CoreFunds' other portfolios. Assets belonging to
the Fund are charged with the direct liabilities in respect of that Fund and
with a share of the general liabilities of CoreFunds allocated in proportion to
the relative asset values of each of CoreFunds' portfolios at the time the
expense or liability is incurred. The management of CoreFunds makes
determinations with respect to the Fund as to liabilities when they are incurred
and as to assets when they are acquired. Such determinations are reviewed and
approved annually by the Board of Directors and are conclusive.
32 General Information
<PAGE>
- -------------------------------------------------------------------------------
COREFUND FAMILY OF MUTUAL FUNDS /X/ COREFUND
EQUITY FUNDS
(STOCKS)
GROWTH EQUITY FUND seeks capital growth by investing primarily in the equity
securities of companies believed by management to show the potential for growth
of earnings over time.
EQUITY FUND seeks capital growth by investing principally in a diversified
portfolio of common stocks with large, medium or small capitalizations.
SPECIAL EQUITY FUND seeks capital growth by investing principally in a
diversified portfolio of common stocks of domestic companies expected to
experience growth in earnings and price.
EQUITY INDEX FUND seeks to track the price and yield performance of the
Standard & Poors 500 Composite Stock Price Index.
INTERNATIONAL GROWTH FUND seeks long-term capital appreciation by investing
primarily in appreciation-oriented equity securities of companies located
outside the United States.
BALANCED FUND seeks to provide total return while preserving capital by
investing in a combination of common stocks and fixed income securities.
FIXED INCOME FUNDS
(BONDS)
SHORT-INTERMEDIATE BOND FUND seeks income through investment in a diversified
portfolio of intermediate term, fixed income obligations with an expected
average weighted maturity of two to five years.
BOND FUND seeks to maximize long-term total return by investing principally in a
diversified portfolio of debt securities.
SHORT-TERM INCOME FUND seeks to obtain consistent current income with relative
stability of principal by investing principally in a diversified portfolio of
investment grade debt securities.
GOVERNMENT INCOME FUND seeks to provide current income while preserving
principal value and maintaining liquidity by investing exclusively in securities
of the United States government and its agencies.
INTERMEDIATE MUNICIPAL BOND FUND seeks a high level of income generally exempt
from federal income taxes by investing at least 80% of its assets in tax-exempt
municipal securities.
PENNSYLVANIA MUNICIPAL BOND FUND seeks to provide a high rate of current income
that is exempt from both federal income taxes and (for Pennsylvania residents)
Pennsylvania state income taxes. The Fund invests primarily in highly-rated,
long-term municipal bonds issued by state, county, and local agencies within the
Commonwealth of Pennsylvania.
THERE IS NO ASSURANCE THAT THE FUNDS WILL ACHIEVE THEIR RESPECTIVE OBJECTIVES.
<PAGE>
- -------------------------------------------------------------------------------
COREFUND FAMILY OF MUTUAL FUNDS /X/ COREFUND
FIXED INCOME FUNDS
(BONDS)
NEW JERSEY MUNICIPAL BOND FUND seeks to provide a high rate of current income
that is exempt from both federal income taxes and (for New Jersey residents) New
Jersey state income taxes. The Fund invests primarily in highly-rated, long-term
municipal bonds issued by state, county, and local agencies within the state of
New Jersey.
GLOBAL BOND FUND seeks to provide capital appreciation and current income
through investment primarily in fixed income securities of United States and
foreign issuers denominated in United States dollars and in other currencies.
MONEY MARKET
FUNDS
CASH RESERVE seeks to obtain maximum current income consistent with the
preservation of principal and maintenance of liquidity by investing in a
diversified portfolio of money market instruments of the highest quality,
including a broad range of U.S. dollar-denominated government, bank, and
commercial paper obligations.
TREASURY RESERVE seeks to provide current interest income, liquidity and safety
of principal by investing in direct obligations of the U.S. Treasury and
repurchase agreements relating to such obligations.
TAX-FREE RESERVE seeks a high level of income exempt from federal income taxes
through investment of at least 80% of its total assets in tax-free securities.
THERE IS NO ASSURANCE THAT THE FUNDS WILL ACHIEVE THEIR RESPECTIVE OBJECTIVES.
<PAGE>
COREFUND(R)
EQUITY INDEX FUND
Prospectus
August 21, 1996
COREFUNDS, INC.
DIRECTORS
Emil J. Mikity, Chairman
George H. Strong
Erin Anderson
Cheryl H. Wade
Thomas J. Taylor
OFFICERS
David G. Lee, President
James W. Jennings, Secretary
INVESTMENT ADVISER
Corestates Investment Advisers, Inc.
Philadelphia, PA 19101
ADMINISTRATOR
SEI Fund Resources
Wayne, PA 19087
DISTRIBUTOR
SEI financial Services Company
Wayne, PA 19087
LEGAL COUNSEL
Morgan, Lewis & Bockius LLP
Philadelphia, PA 19103
AUDITORS
Ernst &Young LLP
Philadelphia, PA 19103
Investment Adviser
CORESTATES
CORESTATES
INVESTMENT ADVISERS
For current performance, purchase, redemption and
other information, call 1-800-355-CORE (2673)
Cor-F-052-03
<PAGE>
PART C. OTHER INFORMATION
Item 24. Financial Statements and Exhibits
(a) Financial Statements: See Statement of Additional Information.
(b) Exhibits:
(1) (a) Articles of Incorporation dated
September 11, 1984 are incorporated herein
by reference to Exhibit (1) of Registrant's
Registration Statement on Form N-1A, as
filed with the Securities and Exchange
Commission on September 11, 1984.
(b) Articles of Amendment dated March 29, 1985
to Articles of Incorporation dated September
11, 1984 are incorporated herein by
reference to Exhibit (1)(b) of Pre-Effective
Amendment No. 1 to Registrant's Registration
Statement on Form N-1A, as filed with the
Securities and Exchange Commission on May
22, 1985.
(c) Articles Supplementary dated March 29, 1985
to Articles of Incorporation dated September
11, 1984 are incorporated herein by
reference to Exhibit (1)(c) of Pre-Effective
Amendment No. 1 to Registrant's Registration
Statement on Form N-1A, as filed with the
Securities and Exchange Commission on May
22, 1985.
(d) Articles of Amendment dated June 30, 1987 to
Articles of Incorporation dated September
11, 1984 are incorporated herein by
reference to Exhibit (1)(d) of
Post-Effective Amendment No. 5 to the
Registrant's Registration Statement on Form
N-1A, as filed with the Securities and
Exchange Commission on October 30, 1987.
(e) Articles Supplementary dated March 30, 1989
to Articles of Incorporation dated September
11, 1984 are incorporated herein by
reference to Exhibit (1)(e) of
Post-Effective Amendment No. 8 to the
Registrant's Registration Statement on Form
N-1A, as filed with the Securities and
Exchange Commission on April 3, 1989.
(f) Articles Supplementary dated December 18,
1990 to Registrant's Articles of
Incorporation dated September 11, 1984 are
incorporated herein by reference to Exhibit
(1)(f) of Post-Effective Amendment No. 11
to the Registrant's Registration Statement
on Form N-1A, as filed with the Securities
and Exchange Commission on January 24, 1991.
C-1
<PAGE>
(g) Articles Supplementary dated September 3,
1991 to Registrant's Articles of
Incorporation dated September 11, 1984 are
incorporated by reference to Exhibit (1)(g)
of Post-Effective Amendment No. 12 to the
Registrant's Registration Statement on Form
N-1A, as filed with the Securities and
Exchange Commission on October 31, 1991.
(h) Articles Supplementary dated December 18,
1992 to Registrant's Articles of
Incorporation dated September 11, 1984 are
incorporated by reference to Exhibit (1)(h)
of Post-Effective Amendment No. 15 to the
Registrant's Registration Statement on Form
N-1A, as filed with the Securities and
Exchange Commission on June 30, 1993.
(i) Articles Supplementary dated June 26, 1992
to Registrant's Articles of Incorporation
dated September 11, 1984 are incorporated by
reference to Exhibit (1)(i) of Post-
Effective Amendment No. 16 to the
Registrant's Registration Statement on Form
N-1A, as filed with the Securities and
Exchange Commission on August 27, 1993.
(j) Articles Supplementary dated November 8,
1993 to Registrant's Articles of
Incorporation dated September 11, 1984 are
incorporated by reference to Exhibit (1)(j)
of Post-Effective Amendment No. 17 to the
Registrant's Registration Statement on Form
N-1A, as filed with the Securities and
Exchange Commission on December 30, 1993.
(k) Articles of Transfer dated November 23, 1993
are incorporated by reference to Exhibit (1)
(k) of Post-Effective Amendment No. 17 to
the Registrant's Registration Statement on
Form N-1A, as filed with the Securities and
Exchange Commission on December 30, 1993.
(l) Articles Supplementary dated December 15,
1993 to Registrant's Articles of
Incorporation dated September 11, 1984 are
incorporated by reference to Exhibit (1)(l)
of Post-Effective Amendment No. 17 to the
Registrant's Registration Statement on Form
N-1A, as filed with the Securities and
Exchange Commission on December 30, 1993.
(m) Articles Supplementary dated April 14, 1994
to Registrant's Articles of Incorporation
dated September 11, 1984 are incorporated by
reference to Exhibit (1)(m) of
Post-Effective Amendment No. 21 to the
Registrant's Registration Statement on Form
N-1A, as filed with the Securities and
Exchange Commission on October 28, 1994.
C-2
<PAGE>
(n) Articles of Amendment dated March 6, 1996 to
Registrant's Articles of Incorporation dated
September 11, 1984, are incorporated by
reference to Exhibit (1)(n) of
Post-Effective Amendment No. 27 to
Registrant's Registration Statement on Form
N-1A as filed with the Securities and
Exchange Commission on May 14, 1996.
(o) Articles Supplementary dated March 29, 1996
to Registratant's Articles of Incorporation
dated September 11, 1984, are incorporated
by reference to Exhibit (1)(o) of
Post-Effective Amendment No. 27 to
Registrant's Registration Statement on Form
N-1A as filed with the Securities and
Exchange Commission on May 14, 1996.
(2) By-Laws as amended, restated and adopted by
Registrant's Board of Directors on September 3, 1991
are incorporated by reference to Exhibit (2) of
Post-Effective Amendment No. 12 to the Registrant's
Registration Statement on Form N-1A, as filed with
the Securities and Exchange Commission on
October 31, 1991.
(3) None.
(4) (a) Specimen certificate for Class A Common
Stock is incorporated herein by reference to
Exhibit (4)(a) of Post-Effective Amendment
No. 7 to Registrant's Registration Statement
on Form N-1A, as filed with the Securities
and Exchange Commission on September 9,
1988.
(b) Specimen certificate for Class B Common
Stock is incorporated herein by reference to
Exhibit (4)(b) of Post-Effective Amendment
No. 7 to Registrant's Registration Statement
on Form N-1A, as filed with the Securities
and Exchange Commission on September 9,
1988.
(c) Specimen certificate for Class C Common
Stock is incorporated herein by reference to
Exhibit (4)(c) of Post-Effective Amendment
No. 10 to Registrant's Registration
Statement on Form N-1A, as filed with the
Securities and Exchange Commission on
October 29, 1990.
(d) Specimen certificate for Class D Common
Stock is incorporated herein by reference to
Exhibit (4)(d) of Post-Effective Amendment
No. 10 to Registrant's Registration
Statement on Form N-1A, as filed with the
Securities and Exchange Commission on
October 29, 1990.
C-3
<PAGE>
(e) Specimen certificate for Class E Common
Stock is incorporated herein by reference to
Exhibit (4)(e) of Post-Effective Amendment
No. 10 to Registrant's Registration
Statement on Form N-1A, as filed with the
Securities and Exchange Commission on
October 29, 1990.
(f) Specimen copy of share certificate for Class
F Common Stock is incorporated by reference
to Exhibit (4)(f) of Post-Effective
Amendment No. 12 to Registrant's
Registration Statement on Form N-1A, as
filed with the Securities and Exchange
Commission on October 31, 1991.
(g) Specimen copy of share certificate for Class
G Common Stock is incorporated by reference
to Exhibit (4)(g) of Post-Effective
Amendment No. 12 to Registrant's
Registration Statement on Form N-1A, as
filed with the Securities and Exchange
Commission on October 31, 1991.
(h) Specimen copy of share certificate for Class
H Common Stock is incorporated by reference
to Exhibit (4)(h) of Post-Effective
Amendment No. 12 to Registrant's
Registration Statement on Form N-1A, as
filed with the Securities and Exchange
Commission on October 31, 1991.
(i) Specimen copy of share certificate for Class
I Common Stock is incorporated by reference
to Exhibit (4)(i) of Post-Effective
Amendment No. 12 to Registrant's
Registration Statement on Form N-1A, as
filed with the Securities and Exchange
Commission on October 31, 1991.
(j) Specimen copy of share certificate for Class
J Common Stock is incorporated by reference
to Exhibit (4)(j) of Post-Effective
Amendment No. 12 to Registrant's
Registration Statement on Form N-1A, as
filed with the Securities and Exchange
Commission on October 31, 1991.
(k) Specimen copy of share certificate for Class
K Common Stock is incorporated by reference
to Exhibit (4)(k) of Post-Effective
Amendment No. 12 to Registrant's
Registration Statement on Form N-1A, as
filed with the Securities and Exchange
Commission on October 31, 1991.
C-4
<PAGE>
(5) (a) Investment Advisory Agreement between
Registrant and New Jersey National Bank
dated August 2, 1985 is incorporated herein
by reference to Exhibit (5) of Pre-Effective
Amendment No. 1 to Registrant's Registration
Statement on Form N-1A, as filed with the
Securities and Exchange Commission on May
22, 1985.
(b) Investment Advisory Agreement between
Registrant and CoreStates Investment
Advisers, Inc. dated June 23, 1987 is
incorporated herein by reference to Exhibit
(5)(b) of Post-Effective Amendment No. 5 to
the Registrant's Registration Statement on
Form N-1A, as filed with the Securities and
Exchange Commission on October 30, 1987.
(c) Investment Advisory Agreement between
Registrant and CoreStates Investment
Advisers, Inc. dated December 5, 1989 with
respect to CoreFund International Growth
Fund is incorporated herein by reference to
Exhibit (5)(c) of Post-Effective Amendment
No. 9 to the Registrant's Registration
Statement on Form N-1A, as filed with the
Securities and Exchange Commission on
September 1, 1989.
(d) Investment Advisory Agreement between
Registrant and CoreStates Investment
Advisers, Inc. dated December 5, 1989 with
respect to CoreFund Equity Fund is
incorporated herein by reference to Exhibit
(5)(d) of Post-Effective Amendment No. 9 to
the Registrant's Registration Statement on
Form N-1A, as filed with the Securities and
Exchange Commission on September 1, 1989.
(e) Sub-Investment Advisory Agreement between
Registrant and Cashman, Farrell and
Associates dated December 5, 1989 is
incorporated herein by reference to Exhibit
(5)(e) of Post-Effective Amendment No. 9 to
the Registrant's Registration Statement on
Form N-1A, as filed with the Securities and
Exchange Commission on September 1, 1989.
(f) Sub-Investment Advisory Agreement between
Registrant and Martin Currie, Inc. dated
December 5, 1989 is incorporated herein by
reference to Exhibit (5)(f) of
Post-Effective Amendment No. 9 to the
Registrant's Registration Statement on Form
N-1A, as filed with the Securities and
Exchange Commission on September 1, 1989.
C-5
<PAGE>
(g) Proposed Investment Advisory Agreement
between Registrant and CoreStates Investment
Advisers, Inc. with respect to CoreFund
Equity Index Fund dated March 25, 1991 is
incorporated herein by reference to Exhibit
(5)(g) of Post-Effective Amendment No. 11
to the Registrant's Registration Statement
on Form N-1A, as filed with the Securities
and Exchange Commission on January 24, 1991.
(h) Proposed Investment Advisory Agreement
between Registrant and CoreStates Investment
Advisers, Inc. with respect to CoreFund
Growth Equity Fund dated March 25, 1991 is
incorporated herein by reference to Exhibit
(5)(h) of Post-Effective Amendment No. 11
to the Registrant's Registration Statement
on Form N-1A, as filed with the Securities
and Exchange Commission on January 24, 1991.
(i) Proposed Investment Advisory Agreement
between Registrant and CoreStates Investment
Advisers, Inc. with respect to CoreFund
Short Intermediate Bond Fund dated March 25,
1991 is incorporated herein by reference to
Exhibit (5)(i) of Post-Effective Amendment
No. 11 to the Registrant's Registration
Statement on Form N-1A, as filed with the
Securities and Exchange Commission on
January 24, 1991.
(j) Proposed Investment Advisory Agreement
between Registrant and CoreStates Investment
Advisers, Inc. with respect to CoreFund
Fiduciary Tax-Free Reserve dated March 25,
1991 is incorporated herein by reference to
Exhibit (5)(j) of Post-Effective Amendment
No. 11 to the Registrant's Registration
Statement on Form N-1A, as filed with the
Securities and Exchange Commission on
January 24, 1991.
(k) Proposed Investment Advisory Agreement
between Registrant and CoreStates Investment
Advisers, Inc. with respect to CoreFund
Tax-Free Reserve dated March 25, 1991 is
incorporated herein by reference to Exhibit
(5)(k) of Post-Effective Amendment No. 11
to the Registrant's Registration Statement
on Form N-1A, as filed with the Securities
and Exchange Commission on January 24, 1991.
(l) Proposed Investment Advisory Agreement
between Registrant and CoreStates Investment
Advisers, Inc. with respect to CoreFund
Fiduciary Treasury Reserve dated March 25,
1991 is incorporated herein by reference to
Exhibit (5)(k) of Post-Effective Amendment
No. 11 to the Registrant's Registration
Statement on Form N-1A,
C-6
<PAGE>
as filed with the Securities and Exchange
Commission on January 24, 1991.
(m) Investment Advisory Agreement between
Registrant and CoreStates Investment
Advisers, Inc. with respect to CoreFund
Balanced Fund dated September 15, 1992 is
incorporated herein by reference to Exhibit
(5)(m) of Post-Effective Amendment No. 15
to the Registrant's Registration Statement
on Form N-1A, as filed with the Securities
and Exchange Commission on June 30, 1993.
(n) Proposed Investment Advisory Agreement
between Registrant and CoreStates Investment
Advisers, Inc. with respect to CoreFund
Government Income Fund dated March 25, 1991
is incorporated herein by reference to
Exhibit (5)(k) of Post-Effective Amendment
No. 11 to the Registrant's Registration
Statement on Form N-1A, as filed with the
Securities and Exchange Commission on
January 24, 1991.
(o) Proposed Investment Advisory Agreement
between Registrant and CoreStates Investment
Advisers, Inc. with respect to CoreFund
Intermediate-Term Municipal Fund dated March
25, 1991 is incorporated herein by reference
to Exhibit (5)(k) of Post-Effective
Amendment No. 11 to the Registrant's
Registration Statement on Form N-1A, as
filed with the Securities and Exchange
Commission on January 24, 1991.
(p) Investment Advisory Agreement between
Registrant and CoreStates Investment
Advisers, Inc. with respect to CoreFund
Global Bond Fund dated March 25, 1991 is
incorporated herein by reference to Exhibit
(5)(k) of Post-Effective Amendment No. 11
to Registrant's Registration Statement on
Form N-1A, as filed with the Securities and
Exchange Commission on January 24, 1991.
(q) Sub-Advisory Agreement between CoreStates
Investment Advisers, Inc. and Alpha Global
Fixed Income Managers, Inc. with respect to
Global Bond Fund dated December 15, 1993 is
incorporated by reference to Exhibit (5)(q)
of Post-Effective Amendment No. 17 to
Registrant's Registration Statement on Form
N-1A, as filed with the Securities and
Exchange Commission on December 30, 1993.
(r) Investment Advisory Agreement between
Registrant and CoreStates Investment
Advisers, Inc. with respect to Pennsylvania
Municipal Bond Fund dated March 25, 1991 is
incorporated herein by reference to Exhibit
(5)(i) of Post-Effective Amendment No. 11
to the Registrant's Registration Statement
on Form N-1A, as filed with Securities and
Exchange Commission on January 24, 1991.
C-7
<PAGE>
(s) Investment Advisory Agreement between
Registrant and CoreStates Investment
Advisers, Inc. with respect to New Jersey
Municipal Bond Fund dated March 25, 1991 is
incorporated herein by reference to Exhibit
(5)(i) of Post-Effective Amendment No. 11
to the Registrant's Registration Statement
on Form N-1A, as filed with the Securities
and Exchange Commission on January 24, 1991.
(t) Investment Advisory Agreement between
Registrant and CoreStates Investment
Advisers, Inc. with respect to CoreFund
Elite Cash Reserve, CoreFund Elite
Government Reserve and CoreFund Elite
Treasury Reserve dated June 21, 1994 is
incorporated herein by reference to Exhibit
(5) (t) of Post-Effective Amendment No. 21
to the Registrant's Registration Statement
on Form N-1A, as filed with the Securities
and Exchange Commission on October 28, 1994.
(u) Proposed Investment Advisory Agreement
between Registrant and CoreStates Investment
Advisers, Inc. with respect to CoreFund
Special Equity Fund, CoreFund Bond Fund and
CoreFund Short-Term Income Fund is
incorporated herein by reference to Exhibit
(5)(u) of Post-Effective Amendment No. 24 to
Registrant's Registration Statement on Form
N-1A, as filed with the Securities and
Exchange Commission on January 2, 1996.
(6) (a) Distribution Agreement between Registrant
and Fairfield Group, Inc. dated August 2,
1985 is incorporated herein by reference to
Exhibit (6) of Pre-Effective Amendment No. 1
to Registrant's Registration Statement on
Form N-1A, as filed with the Securities and
Exchange Commission on May 22, 1985.
(b) Distribution Agreement between Registrant
and SEI Financial Services Company is
incorporated herein by reference to Exhibit
(6)(b) of Post-Effective Amendment No. 14 to
Registrant's Registration Statement on Form
N-1A, as filed with the Securities and
Exchange Commission on August 31, 1992.
(7) None.
(8) (a) Custodian Agreement between Registrant and
First Pennsylvania Bank N.A. dated July 24,
1985 is incorporated herein by reference to
Exhibit (8) of Pre-Effective Amendment No. 2
to Registrant's Registration Statement on
Form N-1A, as filed with the Securities and
Exchange Commission on August 1, 1985.
(b) Custodian Agreement between Registrant and
Philadelphia National Bank dated May 20,
1987 is incorporated herein by reference to
C-8
<PAGE>
Exhibit (8)(b) of Post-Effective Amendment
No. 5 to the Registrant's Registration
Statement on Form N-1A, as filed with the
Securities and Exchange Commission on
October 30, 1987.
(c) Custodian Agreement between Registrant and
CoreStates Bank, N.A. dated June 2, 1995, is
incorporated by reference to Exhibit (8)(c)
of Post-Effective Amendment No. 27 to
Registrant's Registration Statement on Form
N-1A as filed with the Securities and
Exchange Commission on May 14, 1996.
(9) (a) Amended Administration Agreement between
Registrant and Fairfield Group, Inc. dated
March 6, 1990 is incorporated herein by
reference to Exhibit (9)(a) of Post-
Effective Amendment No. 12 to Registrant's
Registration Statement on Form N-1A, as
filed with the Securities and Exchange
Commission on October 31, 1991.
(b) Transfer Agency Agreement between Registrant
and First Pennsylvania Bank n.a. dated July
24, 1985 is incorporated herein by reference
to Exhibit (9)(b) of Pre-Effective
Amendment No. 2, to Registrant's
Registration Statement on Form N-1A as filed
with the Securities and Exchange Commission
on August 1, 1985.
(c) Amended Transfer Agency Agreement between
First Pennsylvania Bank n.a. and Fund/Plan
Services, Inc., dated December 31, 1985 is
incorporated herein by reference to Exhibit
(9)(c) of Post-Effective Amendment No. 1
to Registrant's Registration Statement on
Form N-1A as filed with the Securities and
Exchange Commission on February 5, 1986.
(d) Retail Transfer Agency Agreement between
Registrant and SEI Financial Management
Corporation is incorporated herein by
reference to Exhibit (9)(d) of
Post-Effective Amendment No. 14 to
Registrant's Registration Statement on Form
N-1A as filed with the Securities and
Exchange Commission on August 31, 1992.
(e) Administration Agreement between Registrant
and SEI Financial Management Corporation
dated October 30, 1992 is incorporated
herein by reference to Exhibit (9)(e) of
Post-Effective Amendment No. 15 to
Registrant's Registration Statement on Form
N-1A as filed with the Securities and
Exchange Commission on June 30,
1993.
(f) Transfer Agent and Shareholder Services
Agreement between Registrant and SEI
Financial Management Corporation dated March
4, 1993 is incorporated herein by reference
to Exhibit (9)(f) of Post-Effective
Amendment No. 15 to Registrant's
Registration
C-9
<PAGE>
Statement on Form N-1A as filed with the
Securities and Exchange Commission on June
30, 1993.
(g) Transfer Agent Agreement between the
Registrant and State Street Bank and Trust
Company dated November 16, 1995, is
incorporated by reference to Exhibit (9)(g)
of Post-Effective Amendment No. 27 to
Registrant's Registration Statement on Form
N-1A as filed with the Securities and
Exchange Commission on May 14, 1996.
(10) Opinion and consent of Morgan, Lewis &
Bockius LLP, filed under Rule 24f-2 as part
of Registrant's Rule 24f-2 Notice.
*(11) Consent of Ernst & Young LLP.
(12) None.
(13) Purchase Agreement dated July 24, 1985
between Registrant and Fairfield Group, Inc.
is incorporated herein by reference to
Exhibit (13) of Pre-Effective Amendment No.
2 to Registrant's Registration Statement on
Form N-1A, as filed with the Securities and
Exchange Commission on August 1, 1985.
(14) None.
(15) None.
(16) Schedules for computation of performance
quotations provided in response to Item 22
of the Registration Statement are
incorporated herein by reference to Exhibit
16 of Post-Effective Amendment No. 12 to
Registrant's Registration Statement on Form
N-1A, as filed with the Securities and
Exchange Commission on October 31, 1991.
(18) Rule 18f-3 Plan is incorporated herein
by reference to Exhibit 18 of Post-Effective
Amendment No. 23 to the Registrant's
Registration Statement on Form N-1A, as
filed with the Securities and Exchange
Commission on October 27, 1995.
(24) (a) Powers of Attorney for Mr. Emil J. Mikity,
Mr. George H. Strong, and Professor Erin
Anderson, Directors of Registrant, and David
G. Lee, President of Registrant is
incorporated herein by reference to Exhibit
(24) of Post-Effective Amendment No. 21 to
the Registrant's Registration Statement on
Form N-1A, as filed with the Securities and
Exchange Commission on October 28, 1994.
(b) Powers of Attorney for Mr. Carmen Romeo,
Treasurer and Assistant Secretary of
Registrant, and Ms. Jean Young, Controller
of Registrant is
C-10
<PAGE>
incorporated herein by reference to Exhibit
(24)(b) of Post-Effective Amendment No. 22
to the Registrant's Registration Statement
on Form N-1A, as filed with the Securities
and Exchange Commission on November 15,
1994.
(c) Powers of Attorney for Cheryl H. Wade and
Thomas J. Taylor are incorporated herein by
reference to Exhibit 24(c) of Post-Effective
Amendment No. 28, to the Registrant's
Registration Statement on Form N-1A, or
filed with the Securities and Exchange
Commission on July 12, 1996.
(27) Financial Data Schedule incorporated by
reference to Exhibit 27 of Post-Effective
Amendment No. 26 to the Registrant's
Registration Statement on Form N-1A , as
filed with the Securities and Exchange
Commission on April 19, 1996.
- ------------------
*Filed with this Post-Effective Amendment.
Item 25. Persons Controlled by or under Common Control with Registrant
None.
Item 26. Number of Holders of Securities
As of July 30, 1996 the number of record holders of each
class of securities of the Registrant was:
Title of Class Number of Record Holders
-------------- ------------------------
Cash Reserve -- Class Y 542
Cash Reserve -- Class C 939
Treasury Reserve -- Class Y 285
Treasury Reserve -- Class C 294
Fiduciary Reserve -- Class Y 6
Fiduciary Tax-Free Reserve -- Class Y 6
Tax-Free Reserve -- Class Y 30
Tax-Free Reserve -- Class C 116
Fiduciary Treasury Reserve -- Class Y 6
Short-Intermediate Bond Fund -- Class Y 49
Short-Intermediate Bond Fund -- Class A 310
Bond Fund -- Class Y 13
Bond Fund -- Class A 288
Short Term Income Fund -- Class Y 31
Short Term Income Fund -- Class A 19
Equity Fund -- Class Y 55
C-11
<PAGE>
Equity Fund -- Class A 1,512
Special Equity Fund -- Class Y 11
Special Equity Fund -- Class A 282
International Growth Fund -- Class Y 27
International Growth Fund -- Class A 359
Equity Index Fund -- Class Y 1,444
Growth Equity Fund -- Class Y 58
Growth Equity Fund -- Class A 366
Balanced Fund -- Class Y 31
Balanced Fund -- Class A 374
Government Income Fund -- Class Y 18
Government Income Fund -- Class A 111
Intermediate Municipal Bond Fund -- Class Y 11
Intermediate Municipal Bond Fund -- Class A 63
Global Bond Fund -- Class Y 12
Global Bond Fund -- Class A 18
Pennsylvania Municipal Bond Fund -- Class Y 9
Pennsylvania Municipal Bond Fund -- Class A 66
New Jersey Municipal Bond Fund -- Class Y 12
New Jersey Municipal Bond Fund -- Class A 17
Item 27. Indemnification
Article VII, Section 3 of the Registrant's Articles of
Incorporation, incorporated by reference as Exhibit (1)
hereto, and Article VI, Section 2 of Registrant's ByLaws,
filed as Exhibit (2) hereto, provide for the indemnification
of Registrant's directors and officers. Indemnification of
the Registrant's principal underwriter, custodian, and
transfer agent is provided for, respectively, in Section
1.11 of the Distribution Agreement, incorporated by
reference as Exhibit (6) hereto, Sections 3, 18, and 19 of
the Custodian Agreement, incorporated by reference as
Exhibit (8)(b) hereto, and Sections 14, 37, and 38 of the
Transfer Agency Agreement, incorporated by reference as
Exhibit (9)(b) hereto. Registrant has obtained from a major
insurance carrier a directors' and officers' liability
policy covering certain types of errors and omissions. In no
event will Registrant indemnify any of its directors,
officers, employees, its investment adviser or principal
underwriter against any liability to which such person would
otherwise be subject by reason of his willful misfeasance,
bad faith, or gross negligence in the performance of his
duties as director, officer, employee, investment adviser,
or principal underwriter, or by reason of his reckless
disregard of the duties involved in the conduct of his
office or under the advisory or underwriting agreement with
Registrant. Registrant will comply with Rule 484 under the
Securities Act of 1933 and Release 11330 under the
Investment Company Act of 1940 in connection with any
indemnification.
Insofar as indemnification for liability arising under the
Securities Act of 1933 may be permitted to directors,
officers, and controlling persons of Registrant
C-12
<PAGE>
pursuant to the foregoing provisions, or otherwise,
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 Registrant of expenses incurred or paid by a
director, officer, or controlling person of Registrant in
the successful defense of any action, suit, or proceeding)
is asserted by such director, officer, or controlling person
in connection with the securities being registered,
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 of 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.
Item 28. Business and Other Connections of Investment Adviser
CoreStates Investment Advisers, Inc. ("CoreStates Advisers")
is a subsidiary of CoreStates Bank, N.A., which is itself a
subsidiary of CoreStates Financial Corp. CoreStates
Financial Corp is a bank holding company registered under
the Bank Holding Company Act. CoreStates Financial Corp is
engaged through its principal subsidiaries, CoreStates Bank,
N.A., a national banking association, and Hamilton Bank, a
Pennsylvania banking institution, in commercial,
international and consumer banking and in providing trust
services. CoreStates Financial Corp through other direct and
indirect subsidiaries also provides consumer financing,
factoring and commercial financing and financing advisory
services. As of July 31, 1995, CoreStates Financial Corp had
total assets of over $29 billion (pro forma). The principal
executive office of CoreStates Financial Corp is located at
Broad and Chestnut Streets, Philadelphia, Pennsylvania
19101. To the knowledge of Registrant, none of the directors
or officers of CoreStates Advisers except those set forth
below, is or has been, at any time during the past two
calendar years, engaged in any other business, profession,
vocation, or employment of a substantial nature, except that
certain directors and officers of CoreStates Advisers also
hold various positions with, and engage in business for,
CoreStates Advisers, or its subsidiaries. Set forth below
are the names and principal businesses of the directors and
certain of the senior executive officers of CoreStates
Advisers who are engaged in any other business, profession,
vocation, or employment of a substantial nature.
Item 29. Principal Underwriters:
(a) Furnish the name of each investment company (other than the Registrant)
for which each principal underwriter currently distributing the
securities of the Registrant also acts as a principal underwriter,
distributor or investment adviser.
Registrant's distributor, SEI Financial Services Company ("SFS"), acts
as distributor for:
SEI Daily Income Trust July 15, 1982
C-13
<PAGE>
SEI Liquid Asset Trust November 29, 1982
SEI Tax Exempt Trust December 3, 1982
SEI Index Funds July 10, 1985
SEI Institutional Managed Trust January 22, 1987
SEI International Trust August 30, 1988
Stepstone Funds January 30, 1991
The Advisors' Inner Circle Fund November 14, 1991
The Pillar Funds February 28, 1992
CUFUND May 1, 1992
STI Classic Funds May 29, 1992
First American Funds, Inc. November 1, 1992
First American Investment Funds, Inc. November 1, 1992
The Arbor Fund January 28, 1993
1784 Funds June 1, 1993
The PBHG Funds, Inc. July 16, 1993
Marquis Funds(R) August 17, 1993
Morgan Grenfell Investment Trust January 3, 1994
Inventor Funds, Inc. August 1, 1994
The Achievement Funds Trust December 27, 1994
Bishop Street Funds January 27, 1995
CrestFunds, Inc. March 1, 1995
STI Classic Variable Trust August 18, 1995
ARK Funds November 1, 1995
Monitor Funds January 11, 1996
FMB Funds, Inc. March 1, 1996
SEI Asset Allocation Trust April 1, 1996
Turner Funds April 30, 1996
SFS provides numerous financial services to investment managers,
pension plan sponsors, and bank trust departments. These services
include portfolio evaluation, performance measurement and consulting
services ("Funds Evaluation") and automated execution, clearing and
settlement of securities transactions ("MarketLink").
(b) Furnish the Information required by the following table with respect to
each director, officer or partner of each principal underwriter named
in the answer to Item 21 of Part B. Unless otherwise noted, the
business address of each director or officer is 680 East Swedesford
Road, Wayne, PA 19087.
<TABLE>
<CAPTION>
Position and Office Positions and Offices
Name with Underwriter with Registrant
- ---- ------------------- ---------------------
<S> <C> <C>
Alfred P. West, Jr. Director, Chairman & Chief Executive Officer --
Henry H. Greer Director, President & Chief Operating Officer --
Carmen V. Romeo Director, Executive Vice President & Treasurer --
Gilbert L. Beebower Executive Vice President --
Richard B. Lieb Executive Vice President,
President -- Investment Services Division --
</TABLE>
C-14
<PAGE>
<TABLE>
<CAPTION>
Position and Office Positions and Offices
Name with Underwriter with Registrant
- ---- ------------------- ---------------------
<S> <C> <C>
Leo J. Dolan, Jr. Senior Vice President --
Carl A. Guarino Senior Vice President --
Jerome Hickey Senior Vice President --
David G. Lee Senior Vice President President
William Madden Senior Vice President --
A. Keith McDowell Senior Vice President --
Dennis J. McGonigle Senior Vice President --
Hartland J. McKeown Senior Vice President --
James V. Morris Senior Vice President --
Steven Onofrio Senior Vice President --
Kevin P. Robins Senior Vice President, General Counsel & Secretary Vice President &
Assistant Secretary
Robert Wagner Senior Vice President --
Patrick K. Walsh Senior Vice President --
Kenneth Zimmer Senior Vice President --
Robert Aller Vice President --
Steve Bendinelli Vice President --
Marc H. Cahn Vice President & Assistant Secretary --
Gordon W. Carpenter Vice President --
Todd Cipperman Vice President & Assistant Secretary Vice President &
Assistant Secretary
Robert Crudup Vice President & Managing Director --
Ed Daly Vice President --
Jeff Drennen Vice President --
Mick Duncan Vice President & Team Leader --
Vic Galef Vice President & Managing Director --
Kathy Heilig Vice President --
Larry Hutchison Vice President --
Michael Kantor Vice President --
Samuel King Vice President --
Kim Kirk Vice President & Managing Director --
Donald H. Korytowski Vice President --
John Krzeminski Vice President & Managing Director --
Robert S. Ludwig Vice President & Team Leader --
Vicki Malloy Vice President & Team Leader --
Jack May Vice President --
Carolyn McLaurin Vice President & Managing Director --
Barbara Moore Vice President & Managing Director --
W. Kelso Morrill Vice President --
Barbara A. Nugent Vice President & Assistant Secretary --
Sandra K. Orlow Vice President & Assistant Secretary Vice President &
Assistant Secretary
Donald Pepin Vice President & Managing Director --
Larry Pokora Vice President --
Kim Rainey Vice President --
Paul Sachs Vice President --
Mark Samuels Vice President & Managing Director --
Steve Smith Vice President --
Daniel Spaventa Vice President --
Kathryn L. Stanton Vice President & Assistant Secretary Vice President &
Assistant Secretary
</TABLE>
C-15
<PAGE>
<TABLE>
<CAPTION>
Position and Office Positions and Offices
Name with Underwriter with Registrant
- ---- ------------------- ---------------------
<S> <C> <C>
Wayne M. Withrow Vice President & Managing Director --
William Zawaski Vice President --
James Dougherty Director of Brokerage Services --
</TABLE>
Item 30. Location of Accounts and Records
(1) CoreStates Investment Advisers, Inc., PNB Building, Broad and
Chestnut Streets, Philadelphia, PA 19101 (records relating to its
functions as investment adviser).
(2) SEI Financial Management Corporation, 680 E. Swedesford Road, Wayne,
PA 19087 (records relating to its function as administrator).
(3) SEI Financial Services Corporation, 680 E. Swedesford Road, Wayne,
PA 19087 (records relating to its function as distributor).
(4) CoreStates Bank, N.A., 510 Walnut Street Mail Stop FC 1-9-7-2,
Philadelphia, PA 19106 (records relating to its functions as
custodian).
(5) State Street Bank and Trust Company, 225 Franklin Street, Boston,
MA 02110 (records relating to its functions as transfer agent).
(6) Morgan, Lewis & Bockius LLP, 2000 One Logan Square, Philadelphia,
PA 19103 (Articles of Incorporation, By-Laws, and Minute Books).
Item 31. Management Services
None.
Item 32. Undertakings
Registrant hereby undertakes that whenever shareholders meeting the
requirements of Section 16(c) of the Investment Company Act of 1940
inform the Board of Directors of their desire to communicate with
shareholders of the Registrant, the Directors will inform such
shareholders as to the approximate number of shareholders of record and
the approximate costs of mailing or afford said shareholders access to a
list of shareholders.
Registrant undertakes to hold a meeting of shareholders for the purpose of
voting upon the questions of removal of a Director(s) when requested in
writing to do so by the holders of at least 10% of Registrant's
outstanding shares and in connections with such Investment Company Act of
1940 relating to shareholder communications.
C-16
<PAGE>
Registrant undertakes to furnish each prospective person to whom a
prospectus will be delivered with a copy of the Registrant's latest annual
report to shareholders, when such annual report is issued containing
information called for by Item 5A of Form N-1A, upon request and without
charge.
<PAGE>
EXHIBIT INDEX
Exhibit No. Description of Exhibit
- ----------- ----------------------
11 Consent of Ernst & Young LLP
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, ("1933
Act"), and the Investment Company Act of 1940, as amended, the Registrant
certifies that it meets all of the requirements for effectiveness of this
Registration Statement pursuant to Rule 485(b) under the 1933 Act and has duly
caused this Post-Effective Amendment No. 29 to Registration Statement No.
2-93214 to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Wayne, Commonwealth of Pennsylvania on the 31st day
of July, 1996.
COREFUNDS, INC.
/s/ David G. Lee
----------------------------------------
David G. Lee
President
ATTEST: /s/ Stephen G. Meyer
---------------------------
Stephen G. Meyer
Controller
Pursuant to the requirements of the 1933 Act, this Post-Effective Amendment No.
29 to the Registration Statement has been signed below by the following persons
in the capacities and on the date(s) indicated.
/s/David G. Lee President & Chief July 31 , 1996
- ---------------- Executive Officer
David G. Lee
* Director July 31 , 1996
- ----------------------
Erin Anderson
* Director July 31 , 1996
- ----------------------
Emil J. Mikity
* Director July 31 , 1996
- ----------------------
George H. Strong
* Director July 31 , 1996
- ----------------------
Cheryl H. Wade
* Director July 31 , 1996
- ----------------------
Thomas J. Taylor
<PAGE>
/s/ Stephen G. Meyer Controller July 31, 1996
- ---------------------
Stephen G. Meyer
* Treasurer & July 31, 1996
- ---------------------- Assistant Secretary
Carmen V. Romeo
*By: /s/ David G. Lee
------------------------
David G. Lee
Attorney-in-Fact
<PAGE>
CONSENT OF INDEPENDENT AUDITORS
We consent to the references to our firm under the captions "Financial
Highlights" in the Prospectus and "Financial Statements" in the Statement of
Additional Information for the Equity Index Fund and to the incorporation by
reference in this Post-Effective Amendment No. 29 to the Registration Statement
(Form N-1A No. 33-93214) dated August 14, 1996 of CoreFunds, Inc. of our report
dated August 14, 1995, included in the 1995 Annual Report to Shareholders of
CoreFunds, Inc.
/s/ Ernst & Young LLP
----------------------
Ernst & Young LLP
Philadelphia, Pennsylvania
August 12, 1996
