Filed Pursuant to Rule 497(b)
1933 Act No. 33-66503
IMPORTANT SHAREHOLDER INFORMATION
CONESTOGA FAMILY OF FUNDS
The document you hold in your hands contains your Combined Proxy
Statement/Prospectus and proxy card. A proxy card is, in essence, a ballot. When
you vote your proxy, it tells us how to vote on your behalf on important issues
relating to Conestoga. If you simply sign the proxy without specifying a vote,
your shares will be voted in accordance with the recommendations of the Board of
Trustees.
We urge you to spend a few minutes with the Combined Proxy
Statement/Prospectus, fill out your proxy card, and return it to us. Voting your
proxy, and doing so promptly, enables Conestoga to avoid conducting additional
mailings. When Shareholders do not return their proxies in sufficient numbers,
the Funds may bear the expense of follow-up solicitations.
Please take a few moments to exercise your right to vote. Thank you.
The Combined Proxy Statement/Prospectus constitutes the Proxy Statement of
Conestoga Family of Funds for the meeting of its shareholders. It also
constitutes the Prospectus of CoreFunds, Inc. for eight of its portfolios which
are to issue shares in connection with the proposed reorganization -- the Cash
Reserve, Tax-Free Reserve, Treasury Reserve, Value Equity Fund, Intermediate
Bond Fund, Pennsylvania Municipal Bond Fund, Balanced Fund and International
Growth Fund. This document does not constitute a Prospectus for three newly
organized portfolios of CoreFunds, Inc. that are to issue shares in the
reorganization because they will be deemed to continue the operations of the
acquired Conestoga portfolios; they are the Special Equity Fund, Bond Fund and
Short-Term Income Fund.
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THE CONESTOGA FAMILY OF FUNDS
680 EAST SWEDESFORD ROAD
WAYNE, PENNSYLVANIA 19087-1658
February 15, 1996
Dear Conestoga Funds Shareholder:
The Board of Trustees of The Conestoga Family of Funds is pleased to call a
Special Meeting of Shareholders, to be held at 10:00 a.m., on March 22, 1996, at
The Wilmington Hilton, 630 Naamans Road, Wilmington, Delaware.
As you may know, CoreStates Financial Corp ('CoreStates') and Meridian
Bancorp, Inc. ('Meridian') recently announced a plan to merge, in a transaction
expected to close during the second quarter of 1996. Meridian Bancorp, Inc., is
the parent company of the investment adviser to the Conestoga Funds. In
anticipation of the consummation of that merger, management of both companies
deemed it wise to consider the consolidation of the mutual fund investment
advisory activities of Meridian and CoreStates into one entity. Similarly, it
was deemed appropriate to consider the merger of the Conestoga Funds into
CoreFunds, Inc. ('CoreFunds'), an open-end management investment company, in
order to create one consolidated family of mutual funds and offer Shareholders
more investment options in an efficient manner. The Conestoga Funds Board of
Trustees believes that these actions are in the best interests of the Conestoga
Funds' Shareholders.
The Conestoga Board of Trustees has carefully reviewed the proposal to
combine all portfolios of The Conestoga Family of Funds with the CoreFunds'
portfolios with similar investment objectives and policies (the 'Transaction'),
and has considered the effects of this Transaction on Shareholder value with
respect to investment performance, expenses levels, and Shareholder services.
The Board of Trustees has also considered the interim advisory and sub-advisory
agreements for the Funds that are described in the attached materials if the
merger of CoreStates Financial Corp and Meridian Bancorp, Inc. occurs before the
Funds' consolidations, as is expected. In light of their consideration, the
Board of Trustees unanimously recommends the approval of the Transaction. As you
evaluate the proposal, please note the following points:
o The dollar value of your investment in the Conestoga Funds before the
Transaction will NOT change, and will be the same immediately after the
transaction although the Funds you have invested in, as well as the
number of shares and the net asset value of each share, may be different.
o The Transaction will be tax-free and will not involve any sales loads,
commissions or transaction charges.
o The investment objective and policies of your new portfolio will be
substantially similar to your portfolio's current objective and policies,
except as noted in the enclosed Combined Proxy Statement/Prospectus.
o The CoreFunds service providers have agreed to waive fees and reimburse
expenses for a period of one year after the reorganization, if necessary,
to ensure that the operating expenses of the CoreFunds portfolios are
limited to the ratios stated in the Combined Proxy Statement/Prospectus.
THE BOARD OF TRUSTEES RECOMMENDS THE APPROVAL OF THIS TRANSACTION IN LIGHT
OF THE FOLLOWING SHAREHOLDER BENEFITS:
o The Transaction will result in a broader array of investment
opportunities available to Shareholders.
o Existing purchase and redemption features will remain in place.
o There is the potential for economies of scale in portfolio management
resulting from the larger asset size.
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A proxy card is enclosed for your use in the Shareholder Meeting. This card
represents shares you held as of the record date, January 26, 1996. IT IS
IMPORTANT THAT YOU COMPLETE, SIGN, AND RETURN YOUR PROXY CARD IN THE ENVELOPE
PROVIDED AS SOON AS POSSIBLE. This will ensure that your shares will be
represented at the Shareholders Meeting to be held on March 22, 1996.
Sincerely,
Thomas J. Taylor
Chairman of the Board
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CONESTOGA FAMILY OF FUNDS
680 EAST SWEDESFORD ROAD
WAYNE, PENNSYLVANIA 19087-1658
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD ON MARCH 22, 1996
To Conestoga Shareholders:
NOTICE IS HEREBY GIVEN THAT a Special Meeting of the Shareholders
('Shareholders') of each Portfolio of the Conestoga Family of Funds
('Conestoga') will be held at The Wilmington Hilton, 630 Naamans Road,
Wilmington, Delaware, on March 22, 1996 at 10:00 a.m. (Eastern time) for the
following purposes:
ITEM 1. With respect to each investment portfolio (a 'Conestoga
Portfolio') of Conestoga:
To consider and act upon a proposal to approve an Agreement and Plan
of Reorganization (the 'Reorganization Agreement') and the transactions
contemplated thereby, including (a) the transfer of substantially all of
the assets and liabilities of the Cash Management Fund, Tax-Free Fund, U.S.
Treasury Securities Fund, Equity Fund, Special Equity Fund, Bond Fund,
Intermediate Income Fund, Pennsylvania Tax-Free Bond Fund, Balanced Fund,
Short-Term Income Fund and International Equity Fund to corresponding
investment portfolios (the 'CoreFunds Portfolios') of CoreFunds, Inc. in
exchange for Institutional and Individual shares, as applicable, of the
CoreFunds Portfolios; (b) the distribution of such CoreFunds Portfolio
shares to the shareholders of the Conestoga Portfolios according to their
respective interests; (c) the approval of an interim investment advisory
agreement for the Conestoga Portfolios, and an interim sub-advisory
agreement for the Conestoga International Equity Fund, if the merger of
Meridian Bancorp, Inc. and CoreStates Financial Corp occurs before the
closing of the proposed reorganization; and (d) the termination under state
law and the Investment Company Act of 1940, as amended, of Conestoga.
ITEM 2. With respect to each Conestoga Portfolio:
To transact such other business as may properly come before the
Special Meeting or any adjournment(s) thereof.
The proposed reorganization and related matters are described in the
attached Combined Proxy Statement/Prospectus. Appendix I to the Combined Proxy
Statement/Prospectus is a copy of the Reorganization Agreement.
Shareholders of record as of the close of business on January 26, 1996 are
entitled to notice of, and to vote at, the Special Meeting or any adjournment(s)
thereof.
SHAREHOLDERS ARE REQUESTED TO EXECUTE AND RETURN PROMPTLY IN THE ENCLOSED
ENVELOPE THE ACCOMPANYING PROXY CARD WHICH IS BEING SOLICITED BY CONESTOGA'S
BOARD OF TRUSTEES. THIS IS IMPORTANT TO ENSURE A QUORUM AT THE SPECIAL MEETING.
PROXIES MAY BE REVOKED AT ANY TIME BEFORE THEY ARE EXERCISED BY SUBMITTING TO
CONESTOGA A WRITTEN NOTICE OF REVOCATION OR A SUBSEQUENTLY EXECUTED PROXY OR BY
ATTENDING THE SPECIAL MEETING AND VOTING IN PERSON.
Henry S. Hilles, Jr.
Secretary
February 6, 1996
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[THIS PAGE INTENTIONALLY LEFT BLANK.]
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COMBINED PROXY STATEMENT/PROSPECTUS
DATED FEBRUARY 6, 1996
CONESTOGA FAMILY OF FUNDS
680 EAST SWEDESFORD ROAD
WAYNE, PENNSYLVANIA 19087-1658
(800) 344-2716
COREFUNDS, INC.
680 EAST SWEDESFORD ROAD
WAYNE, PENNSYLVANIA 19087-1658
(800) 355-CORE
This Combined Proxy Statement/Prospectus is furnished in connection with
the solicitation of proxies by the Board of Trustees of the Conestoga Family of
Funds ('Conestoga') in connection with a Special Meeting (the 'Meeting') of
Shareholders ('Shareholders') to be held on March 22, 1996 at 10:00 a.m.
(Eastern time) at The Wilmington Hilton, 630 Naamans Road, Wilmington, Delaware,
at which Shareholders will be asked to consider and approve a proposed Agreement
and Plan of Reorganization dated February 8, 1996 (the 'Reorganization
Agreement'), by and between Conestoga and CoreFunds, Inc. ('CoreFunds') and the
matters contemplated therein. A copy of the Reorganization Agreement is attached
as Appendix I.
Conestoga and CoreFunds are both open-end, management investment companies.
Meridian Investment Company ('MIC') currently provides investment advisory
services to Conestoga. CoreStates Investment Advisers, Inc. ('CoreStates
Advisers') provides investment advisory services to CoreFunds. In reviewing the
proposed reorganization (the 'Reorganization'), the Conestoga Board considered
the pending merger of Meridian Bancorp, Inc., the parent company of MIC, and
CoreStates Financial Corp, the parent company of CoreStates Advisers (the
'Holding Company Merger'); the effect of such merger on Conestoga; the
recommendations of MIC and CoreStates Advisers with respect to the proposed
consolidation of Conestoga and CoreFunds; the fact that the Reorganization would
constitute a tax-free reorganization; and the fact that the interests of
Shareholders would not be diluted as a result of the Reorganization.
The Reorganization Agreement provides that initially each of the following
eight investment portfolios of Conestoga (collectively, the 'Reorganizing
Portfolios') will transfer substantially all its assets and known liabilities to
the existing CoreFunds investment portfolio (collectively, the 'Existing
CoreFunds Portfolios') identified below opposite its name:
REORGANIZING PORTFOLIOS EXISTING COREFUNDS PORTFOLIOS
- ----------------------------------- -----------------------------
Cash Management Fund Cash Reserve
Tax-Free Fund Tax-Free Reserve
U.S. Treasury Securities Fund Treasury Reserve
Equity Fund Value Equity Fund
Intermediate Income Fund Intermediate Bond Fund
Pennsylvania Tax-Free Pennsylvania Municipal
Bond Fund Bond Fund
Balanced Fund Balanced Fund
International Equity Fund International Growth Fund
The Reorganization Agreement also provides that subsequently each of the
following three investment portfolios of Conestoga (collectively, the
'Continuing Portfolios') will transfer all its assets and known liabilities to
the newly-organized CoreFunds investment portfolio (collectively, the 'New
CoreFunds Portfolios') identified below opposite its name:
CONTINUING PORTFOLIOS NEW COREFUNDS PORTFOLIOS
- ----------------------------------- -----------------------------
Special Equity Fund Special Equity Fund
Bond Fund Bond Fund
Short-Term Income Fund Short-Term Income Fund
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In exchange for the transfers of these assets and liabilities, CoreFunds
will issue shares in the eleven CoreFunds investment portfolios listed above
(collectively, the 'CoreFunds Portfolios') to the corresponding Conestoga
investment portfolios listed above (collectively, the 'Conestoga Portfolios').
The initial transaction between the Reorganizing Portfolios and the Existing
CoreFunds Portfolios is referred to herein as the 'Reorganizing Portfolios
Transaction' and the subsequent transaction between the Continuing Portfolios
and the New CoreFunds Portfolios is referred to herein as the 'Continuing
Portfolios Transaction.' The transactions are expected to occur on or after
April 8, 1996 and April 15, 1996, respectively.
The Conestoga Portfolios have two classes of shares outstanding, as do the
CoreFunds Portfolios. Holders of each class of shares of a Conestoga Portfolio
will receive the class of shares of the corresponding CoreFunds Portfolio as set
forth in the table on pages 29 and 30 under 'Information Relating to the
Proposed Reorganization -- Description of the Reorganization Agreement.'
The Conestoga Portfolios will make liquidating distributions of the
CoreFunds Portfolios' shares to the Shareholders of the Conestoga Portfolios, so
that a holder of a class of shares in a Conestoga Portfolio will receive a class
of Shares (as described herein) of the corresponding CoreFunds Portfolio with
the same aggregate net asset value as the Shareholder had in the Conestoga
Portfolio immediately before the transaction. Following the Reorganization,
Shareholders of the Conestoga Portfolios will be Shareholders of their
corresponding CoreFunds Portfolios, and Conestoga will be terminated under state
law and the Investment Company Act of 1940, as amended.
The Existing CoreFunds Portfolios currently are conducting investment
operations as described in this Combined Proxy Statement/Prospectus. The New
CoreFunds Portfolios have recently been organized for the purpose of continuing
the investment operations of the Conestoga Special Equity Fund, Bond Fund and
Short-Term Income Fund.
The Reorganization Agreement provides that Conestoga will enter into an
interim investment advisory agreement with MIC (or its successor), and that MIC
will enter into an interim sub-advisory agreement with Marvin and Palmer
Associates, Inc. for the Conestoga International Equity Fund. The interim
advisory agreement, and the sub-advisory agreement for the International Equity
Fund, will be in effect for the Reorganizing Portfolios between the Holding
Company Merger and the consummation of the Reorganizing Portfolios Transaction.
The interim advisory agreement will be in effect for the Continuing Portfolios
between the Holding Company Merger and the consummation of the Continuing
Portfolios Transaction. The interim advisory and sub-advisory agreements will
contain substantially the same terms as Conestoga's current investment advisory
and sub-advisory agreements.
This Combined Proxy Statement/Prospectus sets forth the information that a
Shareholder of Conestoga should know before voting on the Reorganization
Agreement (and related transactions), and should be retained for future
reference. The Prospectuses relating to the shares of the Existing CoreFunds
Portfolios, which describe the operations of those Funds, accompany this
Combined Proxy Statement/Prospectus. Additional information is set forth in the
Statements of Additional Information relating to those Funds and this Combined
Proxy Statement/Prospectus, which are dated November 1, 1995 and February 6,
1996, respectively, and in the Prospectuses and Statement of Additional
Information, dated February 21, 1995 (as revised November 3, 1995) and May 1,
1995 (as revised November 3, 1995), respectively, relating to Conestoga. Each of
these documents is on file with the Securities and Exchange Commission (the
'SEC'), and is available without charge upon oral or written request by writing
or calling either Conestoga or CoreFunds at the respective addresses or
telephone numbers indicated above. The information contained in the Prospectuses
and Statement of Additional Information, dated February 21, 1995 (as revised
November 3, 1995) and May 1, 1995 (as revised November 3, 1995), respectively,
relating to Conestoga is incorporated herein by reference.
This Combined Proxy Statement/Prospectus constitutes the Proxy Statement of
Conestoga for the meeting of its Shareholders, and CoreFunds' Prospectus for the
shares of its Existing CoreFunds Portfolios that have been registered with the
SEC and are to be issued in connection with the Reorganization. Because the New
CoreFunds Portfolios will be deemed to be continuations of the Continuing
Portfolios, this Combined Proxy Statement/Prospectus does not constitute a
prospectus for the shares that will be issued in the Continuing Portfolios
Transaction.
This Combined Proxy Statement/Prospectus is expected to first be sent to
Shareholders on or about February 15, 1996.
<PAGE>
THE SECURITIES OF THE COREFUNDS PORTFOLIOS 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 COMBINED
PROXY STATEMENT/PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS COMBINED PROXY
STATEMENT/PROSPECTUS AND IN THE MATERIALS EXPRESSLY INCORPORATED HEREIN BY
REFERENCE AND, IF GIVEN OR MADE, SUCH OTHER INFORMATION OR REPRESENTATIONS MUST
NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY CONESTOGA OR COREFUNDS.
SHARES OF THE COREFUNDS PORTFOLIOS ARE NOT DEPOSITS OR OBLIGATIONS OF, OR
GUARANTEED OR ENDORSED BY, CORESTATES BANK, N.A., THE PARENT CORPORATION OF EACH
OF THE COREFUNDS PORTFOLIOS' INVESTMENT ADVISER, OR ANY OF ITS AFFILIATES.
SHARES OF THE COREFUNDS PORTFOLIOS ARE NOT FEDERALLY INSURED BY, GUARANTEED BY,
OBLIGATIONS OF OR OTHERWISE SUPPORTED BY THE U.S. GOVERNMENT, THE FEDERAL
DEPOSIT INSURANCE CORPORATION, THE FEDERAL RESERVE BOARD OR ANY OTHER
GOVERNMENTAL AGENCY. INVESTMENT RETURN AND PRINCIPAL VALUE WILL VARY AS A RESULT
OF MARKET CONDITIONS OR OTHER FACTORS SO THAT SHARES OF THE COREFUNDS
PORTFOLIOS, WHEN REDEEMED, MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL COST.
AN INVESTMENT IN THE COREFUNDS PORTFOLIOS INVOLVES INVESTMENT RISKS, INCLUDING
POSSIBLE LOSS OF PRINCIPAL AMOUNT INVESTED. THERE IS NO ASSURANCE THAT THE
COREFUNDS CASH RESERVE, TAX-FREE RESERVE OR TREASURY RESERVE WILL BE ABLE TO
MAINTAIN A STABLE NET ASSET VALUE OF $1.00 PER SHARE.
i
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TABLE OF CONTENTS
<TABLE>
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PAGE
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Summary.................................................................................................... 1
Proposed Reorganization............................................................................... 1
Reasons for the Reorganization........................................................................ 1
Federal Income Tax Consequences....................................................................... 1
Overview of the Conestoga Portfolios and CoreFunds Portfolios......................................... 2
Voting Information.................................................................................... 28
Risk Factors.......................................................................................... 28
Information Relating to the Proposed Reorganization........................................................ 29
Description of the Reorganization Agreement........................................................... 29
Capitalization........................................................................................ 32
Federal Income Tax Consequences....................................................................... 34
Comparison of Investment Policies and Risk Factors......................................................... 35
Conestoga Cash Management Fund and CoreFunds Cash Reserve............................................. 35
Conestoga U.S. Treasury Securities Fund and CoreFunds Treasury Reserve................................ 35
Conestoga Tax-Free Fund and CoreFunds Tax-Free Reserve................................................ 36
Conestoga Equity Fund and CoreFunds Value Equity Fund................................................. 36
Conestoga Intermediate Income Fund and CoreFunds Intermediate Bond Fund............................... 38
Conestoga Pennsylvania Tax-Free Bond Fund and CoreFunds Pennsylvania Municipal Bond Fund.............. 38
Conestoga Balanced Fund and CoreFunds Balanced Fund................................................... 39
Conestoga International Equity Fund and CoreFunds International Growth Fund........................... 39
Investment Policies and Risks -- General.............................................................. 40
ii
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Investment Limitations................................................................................ 41
Purchase and Redemption Information, Exchange Privileges, Distribution and Pricing.................... 43
Other Information..................................................................................... 43
Interim Investment Advisory and Sub-Advisory Agreements.................................................... 45
Information Relating to Voting Matters..................................................................... 47
General Information................................................................................... 47
Shareholder and Board Approvals....................................................................... 47
Appraisal Rights...................................................................................... 57
Quorum................................................................................................ 57
Annual Meetings....................................................................................... 58
Additional Information about CoreFunds..................................................................... 58
Additional Information about Conestoga..................................................................... 60
Additional Information about the Investment Adviser and Sub-Adviser........................................ 62
Litigation................................................................................................. 66
Financial Highlights....................................................................................... 66
Financial Statements....................................................................................... 73
Other Business............................................................................................. 73
Shareholder Inquiries...................................................................................... 73
Appendix I -- Agreement and Plan of Reorganization........................................................ A-1
Appendix II -- Existing CoreFunds Portfolios Management Discussion and Analysis........................... B-1
Appendix III -- Shareholders Transactions and Services..................................................... C-1
Appendix IV -- Interim Investment Advisory and Sub-Advisory Agreements..................................... D-1
</TABLE>
iii
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SUMMARY
The following is a summary of certain information relating to the proposed
Reorganization, the parties thereto and the related transactions, and is
qualified by reference to the more complete information contained elsewhere in
this Combined Proxy Statement/Prospectus, the prospectuses and statements of
additional information of Conestoga and CoreFunds, and the Reorganization
Agreement attached to this Combined Proxy Statement/Prospectus as Appendix I.
Conestoga's Annual Report to Shareholders may be obtained free of charge by
calling 1-800-344-2716 or writing 680 East Swedesford Road, Wayne, Pennsylvania
19087-1658. CoreFunds Annual Report to Shareholders may be obtained free of
charge by calling 1-800-355-CORE or writing 680 East Swedesford Road, Wayne,
Pennsylvania 19087-1658.
PROPOSED REORGANIZATION. Based upon their evaluation of the relevant
information presented to them, and in light of their fiduciary duties under
federal and state law, Conestoga's and CoreFunds' Boards, including their
members who are not 'interested persons' within the meaning of the Investment
Company Act of 1940 (the '1940 Act'), have determined that the proposed
Reorganization is in the best interests of Conestoga's and CoreFunds'
Shareholders, respectively, and that the interests of existing Shareholders of
Conestoga and CoreFunds, respectively, will not be diluted as a result of such
Reorganization.
The Holding Company Merger is expected to precede the Reorganization.
Because this merger will result in a change in control of MIC, the existing
investment advisory and sub-advisory agreements for Conestoga will, by their
terms, automatically terminate upon the Holding Company Merger. The
Reorganization Agreement provides that Conestoga will enter into an interim
investment advisory agreement with MIC (or its successor) and that MIC will
enter into an interim sub-advisory agreement with Marvin and Palmer Associates,
Inc. ('Marvin and Palmer') for the Conestoga International Equity Fund. The
interim advisory agreement, and the sub-advisory agreement for the International
Equity Fund, will be in effect for the Reorganizing Portfolios between the
Holding Company Merger and the consummation of the Reorganizing Portfolios
Transaction. The interim advisory agreement will be in effect for the Continuing
Portfolios between the Holding Company Merger and the consummation of the
Continuing Portfolios Transaction. The provisions of the interim advisory and
sub-advisory agreements, including the fee rates, will be the same as those of
the existing advisory and sub-advisory agreements. See 'Interim Investment
Advisory and Sub-Advisory Agreements' below.
The Cover Page and pages 1-28 hereof summarize the proposed Reorganization,
including the interim investment advisory and sub-advisory agreements.
REASONS FOR THE REORGANIZATION. The primary reason for the Reorganization
is the pending merger between Meridian Bancorp, Inc., the parent of MIC, and
CoreStates Financial Corp. If this merger is completed, the currently existing
investment advisory contract between the Conestoga Portfolios and MIC, would be
terminated. MIC and CoreStates Advisers have recommended that each of the
Conestoga Portfolios be reorganized as described in this Combined Proxy
Statement/Prospectus shortly after the proposed merger of the bank holding
companies. In light of this recommendation, after consideration of the reasons
therefor and the proposed operations of the combined funds after the
Reorganization, and in consideration of the fact that the Reorganization will be
tax-free and will not dilute the interests of Conestoga Shareholders, the Board
of Trustees of Conestoga has authorized the Agreement and Plan of Reorganization
and recommended approval of the Reorganization by Shareholders.
FEDERAL INCOME TAX CONSEQUENCES. Shareholders of the Conestoga Portfolios
will recognize no gain or loss for federal income tax purposes on their receipt
of shares of the CoreFunds Portfolios. Shareholders of the CoreFunds Portfolios
will have no tax consequence from the Reorganization. The Conestoga Portfolios
will incur no federal tax purposes on their issuance of shares in the
Reorganization. See 'Information Relating to the Proposed Reorganization --
Federal Income Tax Consequences.'
1
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OVERVIEW OF THE CONESTOGA PORTFOLIOS AND COREFUNDS PORTFOLIOS. There are
no material differences between the investment objectives and policies of the
Continuing Portfolios and the corresponding New CoreFunds Portfolios. The
investment objectives and policies of the Reorganizing Portfolios are similar to
those of the corresponding Existing CoreFunds Portfolios.
CONESTOGA CASH MANAGEMENT FUND AND COREFUNDS CASH RESERVE.
The Conestoga Cash Management Fund's investment objective is to seek
current income with liquidity and stability of principal. CoreFunds Cash
Reserve's investment objective is to provide as high a level of current income
as is consistent with liquidity and relative stability of principal. Each
pursues its investment objective by investing in a diversified portfolio of high
quality money market instruments.
CONESTOGA TAX-FREE FUND AND COREFUNDS TAX-FREE RESERVE.
The Conestoga Tax-Free Fund's investment objective is to seek current
income which is exempt from regular federal income tax with liquidity and
stability of principal. CoreFunds Tax-Free Reserve's investment objective is to
provide as high a level of current interest income that is exempt from federal
income taxes as is consistent with liquidity and relative stability of
principal. Both Funds intend, under normal market conditions, to invest at least
80% of their assets in short-term, high quality municipal obligations, the
interest on which is exempt from regular federal income tax. CoreFunds Tax-Free
Reserve intends to invest, when possible, its assets in municipal securities
exempt from Pennsylvania income taxation.
CONESTOGA U.S. TREASURY SECURITIES FUND AND COREFUNDS TREASURY RESERVE.
The Conestoga U.S. Treasury Securities Fund's investment objective is to
seek current income with liquidity and stability of principal. CoreFunds
Treasury Reserve's investment objective is to provide current interest income,
liquidity and safety of principal. Each pursues its investment objective by
investing in short-term obligations of the U.S. Treasury and in repurchase
agreements relating to such Treasury obligations.
CONESTOGA EQUITY FUND AND COREFUNDS VALUE EQUITY FUND.
The investment objective of the Conestoga Equity Fund is to seek capital
growth by investing principally in a diversified portfolio of common stocks of
companies with large, medium or small capitalizations. The investment objective
of CoreFunds Value Equity Fund is to provide maximum total return, including
capital appreciation and investment income, in excess of stock market indices
such as the S&P 500 Index, as measured over a period of time. CoreFunds Value
Equity Fund expects to change its name and investment policies before the
Reorganizing Portfolios Transaction to more closely resemble the investment
policies of the Conestoga Equity Fund.
CONESTOGA INTERMEDIATE INCOME FUND AND COREFUNDS INTERMEDIATE BOND FUND.
The Conestoga Intermediate Income Fund's primary investment objective is to
seek current income by investing principally in a diversified portfolio of debt
securities with expected or remaining maturities of ten years or less, and its
secondary objective is to seek capital growth. The CoreFunds Intermediate Bond
Fund's investment objective is to provide a moderate level of current income
consistent with conservation of capital, by investing substantially all of its
assets in a diversified portfolio of intermediate-term, fixed income obligations
which will have an expected average weighted maturity of one to five years.
CoreFunds Intermediate Bond Fund expects to change its name before the
Reorganizing Portfolios Transaction to 'CoreFunds Short Intermediate Bond Fund'
to more accurately reflect the manner in which the Fund is being managed.
CONESTOGA PENNSYLVANIA TAX-FREE BOND FUND AND COREFUNDS PENNSYLVANIA MUNICIPAL
BOND FUND.
The Conestoga Pennsylvania Tax-Free Bond Fund's investment objective is to
seek a high level of current income consistent with the preservation of capital,
which income is exempt from federal individual income tax and, to the extent
possible, from Pennsylvania state and local personal income
2
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tax, and is not a tax preference item under the federal alternative minimum tax.
CoreFunds Pennsylvania Municipal Bond Fund seeks current income exempt from
federal and Pennsylvania income taxation with preservation of capital by
investing primarily in a non-diversified portfolio of municipal securities.
CONESTOGA BALANCED FUND AND COREFUNDS BALANCED FUND.
The Conestoga Balanced Fund's investment objective is to seek a balance of
capital appreciation and current income consistent with the preservation of
capital. CoreFunds Balanced Fund's investment objective is to provide total
return while preserving capital. Both Funds pursue their objective by investing
in a combination of equity and fixed income securities.
CONESTOGA INTERNATIONAL EQUITY FUND AND COREFUNDS INTERNATIONAL GROWTH FUND.
The Conestoga International Equity Fund's investment objective is to seek
long-term growth of capital. CoreFunds International Growth Fund's investment
objective is long-term capital appreciation, consistent with reasonable risk.
Both Funds invest at least 65% of their total assets in diversified portfolios
of equity securities of issuers located outside of the United States.
See 'Comparison of Investment Policies and Risk Factors' below and the
Conestoga and CoreFunds Prospectuses, which are incorporated by reference
herein, for a description of the similarities and differences between the
investment objectives and policies of the Reorganizing Portfolios and the
corresponding Existing CoreFunds Portfolios.
CERTAIN ARRANGEMENTS WITH SERVICE PROVIDERS -- THE CONESTOGA PORTFOLIOS.
MIC serves as investment adviser for Conestoga and is entitled to receive
advisory fees from them, computed daily and paid monthly, at the following
annual rates, expressed as a percentage of average daily net assets:
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<CAPTION>
ACTUAL ADVISORY
FEE FOR YEAR
ENDED OCTOBER 31,
CONESTOGA PORTFOLIOS ADVISORY FEE 1995 (AFTER WAIVERS)
- -------------------------------------------------------------------------------- --------------- ---------------------
<S> <C> <C>
Cash Management Fund............................................................ 0.40% 0.20%
Tax-Free Fund................................................................... 0.40% 0.16%
U.S. Treasury Securities Fund................................................... 0.40% 0.27%
Equity Fund..................................................................... 0.74% 0.74%
Special Equity Fund............................................................. 1.50% 0%
Bond Fund....................................................................... 0.74% 0.34%
Intermediate Income Fund........................................................ 0.74% 0.25%
Pennsylvania Tax-Free Bond Fund................................................. 0.74% 0%
Short-Term Income Fund.......................................................... 0.74% 0.29%
Balanced Fund................................................................... 0.75% 0.49%
International Equity Fund....................................................... 1.00% 1.00%
</TABLE>
- --------------------------------------------------------------------------------
Pursuant to the Conestoga investment advisory contract, MIC provides
investment research and management to Conestoga and conducts a continuous
investment program. MIC also directs the
3
<PAGE>
investments of the Conestoga Portfolios in accordance with each Portfolio's
investment objectives, policies and limitations, and creates and maintains all
necessary books and records.
Marvin and Palmer provides sub-advisory services to the International
Equity Fund under a sub-advisory agreement between MIC and Marvin and Palmer.
The sub-adviser assists MIC in providing a continuous investment program for the
International Equity Fund, including investment research and management with
respect to all securities and investments and cash equivalents of the portfolio.
The sub-adviser provides the services under this agreement in accordance with
the International Equity Fund's investment objective, policies, and limitations.
For the services provided as the International Equity Fund's sub-adviser, Marvin
and Palmer is entitled to receive a fee from MIC, computed daily and paid
monthly, at the annual rate of .75% of the first $100 million of the Fund's
average daily net assets, .70% of the next $100 million of the Fund's average
daily net assets, .65% of the third $100 million of the Fund's average daily net
assets, and .60% of the Fund's average daily net assets in excess of $300
million.
Since May 1, 1995, administrative services have been provided to Conestoga
by SEI Financial Management Corporation ('SFM') a wholly-owned subsidiary of SEI
Corporation ('SEI'). For its services, SFM receives a fee, calculated daily and
paid monthly, at the annual rate of .17% of the average aggregate daily net
assets of each Conestoga Portfolio. For the period May 1, 1995, through the end
of Conestoga's fiscal year (i.e., October 31, 1995), SFM received administration
fees (after fee waivers) at the effective annual rates of 0.17%, 0.17%, 0.15%,
0.12%, 0.12%, 0.16%, 0.17%, 0.17%, 0.17%, 0.17% and 0.17% of the average daily
net assets of the Cash Management, Tax-Free, U.S. Treasury Securities, Equity,
Special Equity, Bond, Intermediate Income, Pennsylvania Tax-Free Bond,
Short-Term Income, Balanced and International Equity Funds, respectively. Prior
to May 1, 1995, administrative services were provided to Conestoga by The
Winsbury Company ('Winsbury'). For its services, Winsbury received a fee,
calculated daily and paid monthly, at the annual rate of .20% of the average
daily net assets of each Conestoga Portfolio. For the fiscal period November 1,
1994 through April 30, 1995, Winsbury received administration fees, net of
voluntary fee reductions, at the effective annual rates of 0.20%, 0.09%, 0.20%,
0.20%, 0.09%, 0.16%, 0.15% and 0.10% of the average daily net assets of the Cash
Management, Tax-Free, U.S. Treasury Securities, Equity, Special Equity, Bond,
Intermediate Income and Pennsylvania Tax-Free Bond Funds, respectively. The
Short-Term Income, Balanced and International Equity Funds had not commenced
investment operations prior to May 1, 1995.
SFM also serves as Conestoga's transfer agent and State Street Bank and
Trust Company serves as sub-transfer agent for Conestoga pursuant to an
agreement with the administrator. For these services, SFM receives an annual fee
equal to .02% of each Conestoga Portfolio's total assets, an annual per
shareholder account charge of $25 per account, plus out-of-pocket expenses.
Citibank, N.A. provides custodial services to each Conestoga Portfolio
except the International Equity Fund. The Bank of New York provides custodial
services to the International Equity Fund. It is anticipated that on or about
March 7, 1996, CoreStates Bank, N.A. will begin providing custodial services to
each Conestoga Portfolio except the International Equity Portfolio.
SEI Financial Services Company ('SFS') is the principal distributor for
Conestoga. Under the distribution agreement, SFS acts as the agent of Conestoga
in connection with the offering of shares of each Conestoga Portfolio.
Conestoga has adopted a Distribution and Services Plan pursuant to Rule
12b-1 under the 1940 Act (the 'Conestoga 12b-1 Plan'). Under the Conestoga 12b-1
Plan, the class of shares known as the Retail Shares of each of the Conestoga
Portfolios bears the expense of distribution fees payable to SFS at an annual
rate of up to .40% of the average daily net asset value of such Portfolio's
outstanding Retail Shares to finance activities which are principally intended
to result in the sale of Retail Shares. SFS may enter into agreements with
financial institutions and industry professionals which provide distribution
and/or administrative services as agents for their customers who beneficially
own Retail Shares. Services provided by such financial institutions may include,
without limitation: printing and distributing advertising and sales literature
and reports to shareholders used in connection with the sale of a Portfolio's
shares, and personnel and communication equipment used in servicing shareholder
accounts and prospective shareholder inquiries.
4
<PAGE>
The Conestoga 12b-1 Plan is a 'compensation' type plan as opposed to a
'reimbursement' type plan. Accordingly, payments by Retail Shares under the
Conestoga 12b-1 Plan are based on the expressed fee rather than on the specific
amounts expended by SFS for distribution purposes. SFS may be able to recover
such amounts or may earn a profit from payments made by Retail Shares of
Conestoga under the Conestoga 12b-1 Plan.
For the fiscal year ended October 31, 1995, Conestoga paid, in the
aggregate, fees to SFS pursuant to the Distribution and Services Plan of
$35,000, which represent 0.15% of the Conestoga Portfolios' Retail Shares
average net assets during that period.
CERTAIN ARRANGEMENTS WITH SERVICE PROVIDERS -- COREFUNDS PORTFOLIOS.
CoreStates Advisers, a wholly-owned subsidiary of CoreStates Bank which is
itself a wholly-owned subsidiary of CoreStates Financial Corp, serves as
investment adviser to CoreFunds and is entitled to receive advisory fees from
the CoreFunds Portfolios computed daily and paid monthly, at the following
annual rates, expressed as a percentage of average daily net assests:
<TABLE>
<CAPTION>
ACTUAL ADVISORY
FEE FOR YEAR ENDED
JUNE 30, 1995
COREFUNDS PORTFOLIOS ADVISORY FEE (AFTER WAIVERS)
- ----------------------------------------------------------------------------- ----------------- ---------------------
<S> <C> <C>
Cash Reserve................................................................. 0.40% 0.22%
Tax-Free Reserve............................................................. 0.40% 0.22%
Treasury Reserve............................................................. 0.40% 0.22%
Value Equity Fund............................................................ 0.74% 0.60%
Special Equity Fund.......................................................... 1.50% N/A*
Bond Fund.................................................................... 0.74% N/A*
Intermediate Bond Fund....................................................... 0.50% 0.35%
Pennsylvania Municipal Bond Fund............................................. 0.50% 0%
Short-Term Income Fund....................................................... 0.74% N/A*
Balanced Fund................................................................ 0.70% 0.45%
International Growth Fund.................................................... 0.80% 0.45%
</TABLE>
- ------------------
* These are new portfolios which have not commenced operations as of the date
hereof.
As investment adviser, CoreStates Advisers manages the investments of each
Portfolio, makes decisions with respect to and places orders for all purchases
and sales of a Portfolio's securities, and maintains certain records relating to
such purchases and sales.
CoreStates Advisers has delegated some of its investment management
functions with respect to the Value Equity Fund to Cashman, Farrell and
Associates ('Cashman, Farrell'), and with respect to the International Growth
Fund to Martin Currie, Inc. ('Martin Currie') and Aberdeen Trust, pursuant to
separate sub-advisory agreements between CoreStates Advisers and each of
Cashman, Farrell, Martin Currie and Aberdeen Trust. After the Reorganization, it
is expected that the sub-advisory agreement with Cashman, Farrell will be
terminated.
For the services provided as Value Equity Fund's sub-adviser, Cashman,
Farrell is entitled to receive a fee from CoreStates Advisers, computed daily
and paid monthly, at the annual rate of .50% of
5
<PAGE>
such Portfolio's average net assets. For the services provided as International
Growth Fund's sub-advisers, each of Martin Currie and Aberdeen Trust is entitled
to receive fees from CoreStates Advisers, computed daily and paid monthly, at
the annual rate of .50% of such Portfolio's average daily net assets under
management by such sub-adviser.
As sub-advisers to Value Equity Fund and International Growth Fund,
Cashman, Farrell, Martin Currie and Aberdeen Trust manage the investments of
their respective Portfolios, make decisions with respect to and place orders for
the majority of the purchases and sales of such Portfolio's securities, and
maintain certain records relating to such purchases and sales.
See 'Management -- Investment Adviser, Sub-Advisers' in CoreFunds'
Prospectuses accompanying this Combined Proxy Statement/Prospectus which are
incorporated herein by reference, for additional information on CoreFunds'
Adviser.
Administrative services are provided to CoreFunds by SFM. For its services,
SFM is entitled to receive a fee, computed daily and paid monthly, on a
Portfolio's average daily net assets at a rate of 0.25%. For the fiscal year
ended June 30, 1995, SFM received administration fees at the annual rate of
0.16% of the average daily net assets of each of the Value Equity, International
Growth, Balanced, Intermediate Bond, Cash Reserve, Treasury Reserve, and
Tax-Free Reserve Funds. For this same period, SFM waived all administration fees
with respect to the Pennsylvania Municipal Bond Fund. The Special Equity,
Short-Term Income and Bond Funds were not operational during this time period.
See 'Management -- Administrator' in CoreFunds' Prospectuses accompanying
this Combined Proxy/Prospectus, which are incorporated herein by reference, for
additional information on CoreFunds' administrator.
State Street Bank and Trust Company serves as CoreFunds' transfer and
dividend disbursing agent. For these services, State Street Bank and Trust
Company receives fees based on annual per shareholder account charges for
account maintenance and fees for certain shareholder-generated transactions,
plus out-of-pocket expenses. The minimum annual transfer agency fee for each
class of each Portfolio is $15,000. See 'Administrator' in the CoreFunds'
Prospectuses accompanying this Combined Proxy/Prospectus, which are incorporated
herein by reference, for additional information on CoreFunds' transfer agent.
Custodial services are provided to CoreFunds by CoreStates Bank, N.A. See
'Custodian and Transfer Agent' in CoreFunds' Statement of Additional
Information, which is incorporated herein by reference, for additional
information about CoreFunds' custodian.
SFS serves as distributor of the shares of CoreFunds' Portfolios. CoreFunds
has adopted a Distribution Plan pursuant to Rule 12b-1 under the 1940 Act (the
'CoreFunds 12b-1 Plan'). Under the CoreFunds 12b-1 Plan, the class of shares
known as the Individual Shares of each of the CoreFunds' Portfolios bears the
expense of distribution fees payable to SFS at an annual rate of up to .25% of
the average daily net asset value of such Portfolio's outstanding Individual
Shares to finance activities which are principally intended to result in the
sale of Individual Shares. SFS may enter into agreements with financial
institutions and industry professionals which provide distribution and/or
administrative services as agents for their customers who beneficially own
Individual Shares. Services provided by such financial institutions may include,
without limitation: printing and distributing advertising and sales literature
and reports to shareholders used in connection with the sale of a Portfolio's
shares, and personnel and communication equipment used in servicing shareholder
accounts and prospective shareholder inquiries.
The CoreFunds 12b-1 Plan is a 'compensation' type plan as opposed to a
'reimbursement' type plan. Accordingly, payments by Individual Shares under the
CoreFunds 12b-1 Plan are based on the expressed fee rather than on the specific
amounts expended by SFS for distribution purposes. SFS may be able to recover
such amounts or may earn a profit from payments made by Individual Shares of
CoreFunds under the CoreFunds 12b-1 Plan.
For the fiscal year ended June 30, 1995, CoreFunds paid, in the aggregate,
fees to SFS pursuant to the Distribution Plan of $120,490, which represent 0.25%
of the CoreFunds' Portfolios Individual Shares average net assets during that
period.
6
<PAGE>
COMPARATIVE FEE AND EXPENSE TABLES. The tables below show (i) information
regarding the fees and expenses paid by each class of shares of each Conestoga
Portfolio and of each class of shares of each CoreFunds Portfolio as of their
most recent fiscal years, restated to reflect expenses the Conestoga Portfolio
and the CoreFunds Portfolio, respectively, expect to incur during the current
fiscal year and (ii) estimated fees and expenses on a pro forma basis giving
effect to the proposed Reorganization. The investment adviser and other service
providers for CoreFunds are not contractually obligated to do so, but certain of
them have informed CoreFunds and Conestoga that they expect to waive fees and
reimburse expenses for the twelve months following the Reorganization as
necessary to maintain the total operating expenses applicable to each class of
shares of each Portfolio at the pro forma levels stated in the tables below. The
tables indicate that the total operating expenses applicable to each class of
the Conestoga Portfolios are expected to decrease, except those attributable to
the Institutional Shares and Retail Shares of the Conestoga Tax-Free Fund and
the Retail Shares of the Conestoga Special Equity Fund.
7
<PAGE>
COMPARATIVE FEE TABLE FOR EACH PORTFOLIO
<TABLE>
<CAPTION>
CONESTOGA CASH COREFUNDS PRO FORMA
MANAGEMENT CASH RESERVE COMBINED
FUND -------------------------------- ---------------
---------------------------- CLASS Y CLASS C CLASS Y
INSTITUTIONAL RETAIL (INSTITUTIONAL) (INDIVIDUAL) (INSTITUTIONAL)
SHARES SHARES SHARES SHARES SHARES
--------------- ----------- --------------- --------------- ---------------
<S> <C> <C> <C> <C> <C>
ANNUAL FUND OPERATING
EXPENSES
(as a percentage of average net assets)
Advisory Fees
(after fee waivers)................ .20%(1) .20%(1) .29%(2) .29%(2) .28%(2)
12b-1 Fees (after fee waivers)....... None .25%(3) None .25% None
Other Expenses(4)
(after fee waivers and/or expense
reimbursements).................... .36% .36% .24%(5) .24%(5) .23%(6)
Total Operating Expenses
(after fee waivers and/or expense
reimbursements).................... .56%(7) .81%(7) .53%(8) .78%(8) .51%(9)
</TABLE>
<TABLE>
<CAPTION>
CLASS C
(INDIVIDUAL)
SHARES
---------------
<S> <C>
ANNUAL FUND OPERATING
EXPENSES
(as a percentage of average net ass
Advisory Fees
(after fee waivers)................ .28%(2)
12b-1 Fees (after fee waivers)....... .25%
Other Expenses(4)
(after fee waivers and/or expense
reimbursements).................... .23%(6)
Total Operating Expenses
(after fee waivers and/or expense
reimbursements).................... .76%(9)
</TABLE>
- ------------------
(1) The maximum advisory fee for the Institutional Shares and Retail Shares of
the Conestoga Cash Management Fund is 0.40%.
(2) The maximum advisory fee for the Class Y (Institutional) Shares and Class C
(Individual) Shares of the CoreFunds Cash Reserve is 0.50%.
(3) 12b-1 fees for the Retail Shares of the Conestoga Cash Management Fund have
been reduced to reflect the voluntary waiver of fees by that Fund's
distributor. The Conestoga Cash Management Fund can pay up to 0.40% of the
average daily net assets of its Retail Shares as a 12b-1 fee to the
distributor.
(4) Includes administration fees. Absent voluntary fee waivers, administration
fees are payable at the maximum annual rate of 0.25% of the Class Y
(Institutional) Shares and Class C (Individual) Shares of the CoreFunds Cash
Reserve, and 0.17% of the Institutional Shares and Retail Shares of the
Conestoga Cash Management Fund.
(5) Other Expenses, before fee waivers and/or expense reimbursements, would have
been 0.33% and 0.33%, respectively, for the Class Y (Institutional) Shares
and Class C (Individual) Shares of the CoreFunds Cash Reserve.
(6) Other Expenses, before fee waivers and/or expense reimbursements, would be
0.32% and 0.32%, respectively, for the Class Y (Institutional) Shares and
Class C (Individual) Shares of the Pro Forma Combined Portfolio.
(7) Absent the voluntary waivers and reimbursements, which can be terminated at
any time, the total operating expenses for the Institutional Shares and
Retail Shares of the Conestoga Cash Management Fund would have been 0.76%
and 1.16%, respectively.
(8) Absent the voluntary waivers by the investment adviser and administrator,
which can be terminated at any time, the total operating expenses for the
Class Y (Institutional) Shares and Class C (Individual) Shares of the
CoreFunds Cash Reserve would have been 0.83% and 1.08%, respectively.
(9) Absent voluntary waivers, which can be terminated at any time, the total
operating expenses for the Class Y (Institutional) Shares and Class C
(Individual) Shares of the Pro Forma Combined Portfolio would be 0.72% and
0.97%, respectively.
EXAMPLE: An investor would pay the following expenses on a $1,000
investment, assuming
(1) 5% annual return, and (2) redemption at the end of the following periods:
8
<PAGE>
<TABLE>
<CAPTION>
1 YEAR 3 YEARS 5 YEARS 10 YEARS
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Conestoga Cash Management Fund
Institutional Shares..................................................... $6 $18 $31 $70
Retail Shares............................................................ $8 $26 $45 $100
CoreFunds Cash Reserve
Class Y (Institutional) Shares........................................... $5 $17 $30 $66
Class C (Individual) Shares.............................................. $8 $25 $43 $97
Pro Forma Combined
Class Y (Institutional) Shares........................................... $5 $16 $29 $64
Class C (Individual) Shares.............................................. $8 $24 $42 $94
</TABLE>
9
<PAGE>
<TABLE>
<CAPTION>
CONESTOGA COREFUNDS PRO FORMA
TAX-FREE TAX-FREE RESERVE COMBINED
FUND -------------------------------- ---------------
---------------------------- CLASS Y CLASS C CLASS Y
INSTITUTIONAL RETAIL (INSTITUTIONAL) (INDIVIDUAL) (INSTITUTIONAL)
SHARES SHARES SHARES SHARES SHARES
--------------- ----------- --------------- --------------- ---------------
<S> <C> <C> <C> <C> <C>
ANNUAL FUND OPERATING
EXPENSES
(as a percentage of average net assets)
Advisory Fees
(after fee waivers)................ .16%(1) .16%(1) .29%(2) .29%(2) .28%(2)
12b-1 Fees (after fee waivers)....... None .05%(3) None .25% None
Other Expenses(4)
(after fee waivers and/or expense
reimbursements).................... .30% .30% .24%(5) .24%(5) .23%(6)
Total Operating Expenses
(after fee waivers and/or expense
reimbursements).................... .46%(7) .51%(7) .53%(8) .78%(8) .51%(9)
<CAPTION>
CLASS C
(INDIVIDUAL)
SHARES
---------------
ANNUAL FUND OPERATING
EXPENSES
(as a percentage of average net ass
Advisory Fees
(after fee waivers)................ .28%(2)
12b-1 Fees (after fee waivers)....... .25%
Other Expenses(4)
(after fee waivers and/or expense
reimbursements).................... .23%(6)
Total Operating Expenses
(after fee waivers and/or expense
reimbursements).................... .76%(9)
</TABLE>
- ------------------
(1) The maximum advisory fee for the Institutional Shares and Retail Shares of
the Conestoga Tax-Free Fund is .40%.
(2) The maximum advisory fee for the Class Y (Institutional) Shares and Class C
(Individual) Shares of the CoreFunds Tax-Free Reserve is .50%.
(3) 12b-1 fee for the Retail Shares of the Conestoga Tax-Free Fund have been
reduced to reflect the voluntary waiver of fees by that Fund's distributor.
The Conestoga Tax-Free Fund can pay up to .40% of the average daily net
assets of its Retail Shares as a 12b-1 fee to its distributor.
(4) Includes administration fees. Absent voluntary fee waivers, administration
fees are payable at the maximum annual rate of .25% of the Class Y
(Institutional) Shares and Class C (Individual) Shares of the CoreFunds
Tax-Free Reserve, and .17% of the Institutional Shares and Retail Shares of
the Conestoga Tax-Free Fund.
(5) Other Expenses, before fee waivers and/or expense reimbursements, would have
been 0.33% and 0.33%, respectively, for the Class Y (Institutional) Shares
and Class C (Individual) Shares of the CoreFunds Tax-Free Reserve.
(6) Other Expenses, before fee waivers and/or expense reimbursements, would be
0.32% and 0.32%, respectively, for the Class Y (Institutional) Shares and
Class C (Individual) Shares of the Pro Forma Combined Portfolio.
(7) Absent the voluntary waivers and reimbursements by the investment adviser
and administrator, which can be terminated at any time, the total operating
expenses for the Institutional Shares and Retail Shares of the Conestoga
Tax-Free Fund would have been 0.70% and 1.10%, respectively.
(8) Without voluntary waivers by its investment adviser and administrator, which
can be terminated at any time, total operating expenses for the Class Y
(Institutional) Shares and Class C (Individual) Shares of the CoreFunds
Tax-Free Reserve would have been 0.83% and 1.08%, respectively.
(9) Absent voluntary waivers, which can be terminated at any time, the total
operating expenses for the Class Y (Institutional) Shares and Class C
(Individual) Shares of the Pro Forma Combined Portfolio would be 0.72% and
0.97%, respectively.
EXAMPLE: An investor would pay the following expenses on a $1,000
investment, assuming
(1) 5% annual return, and (2) redemption at the end of the following periods:
<TABLE>
<CAPTION>
1 YEAR 3 YEARS 5 YEARS 10 YEARS
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Conestoga Tax-Free Fund
Institutional Shares..................................................... $5 $15 $26 $58
</TABLE>
10
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
Retail Shares............................................................ $5 $16 $29 $64
CoreFunds Tax-Free Reserve
Class Y (Institutional) Shares........................................... $5 $17 $30 $66
Class C (Individual) Shares.............................................. $8 $25 $43 $97
Pro Forma
Class Y (Institutional) Shares........................................... $5 $16 $29 $64
Class C (Individual) Shares.............................................. $8 $24 $42 $94
</TABLE>
11
<PAGE>
<TABLE>
<CAPTION>
CONESTOGA
U.S. TREASURY SECURITIES COREFUNDS PRO FORMA
TREASURY RESERVE COMBINED
FUND -------------------------------- ---------------
---------------------------- CLASS Y CLASS C CLASS Y
INSTITUTIONAL RETAIL (INSTITUTIONAL) (INDIVIDUAL) (INSTITUTIONAL)
SHARES SHARES SHARES SHARES SHARES
--------------- ----------- --------------- --------------- ---------------
<S> <C> <C> <C> <C> <C>
ANNUAL FUND OPERATING
EXPENSES
(as a percentage of average net assets)
Advisory Fees
(after fee waivers)................ .27%(1) .27%(1) .29%(2) .29%(2) .28%(2)
12b-1 Fees (after fee waivers)....... None .15%(3) None .25% None
Other Expenses(4)
(after fee waivers and/or expense
reimbursements).................... .35%(5) .35%(5) .24%(6) .24%(6) .23%(7)
Total Operating Expenses
(after fee waivers and/or expense
reimbursements).................... .62%(8) .77%(8) .53%(9) .78%(9) .51%(10)
<CAPTION>
CLASS C
(INDIVIDUAL)
SHARES
---------------
ANNUAL FUND OPERATING
EXPENSES
(as a percentage of average net ass
Advisory Fees
(after fee waivers)................ .28%(2)
12b-1 Fees (after fee waivers)....... .25%
Other Expenses(4)
(after fee waivers and/or expense
reimbursements).................... .23%(7)
Total Operating Expenses
(after fee waivers and/or expense
reimbursements).................... .76%(10)
<CAPTION>
</TABLE>
- ------------------
(1) The maximum advisory fee for the Institutional Shares and Retail Shares of
the Conestoga U.S. Treasury Securities Fund is .40%.
(2) The maximum advisory fee for the Class Y (Institutional) Shares and Class C
(Individual) Shares of the CoreFunds Treasury Reserve is .50%.
(3) 12b-1 fees for the Retail Shares of the Conestoga U.S. Treasury Securities
Fund have been reduced to reflect the voluntary waiver of fees by that
Fund's distributor. The Conestoga U.S. Treasury Securities Fund can pay up
to .40% of the average daily net assets of its Retail Shares as a 12b-1 fee
to its distributor.
(4) Includes administration fees. Absent voluntary fee waivers, administration
fees are payable at the maximum annual rate of .25% of the Class Y
(Institutional) Shares and Class C (Individual) Shares of the CoreFunds
Treasury Reserve, and .17% of the Institutional Shares and Retail Shares of
the Conestoga U.S. Treasury Securities Fund.
(5) Other Expenses, before fee waivers and/or expense reimbursements, would
have been 0.37% and 0.37%, respectively, for the Institutional Shares and
Retail Shares of the Conestoga U.S. Treasury Securities Fund.
(6) Other Expenses, before fee waivers and/or expense reimbursements, would
have been 0.33% and 0.33%, respectively, for the Class Y (Institutional)
Shares and Class C (Individual) Shares of the CoreFunds Cash Reserve.
(7) Other Expenses, before fee waivers and/or expense reimbursements, would be
0.32% and 0.32%, respectively, for the Class Y (Institutional) Shares and
Class C (Individual) Shares of the Pro Forma Combined Portfolio.
(8) Absent the voluntary waivers and reimbursements by the investment adviser,
which can be terminated at any time, the total operating expenses for the
Institutional Shares and Retail Shares of the Conestoga U.S. Treasury
Securities Fund would have been 0.77% and 1.17%, respectively.
(9) Absent the voluntary waivers and/or expense reimbursements by the
investment adviser and administrator, which can be terminated at any time,
total operating expenses for the Class Y (Institutional) Shares and Class C
(Individual) Shares of the CoreFunds Treasury Reserve would have been 0.83%
and 1.08%, respectively.
(10) Absent voluntary waivers, which can be terminated at any time, the total
operating expenses for the Class Y (Institutional) Shares and Class C
(Individual) Shares of the Pro Forma Combined Portfolio would be 0.72% and
0.97%, respectively.
EXAMPLE: An investor would pay the following expenses on a $1,000
investment, assuming
(1) 5% annual return, and (2) redemption at the end of the following periods:
12
<PAGE>
<TABLE>
<CAPTION>
1 YEAR 3 YEARS 5 YEARS 10 YEARS
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Conestoga U.S. Treasury Securities Fund
Institutional Shares..................................................... $6 $20 $35 $77
Retail Shares............................................................ $8 $25 $43 $95
CoreFunds Treasury Reserve
Class Y (Institutional) Shares........................................... $5 $17 $30 $66
Class C (Individual) Shares.............................................. $8 $25 $43 $97
Pro Forma Combined
Class Y (Institutional) Shares........................................... $5 $16 $29 $64
Class C (Individual) Shares.............................................. $8 $24 $42 $94
</TABLE>
<TABLE>
<CAPTION>
CONESTOGA COREFUNDS PRO FORMA
EQUITY VALUE EQUITY FUND* COMBINED
FUND ------------------------------ ----------------------------
-------------------------- CLASS Y CLASS A CLASS Y CLASS A
INSTITUTIONAL RETAIL (INSTITUTIONAL) (INDIVIDUAL) (INSTITUTIONAL) (INDIVIDUAL)
SHARES SHARES SHARES SHARES SHARES SHARES
------------- ----------- --------------- ------------- --------------- -----------
<S> <C> <C> <C> <C> <C> <C>
SHAREHOLDER TRANSACTION
EXPENSES
Maximum Sales Load Imposed on
Purchases....................... None 2.00% None 3.25% None 3.25%
Maximum Sales Load Imposed on
Reinvested Dividends (as a
percentage of offering price)... None None None None None None
Contingent Deferred Sales Charge
(as a percentage of original
purchase price or redemption
proceeds, as applicable)........ None None None None None None
Redemption Fee (as a percentage of
amount redeemed, if
applicable)..................... None None None None None None
Exchange Fee...................... None None None None None None
</TABLE>
10
<PAGE>
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
ANNUAL FUND OPERATING EXPENSES
(as a percentage of average net
assets)
Advisory Fees..................... .74% .74% .75% .75% .74% .74%
12b-1 Fees (after fee waivers).... None .25%(2) None .25%(2) None .25%(2)
Other Expenses(2)
(after fee waivers and/or
expense reimbursements)......... .31%(4) .31%(4) .24%(5) .24%(5) .26%(6) .26%(6)
Total Operating Expenses
(after fee waivers and/or
expense reimbursements)......... 1.05%(7) 1.30%(7) .99%(8) 1.24%(8) 1.00%(9) 1.25%(9)
</TABLE>
- ------------------
* It is expected that the CoreFunds Value Equity Fund will change its name and
investment policies upon consummation of the Reorganization and that it will
continue the operations of the Conestoga Equity Fund.
(1) 12b-1 fees for the Retail Shares of the Conestoga Equity Fund have been
reduced to reflect the voluntary waiver of fees by that Fund's Distributor.
Conestoga Equity Fund can pay up to 0.40% of the average daily net assets of
its Retail Shares as a 12b-1 fee to the distributor.
(2) Under rules of the NASD, a 12b-1 fee may be treated as a sales charge for
certain purposes. Because the 12b-1 fee is an annual fee charged against the
assets of a Portfolio, long-term shareholders may indirectly pay more in
total sales charges than the economic equivalent of the maximum front-end
sales charge permitted by the rules of the NASD.
(3) Includes administration fees. Absent voluntary fee waivers, administration
fees are payable at the maximum annual rate of .25% of the Class Y
(Institutional) Shares and Class A (Individual) Shares of the CoreFunds
Value Equity Fund, and .17% of the Institutional Shares and Retail Shares of
the Conestoga Equity Fund.
(4) Other Expenses, before fee waivers and/or expense reimbursements, would have
been 0.36% and 0.36%, respectively, for the Institutional Shares and Retail
Shares of the Conestoga Equity Fund.
(5) Other Expenses, before fee waivers and/or expense reimbursements, would have
been 0.33% and 0.33%, respectively, for the Class Y (Institutional) Shares
and Class A (Individual) Shares of the CoreFunds Value Equity Fund.
(6) Other Expenses, before fee waivers and/or expense reimbursements, would be
0.35% and 0.35%, respectively, for the Class Y (Institutional) Shares and
Class A (Individual) Shares of the Pro Forma Combined Portfolio.
(7) Absent the voluntary waivers and reimbursements by the investment adviser,
which can be terminated at any time, the total operating expenses of the
Institutional Shares and Retail Shares of the Conestoga Equity Fund would
have been 1.10% and 1.50%, respectively.
(8) Absent fee waivers by the investment adviser and administrator, which can be
terminated at any time, the total operating expenses for Class Y
(Institutional) Shares and Class A (Individual) Shares of the CoreFunds
Value Equity Fund would have been 1.08% and 1.33%, respectively.
(9) Absent voluntary waivers, which can be terminated at any time, the total
operating expenses of the Class Y (Institutional) Shares and Class A
(Individual) Shares of the Pro Forma Combined Portfolio would be 1.09% and
1.34%, respectively.
EXAMPLE: An investor would pay the following expenses on a $1,000
investment, assuming
(1) 5% annual return, and (2) redemption at the end of the following periods:
<TABLE>
<CAPTION>
1 YEAR 3 YEARS 5 YEARS 10 YEARS
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Conestoga Equity Fund
Institutional Shares..................................................... $11 $33 $58 $128
Retail Shares $33 $60 $90 $174
CoreFunds Value Equity Fund
Class Y (Institutional) Shares........................................... $10 $32 $55 $121
</TABLE>
11
<PAGE>
<TABLE>
<S> <C> <C> <C> <C>
Class A (Individual) Shares.............................................. $45 $71 $98 $178
Pro Forma Combined
Class Y (Institutional) Shares........................................... $10 $32 $55 $122
Class A (Individual) Shares $45 $71 $99 $179
</TABLE>
12
<PAGE>
<TABLE>
<CAPTION>
CONESTOGA COREFUNDS PRO FORMA
SPECIAL EQUITY SPECIAL EQUITY FUND* COMBINED
FUND ------------------------------ ----------------------------
-------------------------- CLASS Y CLASS A CLASS Y CLASS A
INSTITUTIONAL RETAIL (INSTITUTIONAL) (INDIVIDUAL) (INSTITUTIONAL) (INDIVIDUAL)
SHARES SHARES SHARES SHARES SHARES SHARES
------------- ----------- --------------- ------------- --------------- -----------
<S> <C> <C> <C> <C> <C> <C>
SHAREHOLDER TRANSACTION EXPENSES
Maximum Sales Load Imposed on
Purchases......................... None 2.00% None None None 3.25%
Maximum Sales Load Imposed on
Reinvested Dividends (as a
percentage of offering price)..... None None None None None None
Contingent Deferred Sales Charge (as
a percentage of original purchase
price or redemption proceeds, as
applicable)....................... None None None None None None
Redemption Fee (as a percentage of
amount redeemed, if applicable)... None None None None None None
Exchange Fee........................ None None None None None None
ANNUAL FUND OPERATING EXPENSES
(as a percentage of average net
assets)
Advisory Fees
(after fee waivers)............... .0%(1) .0%(1) N/A N/A .10%(1) .10%(1)
12b-1 Fees (after fee waivers)...... None .0%(2) N/A N/A None .25%(3)
Other Expenses(4)
(after fee waivers and/or expense
reimbursements)................... .32%(5) .32%(5) N/A N/A .21%(6) .21%(6)
Total Operating Expenses
(after fee waivers and/or expense
reimbursements)................... .32%(7) .32%(7) N/A N/A .31%(8) .56%(8)
</TABLE>
- ------------------
* The CoreFunds Special Equity Fund has not yet commenced operations. The
CoreFunds Special Equity Fund will continue the operations of the Conestoga
Special Equity Fund upon consummation of the Reorganization relating to that
Fund.
(1) The maximum advisory fee for the Institutional Shares and Retail Shares of
the Conestoga Special Equity Fund and the Class Y (Institutional) Shares and
Class A (Individual) Shares of the CoreFunds Special Equity Fund is 1.50%.
(2) 12b-1 fees for the Retail Shares of the Conestoga Special Equity Fund have
been reduced to reflect the voluntary waiver of fees by that Fund's
distributor. The Conestoga Special Equity Fund can pay up to 0.40% of the
average daily net assets of its Retail Shares as a 12b-1 fee to the
distributor.
13
<PAGE>
(3) Under rules of the NASD, a 12b-1 fee may be treated as a sales charge for
certain purposes. Because the 12b-1 fee is an annual fee charged against the
assets of a Portfolio, long-term shareholders may indirectly pay more in
total sales charges than the economic equivalent of the maximum front-end
sales charge permitted by the rules of the NASD.
(4) Includes administration fees. Absent voluntary fee waivers, administration
fees are payable at the maximum annual rate of .17% of the Institutional
Shares and Retail Shares of the Conestoga Special Equity Fund.
(5) Other Expenses, before fee waivers and/or expense reimbursements, would have
been 0.37% and 0.37%, respectively, for the Institutional Shares and Retail
Shares of the Conestoga Special Equity Fund.
(6) Other Expenses, before fee waivers and/or expense reimbursements, would be
0.30% and 0.30%, respectively, for the Class Y (Institutional) Shares and
Class A (Individual) Shares of the CoreFunds Special Equity Fund.
(7) Absent the voluntary waivers and reimbursements by the investment adviser
and administrator, which can be terminated at any time, the total operating
expenses of the Institutional Shares and Retail Shares of the Conestoga
Special Equity Fund would have been 1.87% and 2.27%, respectively.
(8) Absent voluntary waivers, which can be terminated at any time, the pro forma
total operating expenses of the Class Y (Institutional) Shares and Class A
(Individual) Shares of the CoreFunds Special Equity Fund would be 1.80% and
2.05%, respectively.
14
<PAGE>
EXAMPLE: An investor would pay the following expenses on a $1,000
investment, assuming
(1) 5% annual return, and (2) redemption at the end of the following periods:
<TABLE>
<CAPTION>
1 YEAR 3 YEARS 5 YEARS 10 YEARS
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Conestoga Special Equity Fund
Institutional Shares..................................................... $ 3 $10 $18 $ 41
Retail Shares............................................................ $23 $30 $38 $ 60
CoreFunds Special Equity Fund
Class Y (Institutional) Shares........................................... N/A N/A N/A N/A
Class A (Individual) Shares.............................................. N/A N/A N/A N/A
Pro Forma Combined
Class Y (Institutional) Shares........................................... $ 3 $10 $17 $ 39
Class A (Individual) Shares.............................................. $38 $50 $63 $100
</TABLE>
15
<PAGE>
<TABLE>
<CAPTION>
COREFUNDS
CONESTOGA BOND PRO FORMA
BOND FUND* COMBINED
FUND ------------------------------ ----------------------------
-------------------------- CLASS Y CLASS A CLASS Y CLASS A
INSTITUTIONAL RETAIL (INSTITUTIONAL) (INDIVIDUAL) (INSTITUTIONAL) (INDIVIDUAL)
SHARES SHARES SHARES SHARES SHARES SHARES
------------- ----------- --------------- ------------- --------------- -----------
<S> <C> <C> <C> <C> <C> <C>
SHAREHOLDER TRANSACTION EXPENSES
Maximum Sales Load Imposed on
Purchases......................... None 2.00% None None None 3.25%
Maximum Sales Load Imposed on
Reinvested Dividends (as a
percentage of offering price)..... None None None None None None
Contingent Deferred Sales
Charge (as a percentage of
original purchase price or
redemption proceeds, as
applicable)....................... None None None None None None
Redemption Fee (as a percentage
of amount redeemed, if
applicable)....................... None None None None None None
Exchange Fee........................ None None None None None None
ANNUAL FUND OPERATING EXPENSES
(as a percentage of average net
assets)
Advisory Fees
(after fee waivers)............... .34%(1) .34%(1) N/A N/A .35%(1) .35%(1)
12b-1 Fees
(after fee waivers)............... None .25%(3) N/A N/A None .25%(3)
Other Expenses(4)
(after fee waivers and/or expense
reimbursements)................... .37%(5) .37%(5) N/A N/A .21%(6) .21%(6)
Total Operating Expenses
(after fee waivers and/or expense
reimbursements)................... .71%(7) .96%(7) N/A N/A .56%(8) .81%(8)
</TABLE>
- ------------------
* The CoreFunds Bond Fund has not yet commenced operations. The CoreFunds Bond
Fund will continue the operations of the Conestoga Bond Fund upon
consummation of the Reorganization relating to that Fund.
(1) The maximum advisory fee for the Institutional Shares and Retail Shares of
the Conestoga Bond Fund and the Class Y (Institutional) Shares and Class A
(Individual) Shares of the CoreFunds Bond Fund is .74%.
(2) 12b-1 fees for the Retail Shares of the Conestoga Bond Fund have been
reduced to reflect the voluntary waiver of fees by that Fund's distributor.
The Conestoga Bond Fund can pay up to .40% of its average daily net assets
of its Retail Shares as a 12b-1 fee to its distributor.
16
<PAGE>
(3) Under rules of the NASD, a 12b-1 fee may be treated as a sales charge for
certain purposes. Because the 12b-1 fee is an annual fee charged against the
assets of a Portfolio, long-term shareholders may indirectly pay more in
total sales charges than the economic equivalent of the maximum front-end
sales charge permitted by the rules of the NASD.
(4) Includes administration fees. Absent voluntary fee waivers, administration
fees are payable at the maximum annual rate of .17% of the Institutional
Shares and Retail Shares of the Conestoga Bond Fund.
(5) Other Expenses, before fee waivers and/or expense reimbursements, would have
been 0.38% and 0.38%, respectively, for the Institutional Shares and Retail
Shares of the Conestoga Bond Fund.
(6) Other Expenses, before fee waivers and/or expense reimbursements, would be
0.30% and 0.30%, respectively, for the Class Y (Institutional) Shares and
Class A (Individual) Shares of the CoreFunds Bond Fund.
(7) Absent the voluntary waivers and reimbursements by the investment adviser
and administrator, which can be terminated at any time, the total operating
expenses for the Institutional Shares and Retail Shares of the Conestoga
Bond Fund would have been 1.12% and 1.52%, respectively.
(8) Absent voluntary waivers, which can be terminated at any time, the pro forma
total operating expenses of the Class Y (Institutional) Shares and Class A
(Individual) Shares of the CoreFunds Bond Fund would be 1.04% and 1.29%,
respectively.
EXAMPLE: An investor would pay the following expenses on a $1,000
investment, assuming
(1) 5% annual return, and (2) redemption at the end of the following periods:
<TABLE>
<CAPTION>
1 YEAR 3 YEARS 5 YEARS 10 YEARS
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Conestoga Bond Fund
Institutional Shares..................................................... $ 7 $ 23 $ 40 $ 88
Retail Shares............................................................ $ 30 $ 50 $ 72 $135
CoreFunds Bond Fund
Class Y (Institutional) Shares........................................... N/A N/A N/A N/A
Class A (Individual) Shares.............................................. N/A N/A N/A N/A
Pro Forma Combined
Class Y (Institutional) Shares........................................... $ 6 $ 18 $ 31 $ 70
Class A (Individual) Shares.............................................. $ 41 $ 58 $ 76 $129
</TABLE>
17
<PAGE>
<TABLE>
<CAPTION>
COREFUNDS
CONESTOGA INTERMEDIATE PRO FORMA
INTERMEDIATE BOND FUND COMBINED
INCOME FUND ------------------------------ ----------------------------
-------------------------- CLASS Y CLASS A CLASS Y CLASS A
INSTITUTIONAL RETAIL (INSTITUTIONAL) (INDIVIDUAL) (INSTITUTIONAL) (INDIVIDUAL)
SHARES SHARES SHARES SHARES SHARES SHARES
------------- ----------- --------------- ------------- --------------- -----------
<S> <C> <C> <C> <C> <C> <C>
SHAREHOLDER TRANSACTION
EXPENSES
Maximum Sales Load Imposed on
Purchases....................... None 2.00% None 3.25% None 3.25%
Maximum Sales Load Imposed on
Reinvested Dividends (as a
percentage of offering price)... None None None None None None
Contingent Deferred Sales
Charge (as a percentage of
original purchase price or
redemption proceeds, as
applicable)..................... None None None None None None
Redemption Fee (as a percentage
of amount redeemed, if
applicable)..................... None None None None None None
Exchange Fee...................... None None None None None None
ANNUAL FUND OPERATING EXPENSES
(as a percentage of average net
assets)
Advisory Fees
(after fee waivers)............. .25%(1) .25%(1) .37%(2) .37%(2) .25%(2) .25%(2)
12b-1 Fees (after fee waivers).... None .25%(4) None .25%(4) None .25%(4)
Other Expenses(5)
(after fee waivers and/or
expense reimbursements)......... .39% .39% .23%(6) .23%(6) .26%(7) .26%(7)%
Total Operating Expenses
(after fee waivers and/or
expense reimbursements)......... .64%(8) .89%(8) .60%(9) .85%(9) .51%(10) .76%(10)
</TABLE>
- ------------------
(1) The maximum advisory fee for the Institutional Shares and Retail Shares of
the Conestoga Intermediate Income Fund is .74%.
(2) The maximum advisory fee for the Class Y (Institutional) Shares and Class A
(Individual) Shares of the CoreFunds Intermediate Bond Fund is .50%.
(3) 12b-1 fees for the Retail Shares of the Conestoga Intermediate Income Fund
have been reduced to reflect the voluntary waiver of fees by that Fund's
distributor. The Conestoga Intermediate Income Fund can pay up to .40% of
its daily net assets as a 12b-1 fee to its distributor.
18
<PAGE>
(4) Under rules of the NASD, a 12b-1 fee may be treated as a sales charge for
certain purposes. Because the 12b-1 fee is an annual fee charged against the
assets of a Portfolio, long-term shareholders may indirectly pay more in
total sales charges than the economic equivalent of the maximum front-end
sales charge permitted by the rules of the NASD.
(5) Includes administration fees. Absent voluntary fee waivers, administration
fees are payable at the maximum annual rate of .25% of the Class Y
(Institutional) Shares and Class A (Individual) Shares of the CoreFunds
Intermediate Bond Fund, and .17% of the Institutional Shares and Retail
Shares of the Conestoga Intermediate Income Fund.
(6) Other Expenses, before fee waivers and/or expense reimbursements, would have
been 0.32% and 0.32%, respectively, for the Class Y (Institutional) Shares
and Class A (Individual) Shares of the CoreFunds Intermediate Bond Fund.
(7) Other Expenses, before fee waivers and/or expense reimbursements, would be
0.35% and 0.35%, respectively, for the Class Y (Institutional) Shares and
Class A (Individual) Shares of the Pro Forma Combined Portfolio.
(8) Absent the voluntary waivers and reimbursements by the investment adviser
and administrator, the total operating expenses for the Institutional Shares
and Retail Shares of the Conestoga Intermediate Income Fund would have been
1.13% and 1.53%, respectively.
(9) Absent voluntary waivers by its investment adviser and administrator, which
can be terminated at any time, total operating expenses for the Class Y
(Institutional) Shares and Class A (Individual) Shares of the CoreFunds
Intermediate Bond Fund would have been 0.82% and 1.07%, respectively.
(10) Absent voluntary waivers, which can be terminated at any time, the total
operating expenses for the Class Y (Institutional) Shares and Class A
(Individual) Shares of the Pro Forma Combined Portfolio would be 0.85% and
1.10%, respectively.
EXAMPLE: An investor would pay the following expenses on a $1,000
investment, assuming
(1) 5% annual return, and (2) redemption at the end of the following periods:
<TABLE>
<CAPTION>
1 YEAR 3 YEARS 5 YEARS 10 YEARS
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Conestoga Intermediate Income Fund
Institutional Shares ....................................... $7 $20 $36 $80
Retail Shares ............................................ $29 $48 $68 $127
CoreFunds Intermediate Bond Fund
Class Y (Institutional) Shares ........................... $6 $19 $33 $75
Class A (Individual) Shares .............................. $41 $59 $78 $134
Pro Forma Combined
Class Y (Institutional) Shares ........................... $5 $16 $29 $64
Class A (Individual) Shares .............................. $40 $56 $73 $124
</TABLE>
19
<PAGE>
<TABLE>
<CAPTION>
COREFUNDS
CONESTOGA PENNSYLVANIA
PENNSYLVANIA MUNICIPAL BOND PRO FORMA
TAX-FREE BOND FUND COMBINED
FUND ------------------------------ ----------------------------
-------------------------- CLASS Y CLASS A CLASS Y CLASS A
INSTITUTIONAL RETAIL (INSTITUTIONAL) (INDIVIDUAL) (INSTITUTIONAL) (INDIVIDUAL)
SHARES SHARES SHARES SHARES SHARES SHARES
------------- ----------- --------------- ------------- --------------- -----------
<S> <C> <C> <C> <C> <C> <C>
SHAREHOLDER TRANSACTION EXPENSES
Maximum Sales Load Imposed on
Purchases......................... None 2.00% None 3.25% None 3.25%
Maximum Sales Load Imposed on
Reinvested Dividends (as a
percentage of offering price)..... None None None None None None
Contingent Deferred Sales
Charge (as a percentage of
original purchase price or
redemption proceeds, as
applicable)....................... None None None None None None
Redemption Fee (as a percentage
of amount redeemed, if
applicable)....................... None None None None None None
Exchange Fee........................ None None None None None None
ANNUAL FUND OPERATING EXPENSES
(as a percentage of average net
assets)
Advisory Fees
(after fee waivers)............... .0%(1) .0%(1) .0%(2) .0%(2) .0%(2) .0%(2)
12b-1 Fees (after fee waivers)...... None .0%(3) None .25%(4) None .25%(4)
Other Expenses(5)
(after fee waivers and/or expense
reimbursements)................... .51% .51% .37%(6) .37%(6) .14%(7) .14%(7)
Total Operating Expenses
(after fee waivers and/or expense
reimbursements)................... .51%(8) .51%(8) .37%(9) .62%(9) .14%(10) .39%(10)
</TABLE>
- ------------------
(1) The maximum advisory fee for the Institutional Shares and Retail Shares of
the Conestoga Pennsylvania Tax-Free Bond Fund is .74%.
(2) The maximum advisory fee for the Class Y (Institutional) Shares and Class A
(Individual) Shares of the CoreFunds Pennsylvania Municipal Bond Fund is
.50%.
(3) 12b-1 fees for the Retail Shares of the Conestoga Pennsylvania Tax-Free Bond
Fund have been reduced to reflect the voluntary waiver of fees by that
Fund's distributor. The Conestoga Pennsylvania Tax-Free Bond Fund can pay up
to .40% of the average daily net assets of its Retail Shares as a 12b-1 fee
to its distributor.
20
<PAGE>
(4) Under rules of the NASD, a 12b-1 fee may be treated as a sales charge for
certain purposes. Because the 12b-1 fee is an annual fee charged against the
assets of a Portfolio, long-term shareholders may indirectly pay more in
total sales charges than the economic equivalent of the maximum front-end
sales charge permitted by the rules of the NASD.
(5) Includes administration fees. Absent voluntary fee waivers, administration
fees are payable at the maximum annual rate of .25% of the Class Y
(Institutional) Shares and Class A (Individual) Shares of the CoreFunds
Pennsylvania Municipal Bond Fund, and .17% of the Institutional Shares and
Retail Shares of the Conestoga Pennsylvania Tax-Free Bond Fund.
(6) Other Expenses, before fee waivers and/or expense reimbursements, would have
been 0.46% and 0.46%, respectively, for the Class Y (Institutional) Shares
and Class A (Individual) Shares of the CoreFunds Pennsylvania Municipal Bond
Fund.
(7) Other Expenses, before fee waivers and/or expense reimbursements, would be
0.39% and 0.39%, respectively, for the Class Y (Institutional) Shares and
Class A (Individual) Shares of the Pro Forma Combined Portfolio.
(8) Absent the voluntary waivers and reimbursements by the investment adviser
and administrator, which can be terminated at any time, the total operating
expenses for the Institutional Shares and Retail Shares of the Conestoga
Pennsylvania Tax-Free Bond Fund would have been 1.25% and 1.65%,
respectively.
(9) Absent the voluntary fee waivers by the investment adviser and
administrator, which can be terminated at any time, total operating expenses
for the Class Y (Institutional) Shares and Class A (Individual) Shares of
the CoreFunds Pennsylvania Municipal Bond Fund would have been 0.96% and
1.21%, respectively.
(10) Absent voluntary waivers, which can be terminated at any time, the total
operating expenses for the Class Y (Institutional) Shares and Class A
(Individual) Shares of the Pro Forma Combined Portfolio would be 0.89% and
1.14%, respectively.
EXAMPLE: An investor would pay the following expenses on a $1,000
investment, assuming
(1) 5% annual return, and (2) redemption at the end of the following periods:
<TABLE>
<CAPTION>
1 YEAR 3 YEARS 5 YEARS 10 YEARS
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Conestoga Pennsylvania Tax-Free Bond Fund
Institutional Shares $5 $16 $29 $64
Retail Shares $25 $36 $48 $83
CoreFunds Pennsylvania Municipal Bond Fund
Class Y (Institutional) Shares $4 $12 $21 $47
Class A (Individual) Shares $39 $52 $66 $107
Pro Forma Combined
Class Y (Institutional) Shares $1 $5 $8 $18
Class A (Individual) Shares $36 $45 $54 $80
</TABLE>
21
<PAGE>
<TABLE>
<CAPTION>
COREFUNDS
CONESTOGA BALANCED PRO FORMA
BALANCED FUND COMBINED
FUND ------------------------------ ------------------------------
-------------------------- CLASS Y CLASS A CLASS Y CLASS A
INSTITUTIONAL RETAIL (INSTITUTIONAL) (INDIVIDUAL) (INSTITUTIONAL) (INDIVIDUAL)
SHARES SHARES SHARES SHARES SHARES SHARES
------------- ----------- --------------- ------------- --------------- -------------
<S> <C> <C> <C> <C> <C> <C>
SHAREHOLDER TRANSACTION
EXPENSES
Maximum Sales Load Imposed on
Purchases...................... None 2.00% None 3.25% None 3.25%
Maximum Sales Load Imposed on
Reinvested Dividends (as a
percentage of offering price).. None None None None None None
Contingent Deferred Sales Charge
(as a percentage of original
purchase price or redemption
proceeds, as applicable)....... None None None None None None
Redemption Fee (as a percentage
of amount redeemed, if
applicable).................... None None None None None None
Exchange Fee..................... None None None None None None
ANNUAL FUND OPERATING
EXPENSES
(as a percentage of average net
assets)
Advisory Fees
(after fee waivers).............. .49%(1) .49%(1) .67%(2) .67%(2) .56%(2) .56%(2)
12b-1 Fees (after fee waivers)..... None .25%(4) None .25%(4) None .25%(4)
Other Expenses(5)
(after fee waivers and/or expense
reimbursements).................. .33% .33% .26%(6) .26%(6) .24%(7) .24%(7)
Total Operating Expenses
(after fee waivers and/or expense
reimbursements).................. .82%(8) 1.07%(8) .93%(9) 1.18%(9) .80%(10) 1.05%(10)
</TABLE>
- ------------------
(1) The maximum advisory fee for the Institutional Shares and Retail Shares of
the Conestoga Balanced Fund is 0.75%.
(2) The maximum advisory fee for the Class Y (Institutional) Shares and Class A
(Individual) Shares of the CoreFunds Balanced Fund is .70%.
22
<PAGE>
(3) 12b-1 fees for the Retail Shares of the Conestoga Balanced Fund have been
reduced to reflect the voluntary waiver of fees by that Fund's distributor.
The Conestoga Balanced Fund can pay up to 0.40% of its average daily net
assets of its Retail Shares as a 12b-1 fee to its distributor.
(4) Under rules of the NASD, a 12b-1 fee may be treated as a sales charge for
certain purposes. Because the 12b-1 fee is an annual fee charged against the
assets of a Portfolio, long-term shareholders may indirectly pay more in
total sales charges than the economic equivalent of the maximum front-end
sales charge permitted by the rules of the NASD.
(5) Includes administration fees. Absent voluntary fee waivers, administration
fees are payable at the maximum annual rate of .25% of the Class Y
(Institutional) Shares and Class A (Individual) Shares, and .17% of the
Institutional Shares and Retail Shares of the Conestoga Balanced Fund.
(6) Other Expenses, before fee waivers and/or expense reimbursements, would have
been 0.35% and 0.35%, respectively, for the Class Y (Institutional) Shares
and Class A (Individual) Shares of the CoreFunds Balanced Fund.
(7) Other Expenses, before fee waivers and/or expense reimbursements, would be
0.33% and 0.33%, respectively, for the Class Y (Institutional) Shares and
Class A (Individual) Shares of the Pro Forma Combined Portfolio.
(8) Absent the voluntary waivers and reimbursements by the investment adviser
and administrator, which can be terminated at any time, the total operating
expenses of the Institutional Shares and Retail Shares of the Conestoga
Balanced Fund would have been 1.08% and 1.48%, respectively.
(9) Absent the voluntary fee waivers by the investment adviser and
administrator, which can be terminated at any time, the total operating
expenses for the Class Y (Institutional) Shares and Class A (Individual)
Shares of the CoreFunds Balanced Fund would have been 1.05% and 1.30%,
respectively.
(10) Absent voluntary waivers, which can be terminated at any time, the total
operating expenses of the Class Y (Institutional) Shares and Class A
(Individual) Shares of the Pro Forma Combined Portfolio would be 1.03% and
1.28%, respectively.
EXAMPLE: An investor would pay the following expenses on a $1,000
investment, assuming (1) 5% annual return, and (2) redemption at the end
of the following periods:
<TABLE>
<CAPTION>
1 YEAR 3 YEARS 5 YEARS 10 YEARS
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Conestoga Balanced Fund
Institutional Shares..................................... $ 8 $26 N/A N/A
Retail Shares............................................ $31 $53 N/A N/A
CoreFunds Balanced Fund
Class Y (Institutional) Shares........................... $ 9 $30 $ 51 $114
Class A (Individual) Shares.............................. $44 $69 $ 95 $171
Pro Forma Combined
Class Y (Institutional) Shares........................... $ 8 $26 $ 44 $ 99
Class A (Individual) Shares.............................. $43 $65 $ 89 $157
</TABLE>
23
<PAGE>
<TABLE>
<CAPTION>
COREFUNDS
CONESTOGA SHORT-TERM PRO FORMA
SHORT-TERM INCOME FUND* COMBINED
INCOMEFUND ------------------------------ ------------------------------
-------------------------- CLASS Y CLASS A CLASS Y CLASS A
INSTITUTIONAL RETAIL (INSTITUTIONAL) (INDIVIDUAL) (INSTITUTIONAL) (INDIVIDUAL)
SHARES SHARES SHARES SHARES SHARES SHARES
------------- ----------- --------------- ------------- --------------- -------------
<S> <C> <C> <C> <C> <C> <C>
SHAREHOLDER TRANSACTION
EXPENSES
Maximum Sales Load Imposed on
Purchases...................... None 2.00% None None None 3.25%
Maximum Sales Load Imposed on
Reinvested Dividends (as a
percentage of offering price).. None None None None None None
Contingent Deferred Sales Charge
(as a percentage of original
purchase price or redemption
proceeds, as applicable)....... None None None None None None
Redemption Fee
(as a percentage of amount
redeemed, if applicable)....... None None None None None None
Exchange Fee..................... None None None None None None
ANNUAL FUND OPERATING
EXPENSES
(as a percentage of average net
assets)
Advisory Fees
(after fee waivers).............. .29%(1) .29%(1) N/A N/A .25%(1) .25%(1)
12b-1 Fees (after fee waivers)..... None .25%(3) N/A N/A None .25%(3)
Other Expenses(4)
(after fee waivers and/or expense
reimbursements).................. .34% .34% N/A N/A .21%(5) .21%(5)
Total Operating Expenses
(after fee waivers and/or expense
reimbursements).................. .63%(6) .88%(6) N/A N/A .46%(7) .71%(7)
</TABLE>
- ------------------
* The CoreFunds Short-Term Income Fund has not yet commenced operations. The
CoreFunds Short-Term Income Fund will continue the operations of the
Conestoga Short-Term Income Fund upon consummation of the Reorganization
relating to that Fund. (1) The maximum advisory fee for the Institutional
Shares and Retail Shares of the Conestoga Short-Term Income Fund and for
the Class Y (Institutional) Shares and Class A (Individual) Shares of the
CoreFunds Short-Term Income Fund is .74%
24
<PAGE>
(2) 12b-1 fees for the Retail Shares of the Conestoga Short-Term Income Fund
have been reduced to reflect the voluntary waiver of fees by that Fund's
distributor. The Conestoga Short-Term Income Fund can pay up to 0.40% of
the average daily net assets of its Retail Shares as a 12b-1 fee to the
distributor.
(3) Under rules of the NASD, a 12b-1 fee may be treated as a sales charge for
certain purposes. Because the 12b-1 fee is an annual fee charged against
the assets of a Portfolio, long-term shareholders may indirectly pay more
in total sales charges than the economic equivalent of the maximum
front-end sales charge permitted by the rules of the NASD.
(4) Includes administration fees. Absent voluntary fee waivers, administration
fees are payable at the maximum annual rate of .17% of the Institutional
Shares and Retail Shares of the Conestoga Short-Term Income Fund.
(5) Other Expenses, before fee waivers and/or expense reimbursements, would be
0.30% and 0.30%, respectively, for the Class Y (Institutional) Shares and
Class A (Individual) Shares of the CoreFunds Short-Term Income Fund.
(6) Absent the voluntary waivers and reimbursements by the investment adviser
and administrator, which can be terminated at any time, the total operating
expenses for the Institutional and Retail Shares of the Conestoga
Short-Term Income Fund would be 1.08% and 1.48%, respectively.
(7) Absent voluntary waivers, which can be terminated at any time, the pro
forma total operating expenses of the Class Y (Institutional) Shares and
Class A (Individual) Shares of the CoreFunds Short-Term Income Fund would
be 1.04% and 1.29%, respectively.
EXAMPLE: An investor would pay the following expenses on a $1,000
investment, assuming (1) 5% annual return, and (2) redemption at the end of
the following periods:
<TABLE>
<CAPTION>
1 YEAR 3 YEARS 5 YEARS 10 YEARS
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Conestoga Short-Term Income Fund
Institutional Shares..................................... $ 6 $ 20 N/A N/A
Retail Shares............................................ $ 29 $ 48 N/A N/A
CoreFunds Short-Term Income Fund
Class Y (Institutional) Shares........................... N/A N/A N/A N/A
Class A (Individual) Shares.............................. N/A N/A N/A N/A
Pro Forma Combined
Class Y (Institutional) Shares........................... $ 5 $ 15 N/A N/A
Class A (Individual) Shares.............................. $ 40 $ 54 N/A N/A
</TABLE>
25
<PAGE>
<TABLE>
<CAPTION>
COREFUNDS
CONESTOGA INTERNATIONAL PRO FORMA
INTERNATIONAL GROWTH FUND COMBINED
EQUITY FUND ------------------------------ ------------------------------
-------------------------- CLASS Y CLASS A CLASS Y CLASS A
INSTITUTIONAL RETAIL (INSTITUTIONAL) (INDIVIDUAL) (INSTITUTIONAL) (INDIVIDUAL)
SHARES SHARES SHARES SHARES SHARES SHARES
------------- ----------- --------------- ------------- --------------- -------------
<S> <C> <C> <C> <C> <C> <C>
SHAREHOLDER TRANSACTION
EXPENSES
Maximum Sales Load Imposed on
Purchases...................... None 2.00% None 3.25% None 3.25%
Maximum Sales Load Imposed on
Reinvested Dividends (as a
percentage of offering price).. None None None None None None
Contingent Deferred Sales Charge
(as a percentage of original
purchase price or redemption
proceeds, as applicable)....... None None None None None None
Redemption Fee
(as a percentage of amount
redeemed, if applicable)....... None None None None None None
Exchange Fee..................... None None None None None None
ANNUAL FUND OPERATING
EXPENSES
(as a percentage of average net
assets)
Advisory Fees...................... 1.00% 1.00% .80% .80% .80% .80%
12b-1 Fees (after fee waivers)..... None .25%(2) None .25%(2) None .25%(2)
Other Expenses(3)
(after fee waivers and/or expense
reimbursements).................. .88% .88% .41%(4) .41%(4) .34%(5) .34%(5)
Total Operating Expenses
(after fee waivers and/or expense
reimbursements).................. 1.88% 2.13%(6) 1.21%(7) 1.46%(7) 1.14%(8) 1.39%(8)
</TABLE>
- ------------------
(1) 12b-1 fees for the Retail Shares of the Conestoga International Equity Fund
have been reduced to reflect the voluntary waiver of fees by that Fund's
distributor. The Conestoga International Equity Fund can pay up to 0.40% of
the average daily net assets of its Retail Shares as a 12b-1 fee to the
distributor.
(2) Under rules of the NASD, a 12b-1 fee may be treated as a sales charge for
certain purposes. Because the 12b-1 fee is an annual fee charged against the
assets of a Portfolio, long-term shareholders may indirectly pay more in
total sales charges than the economic equivalent of the maximum front-end
sales charge permitted by the rules of the NASD.
(3) Includes administration fees. Absent voluntary fee waivers, administration
fees are payable at the maximum annual rate of .25% of the Class Y
(Institutional) Shares and Class A (Individual) Shares of the CoreFunds
International Growth Fund.
(4) Other Expenses, before fee waivers and/or expense reimbursements, would have
been 0.50% and 0.50%, respectively, for the Class Y (Institutional) Shares
and Class A (Individual) Shares of the CoreFunds International Growth Fund.
(5) Other Expenses, before fee waivers and/or expense reimbursements, would be
0.43% and 0.43%, respectively, for the Class Y (Institutional) Shares and
Class A (Individual) Shares of the Pro Forma Combined Portfolio.
(6) Absent the voluntary waivers and reimbursements by the investment adviser
and administrator, which can be terminated at any time, the total operating
expenses for the Retail Shares of the Conestoga International Equity Fund
would have been 2.28%.
(7) Absent voluntary waivers, which can be terminated at any time, the total
operating expenses of the Class Y (Institutional) Shares and Class A
(Individual) Shares of the CoreFunds International Growth Fund would have
been 1.30% and 1.55%, respectively.
(8) Absent voluntary waivers, which can be terminated at any time, the total
operating expenses of the Class Y (Institutional) Shares and Class A
(Individual) Shares of the Pro Forma Combined Portfolio would be 1.23% and
1.48%, respectively.
26
<PAGE>
EXAMPLE: An investor would pay the following expenses on a $1,000
investment, assuming
(1) 5% annual return, and (2) redemption at the end of the following periods:
<TABLE>
<CAPTION>
1 YEAR 3 YEARS 5 YEARS 10 YEARS
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Conestoga International Equity Fund
Institutional Shares..................................... $19 $59 N/A N/A
Retail Shares............................................ $41 $85 N/A N/A
CoreFunds International Growth Fund
Class Y (Institutional) Shares........................... $12 $38 $ 66 $147
Class A (Individual) Shares.............................. $44 $77 $110 $201
Pro Forma Combined
Class Y (Institutional) Shares........................... $12 $36 $ 63 $139
Class A (Individual) Shares.............................. $46 $75 $106 $194
</TABLE>
27
<PAGE>
EXPENSE RATIOS -- CONESTOGA PORTFOLIOS. The following table sets forth (i)
the ratios of operating expenses to average net assets of the Conestoga
Portfolios for the fiscal year ended October 31, 1995 (a) after fee waivers and
expense reimbursements, and (b) absent fee waivers and expense reimbursements:
<TABLE>
<CAPTION>
FISCAL YEAR ENDED OCTOBER 31, 1995
--------------------------------------------
RATIO OF OPERATING RATIO OF OPERATING
EXPENSES TO AVERAGE EXPENSES TO AVERAGE
NET ASSETS AFTER NET ASSETS ABSENT
FEE WAIVERS AND FEE WAIVERS AND
EXPENSE EXPENSE
REIMBURSEMENTS REIMBURSEMENTS
--------------------- ---------------------
<S> <C> <C>
CONESTOGA PORTFOLIOS
Conestoga Cash Management Fund
Institutional Shares............................................... .56% .79%
Retail Shares...................................................... .74% .97%
Conestoga Tax-Free Fund
Institutional Shares............................................... .46% .83%
Retail Shares...................................................... .48% .88%
Conestoga U.S. Treasury Securities Fund
Institutional Shares............................................... .62% .78%
Retail Shares...................................................... .73% .79%
Conestoga Equity Fund
Institutional Shares............................................... 1.05% 1.10%
Retail Shares...................................................... 1.34% 1.53%
Conestoga Special Equity Fund
Institutional Shares............................................... .32% 1.97%
Retail Shares...................................................... .27% 2.24%
Conestoga Bond Fund
Institutional Shares............................................... .71% 1.12%
Retail Shares...................................................... .97% 1.44%
Conestoga Intermediate Income Fund
Institutional Shares............................................... .64% 1.15%
Retail Shares...................................................... .93% 1.51%
Conestoga Pennsylvania Tax-Free Bond Fund
Institutional Shares............................................... .51% 1.65%
Retail Shares...................................................... .51% 1.62%
Conestoga Balanced Fund
Institutional Shares............................................... .82% 1.07%
Retail Shares...................................................... 1.07% 1.32%
Conestoga Short-Term Income Fund
Institutional Shares............................................... .63% 1.08%
Retail Shares...................................................... .88% 1.33%
Conestoga International Equity Fund
Institutional Shares............................................... 1.88% 1.88%
Retail Shares...................................................... 2.13% 2.26%
</TABLE>
28
<PAGE>
EXPENSE RATIOS -- COREFUNDS PORTFOLIOS. The following tables set forth (i)
the ratios of operating expenses to average net assets of the CoreFunds
Portfolios for the fiscal year ended June 30, 1995 (a) after fee waivers and
expense reimbursements, and (b) absent fee waivers and expense reimbursements:
<TABLE>
<CAPTION>
FISCAL YEAR ENDED JUNE 30, 1995
--------------------------------------------
RATIO OF OPERATING RATIO OF OPERATING
EXPENSES TO AVERAGE EXPENSES TO AVERAGE
NET ASSETS AFTER NET ASSETS ABSENT
FEE WAIVERS AND FEE WAIVERS AND
EXPENSE EXPENSE
REIMBURSEMENTS REIMBURSEMENTS
--------------------- ---------------------
<S> <C> <C>
COREFUNDS PORTFOLIOS
CoreFunds Cash Reserve
Class Y (Institutional) Shares..................................... .48% .85%
Class C (Individual) Shares........................................ .73% 1.10%
CoreFunds Tax-Free Reserve
Class Y (Institutional) Shares..................................... .48% .85%
Class C (Individual) Shares........................................ .73% 1.10%
CoreFunds Treasury Reserve
Class Y (Institutional) Shares..................................... .48% .85%
Class C (Individual) Shares........................................ .73% 1.10%
CoreFunds Value Equity Fund
Class Y (Institutional) Shares..................................... .86% 1.10%
Class A (Individual) Shares........................................ 1.11% 1.35%
CoreFunds Special Equity Fund........................................... --(1) --(1)
CoreFunds Bond Fund..................................................... --(1) --(1)
CoreFunds Intermediate Bond Fund
Class Y (Institutional) Shares..................................... .60% .84%
Class A (Individual) Shares........................................ .85% 1.09%
CoreFunds Pennsylvania Municipal Bond Fund
Class Y (Institutional) Shares..................................... .39% 1.14%
Class A (Individual) Shares........................................ .64% 1.39%
CoreFunds Balanced Fund
Class Y (Institutional) Shares..................................... .73% 1.07%
Class A (Individual) Shares........................................ .98% 1.32%
CoreFunds Short-Term Income Fund........................................ --(1) --(1)
CoreFunds International Growth Fund
Class Y (Institutional) Shares..................................... 1.05% 1.19%
Class A (Individual) Shares........................................ 1.30% 1.44%
</TABLE>
- ------------------
(1) The CoreFunds Special Equity, Bond and Short-Term Portfolios will not
commence operations until the Reorganization is effective.
29
<PAGE>
VOTING INFORMATION. This Combined Proxy Statement/Prospectus is being
furnished in connection with the solicitation of proxies by Conestoga's Board of
Trustees in connection with a Special Meeting of Shareholders to be held at The
Wilmington Hilton, 630 Naamans Road, Wilmington, Delaware, on Friday, March 22,
1996 at 10:00 a.m. Eastern time (such meeting and any adjournments thereof
hereinafter referred to as the 'Meeting'). Only Shareholders of record at the
close of business on January 26, 1996 will be entitled to notice of and to vote
at the Meeting. Each share or fraction thereof is entitled to one vote or
fraction thereof and all shares will vote separately by Portfolio. Shares
represented by a properly executed proxy will be voted in accordance with the
instructions thereon, or if no specification is made, the persons named as
proxies will vote in favor of each proposal set forth in the Notice of Meeting.
Proxies may be revoked at any time before they are exercised by submitting to
Conestoga a written notice of revocation or a subsequently executed proxy or by
attending the Meeting and voting in person. For additional information,
including a description of the Shareholder vote required for approval of the
Reorganization Agreement and related transactions contemplated thereby,
including the approval of the interim investment advisory and sub-advisory
agreements, see 'Information Relating to Voting Matters.'
RISK FACTORS. The following discussion highlights the principal risk
factors associated with an investment in the Reorganizing Portfolios and the
Existing CoreFunds Portfolios and is qualified in its entirety by the more
extensive discussion of risk factors in 'Comparison of Investment Policies and
Risk Factors.'
Because of the similarities of the investment objectives and policies of
the Reorganizing Portfolios and the corresponding Existing CoreFunds Portfolios,
management believes that an investment in an Existing CoreFunds Portfolio
involves risks that are similar to those of the corresponding Reorganizing
Portfolio. These investment risks include those typically associated with
investing in a portfolio of high quality, short-term money market instruments in
the case of the money market portfolios; government or investment grade bonds in
the case of the taxable and tax-exempt bond portfolios; common stocks in the
case of the stock portfolios; and foreign securities in the case of the
international portfolios.
There are differences, however, between the Reorganizing Portfolios and the
Existing CoreFunds Portfolios as noted above under 'Summary -- Overview of the
Conestoga Portfolios and the CoreFunds Portfolios' and below under 'Comparison
of Investment Policies and Risk Factors.' These differences can result in
different risks. For example, the Conestoga Tax-Free Fund may invest in
securities with lower credit ratings than CoreFunds Tax-Free Reserve. In
addition, unlike the Existing CoreFunds Portfolios, the Reorganizing Portfolios
may invest their assets in securities rated in the lowest investment grade
rating category. Debt securities with the lowest investment grade rating do not
have outstanding investment characteristics and may have speculative
characteristics as well.
Although the money market portfolios offered by both Conestoga and
CoreFunds seek to maintain a stable net asset value of $1.00 per share, there is
no assurance they will be able to do so. The per share price of the other
portfolios will fluctuate with changes in value of the investments held by each
portfolio. Generally, the market value of debt securities will vary inversely to
changes in prevailing interest rates. Certain portfolios may seek to achieve
their investment objectives through investments in securities of foreign issuers
that involve risks not typically associated with U.S. issuers; debt instruments
with the lowest investment grade rating which are speculative; mortgage-backed
and asset-backed securities; illiquid instruments; and certain options, futures
and foreign currency transactions. Some of the Conestoga fixed-income and equity
portfolios may have higher portfolio turnover rates, resulting in higher
portfolio costs. Both the Reorganizing Portfolios and the Existing CoreFunds
Portfolios may engage in the use of reverse repurchase agreements that can cause
their net asset values
28
<PAGE>
to rise or fall faster than they otherwise would. Reverse repurchase agreements
involve the risk that the market value of the securities sold by a portfolio may
decline below the price of the securities the portfolio is obligated to
purchase. The policy of CoreFunds Tax-Free Reserve, Conestoga Pennsylvania
Tax-Free Bond Fund and CoreFunds Pennsylvania Municipal Bond Fund to invest
primarily in municipal obligations of Pennsylvania and the non-diversified
status of Conestoga Pennsylvania Tax-Free Bond Fund and CoreFunds Pennsylvania
Municipal Bond Fund, present additional risks as stated in their current
prospectuses. There is no assurance that any portfolio will achieve its
investment objective.
INFORMATION RELATING TO THE PROPOSED REORGANIZATION
Conestoga has entered into an agreement whereby its investment portfolios
are to be acquired by portfolios of CoreFunds. Significant provisions of this
Reorganization Agreement are summarized below; however, this summary is
qualified in its entirety by reference to the Reorganization Agreement, a copy
of which is attached as Appendix I to this Combined Proxy Statement/Prospectus.
DESCRIPTION OF THE REORGANIZATION AGREEMENT. There are eleven separate
Conestoga investment portfolios. Initially the assets of eight of them will be
acquired by eight similar investment portfolios currently offered by CoreFunds.
Subsequently, three portfolios will be acquired by three new CoreFunds
portfolios which have been organized to continue the operations of these
Conestoga Portfolios.
The Reorganization Agreement provides, first, that substantially all of the
assets and liabilities of the Reorganizing Portfolios will be transferred to the
Existing CoreFunds Portfolios identified in the table below. Not less than seven
calendar days thereafter, substantially all of the assets and liabilities of the
Continuing Portfolios will be transferred to the New CoreFunds Portfolios
identified in the table below. The holders of each class of shares of a
Conestoga Portfolio will receive the class of shares of the corresponding
CoreFunds Portfolio identified in the table. In the tables, (a) opposite the
name of each Conestoga Portfolio is the name of the CoreFunds Portfolio which
will issue shares to such Conestoga Portfolio, and (b) opposite the name of each
class of shares of the Conestoga Portfolio is the name of the class of shares of
the CoreFunds Portfolio to be distributed to the holders of such Conestoga
class. The number of each class of shares to be issued by the CoreFunds
Portfolios will have an aggregate net asset value equal to the aggregate net
asset value of the corresponding class or classes of shares of the particular
Conestoga Portfolio as of the regular close of the New York Stock Exchange,
currently 4:00 p.m. New York time, on the business day immediately preceding
each transaction. The three CoreFunds money market portfolios (Cash Reserve,
Tax-Free Reserve and Treasury Reserve) may have minute differences in
market-based net asset values per share from their Conestoga counterparts;
however, it is a condition of the Reorganization that the per-share amortized
cost values of these portfolios be identical with those of the Conestoga money
market portfolios.
<TABLE>
<CAPTION>
REORGANIZING PORTFOLIOS
AND CLASSES EXISTING COREFUNDS PORTFOLIOS AND CLASSES
- -------------------------------------------------------- ------------------------------------------
<S> <C>
Cash Management Fund Cash Reserve
Institutional Shares Class Y Shares -- Institutional
Retail Shares Class C Shares -- Individual
Tax-Free Fund Tax-Free Reserve
Institutional Shares Class Y Shares -- Institutional
Retail Shares Class C Shares -- Individual
U.S. Treasury Securities Fund Treasury Reserve
</TABLE>
29
<PAGE>
<TABLE>
<CAPTION>
REORGANIZING PORTFOLIOS
AND CLASSES EXISTING COREFUNDS PORTFOLIOS AND CLASSES
- -------------------------------------------------------- --------------------------------------------------------
<S> <C>
Institutional Shares Class Y Shares -- Institutional
Retail Shares Class C Shares -- Individual
Equity Fund Value Equity Fund
Institutional Shares Class Y Shares -- Institutional
Retail Shares Class A Shares -- Individual
Intermediate Income Fund Intermediate Bond Fund
Institutional Shares Class Y Shares -- Institutional
Retail Shares Class A Shares -- Individual
Pennsylvania Tax-Free Bond Fund Pennsylvania Municipal Bond Fund
Institutional Shares Class Y Shares -- Institutional
Retail Shares Class A Shares -- Individual
</TABLE>
30
<PAGE>
<TABLE>
<CAPTION>
REORGANIZING PORTFOLIOS
AND CLASSES EXISTING COREFUNDS PORTFOLIOS AND CLASSES
- -------------------------------------------------------- --------------------------------------------------------
<S> <C>
Balanced Fund Balanced Fund
Institutional Shares Class Y Shares -- Institutional
Retail Shares Class A Shares -- Individual
International Equity Fund International Growth Fund
Institutional Shares Class Y Shares -- Institutional
Retail Shares Class A Shares -- Individual
</TABLE>
<TABLE>
<CAPTION>
CONTINUING PORTFOLIOS AND CLASSES NEW COREFUNDS PORTFOLIOS AND CLASSES
- -------------------------------------------------------- --------------------------------------------------------
<S> <C>
Special Equity Fund Special Equity Fund
Institutional Shares Class Y Shares -- Institutional
Retail Shares Class A Shares -- Individual
Bond Fund Bond Fund
Institutional Shares Class Y Shares -- Institutional
Retail Shares Class A Shares -- Individual
Short-Term Income Fund Short-Term Income Fund
Institutional Shares Class Y Shares -- Institutional
Retail Shares Class A Shares -- Individual
</TABLE>
Conestoga expects to liquidate a limited number of holdings of certain of
the Conestoga Portfolios in light of the investment policies of CoreFunds and
the strategies of its investment adviser. Similarly, CoreFunds Value Equity Fund
expects to liquidate a limited number of holdings in light of its intention to
change its investment policies to resemble those of Conestoga Equity Portfolio.
The transaction costs that will result from such sales are expected to be
minimal.
The Reorganization Agreement provides that Conestoga will declare a
dividend or dividends prior to the Reorganizing Portfolios Transactions which,
together with all previous dividends, will have the effect of distributing to
the Shareholders of each of the Reorganizing Portfolios all undistributed
ordinary income earned and net capital gains realized up to and including the
effective time of the Reorganization.
Following the transfers of assets and liabilities from the Conestoga
Portfolios to the CoreFunds Portfolios, and the issuances of shares by the
CoreFunds Portfolios to the Conestoga Portfolios, each of the Conestoga
Portfolios will distribute the class of shares of the CoreFunds Portfolios pro
rata to the holders of classes of shares of the Conestoga Portfolios as
described above in liquidation of the Conestoga Portfolios. Each holder of a
class of shares of a Conestoga Portfolio will receive an amount of the
corresponding class of shares of the corresponding CoreFunds Portfolio of equal
value, plus the right to receive any declared and unpaid dividends or
distributions. Following the Reorganization, the registration of Conestoga as an
investment company under the 1940 Act will be terminated, and Conestoga will be
terminated under state law.
The stock transfer books of Conestoga will be permanently closed after the
Reorganization.
The Reorganization is subject to a number of conditions, including approval
of the Reorganization Agreement and the transactions contemplated thereby
described in this Combined Proxy Statement/Prospectus by the Shareholders of
Conestoga; the receipt of certain legal opinions described in the Reorganization
Agreement; the receipt of certain certificates from the parties concerning the
continuing accuracy of the representations and warranties in the Reorganization
Agreement and other matters; and the parties' performance in all material
respects of their agreements and undertakings in the Reorganization Agreement.
Assuming satisfaction of the conditions in the Reorganization Agreement, the
Reorganization Portfolios Transaction is expected to occur on or after April 8,
1996 and the Continuing Portfolios Transaction is expected to occur on or after
April 15, 1996.
The expenses of CoreFunds and of Conestoga incurred in connection with the
Reorganization will be borne by CoreStates Financial Corp and/or Meridian
Bancorp., Inc., except that the CoreFunds shall bear any registration fees
payable under the Securities Act of 1933 and state 'blue sky' laws, and
Conestoga shall bear any custody termination fees it incurs.
31
<PAGE>
The Reorganization may be abandoned prior to its consummation by the mutual
consent of the parties to the Reorganization Agreement. The Reorganization
Agreement provides further that at any time prior to or (to the fullest extent
permitted by law) after approval of the Reorganization Agreement by the
Shareholders of Conestoga (a) the parties thereto may, by written agreement
approved by their respective Boards of Trustees or Directors, or authorized
officers and with or without the approval of their Shareholders, amend any of
the provisions of the Reorganization Agreement; and (b) either party may waive
any breach by the other party or the failure to satisfy any of the conditions to
its obligations with or without the approval of such party's shareholders.
The Reorganization Agreement also provides that the Reorganization will be
contingent upon the consummation of the Holding Company Merger.
In its consideration and approval of the Reorganization at a meeting on
December 21, 1995, the Board of Trustees of Conestoga considered, primarily, the
pending merger between Meridian Bancorp, Inc., the parent company of MIC, and
CoreStates Financial Corp. If this merger is completed, the currently existing
investment advisory contract between Conestoga and MIC would be terminated.
Given that fact, MIC and CoreStates Advisers have recommended that each of the
Conestoga Portfolios be reorganized as described in this Combined Proxy
Statement/Prospectus shortly after the proposed merger of the bank holding
companies. The Board of Trustees of Conestoga considered the effect of the
proposed merger of the bank holding companies on Conestoga; the recommendation
of MIC and CoreStates Advisers with respect to the proposed consolidation of
Conestoga and CoreFunds; the fact that the Reorganization would constitute a
tax-free reorganization; and that the interests of Shareholders would not be
diluted as a result of the Reorganization.
Section 15(f) of the 1940 Act provides that when a change in the control of
an investment adviser occurs, the investment adviser or any of its affiliated
persons may receive any amount or benefit in connection therewith under certain
conditions. One condition is that for three years thereafter, at least 75% of
the board of directors of a surviviving investment company are not 'interested
persons' of the company's investment adviser or of the investment adviser of the
terminating investment company. Another condition is that no 'unfair burden' is
imposed on the investment company as a result of the transaction relating to the
change of control, or any express or implied terms, conditions or understandings
applicable thereto. The term 'unfair burden' as defined in the 1940 Act includes
any arrangement during the two-year period after the transaction whereby the
investment adviser (or predecessor or successor adviser), or any 'interested
person' of any such adviser, receives or is entitled to receive any
compensation, directly or indirectly, from the investment company or its
security holders (other than fees for bona fide investment advisory or other
services) or from any person in connection with the purchase or sale of
securities or other property to, from or on behalf of the investment company
(other than fees for bona fide principal underwriting services). CoreFunds
intends to comply with the conditions set forth in Section 15(f)
After consideration of all of the foregoing factors, together with certain
other factors and information considered to be relevant, Conestoga's Trustees
unanimously approved the Reorganization Agreement and directed that it be
submitted to shareholders for approval. CONESTOGA'S BOARD OF TRUSTEES RECOMMENDS
THAT SHAREHOLDERS VOTE 'FOR' APPROVAL OF THE REORGANIZATION AGREEMENT.
The Board of Trustees of Conestoga has not determined what action it will
take in the event the shareholders of any Conestoga Portfolio fail to approve
the Reorganization Agreement or for any reason the Reorganization is not
consummated. In either such event, the Trustees may choose to consider approval
of a new investment advisory agreement with CoreStates Advisers, alternative
dispositions of Conestoga's assets, including the sales of assets to, or merger
with, another investment company, or the possible liquidation of any of its
Portfolios.
32
<PAGE>
At a meeting held on December 7, 1995, the CoreFunds Board of Directors
considered the proposed Reorganization. Based upon their evaluation of the
relevant information provided to them, and in light of their fiduciary duties
under federal and state law, the Board of Directors unanimously determined that
the proposed Reorganization was in the best interests of CoreFunds and their
respective shareholders and that the interests of existing shareholders of
CoreFunds would not be diluted as a result of effecting the transaction.
CAPITALIZATION. Because the Reorganizing Portfolios will be combined in
the Reorganization with the Existing CoreFunds Portfolios, the total
capitalization of each of the Existing CoreFunds Portfolios after the
Reorganization is expected to be greater than the current capitalization of the
corresponding Reorganizing Portfolios. The following table sets forth as of
October 31, 1995, (i) the capitalization of each of the Reorganizing Portfolios
and (ii) the pro forma capitalization of each of the Existing CoreFunds
Portfolios as adjusted to give effect to the Reorganization. If consummated, the
capitalization of each Portfolio is likely to be different at the time of the
Reorganizing Portfolios Transaction as a result of daily share purchase and
redemption activity in the Portfolios.
<TABLE>
<CAPTION>
CONESTOGA CASH COREFUNDS CASH PRO FORMA
MANAGEMENT FUND RESERVE COMBINED
----------------- ---------------- ----------------
<S> <C> <C> <C>
Total Net Assets........................................... $ 237,878,356 $ 589,145,282 $ 827,023,638
Retail/Individual Shares................................. $3,358,438 $19,112,811 $22,471,249
Institutional Shares..................................... $234,519,918 $570,032,471 $804,552,389
Shares Outstanding......................................... 238,013,959 589,151,299 827,165,258
Retail/Individual Shares................................. 3,361,129 19,113,426 22,474,555
Institutional Shares..................................... 234,652,830 570,037,873 804,690,703
----------------- ---------------- ----------------
Net Asset Value Per Share
Retail/Individual Shares................................. $1.00 $1.00 $1.00
Institutional Shares..................................... $1.00 $1.00 $1.00
</TABLE>
<TABLE>
<CAPTION>
CONESTOGA COREFUNDS PRO FORMA
TAX-FREE FUND TAX-FREE RESERVE COMBINED
-------------- ---------------- ----------------
<S> <C> <C> <C>
Total Net Assets............................................. $ 61,791,142 $ 69,441,351 $ 131,232,493
Retail/Individual Shares................................... $1,282,263 $1,494,128 $2,776,391
Institutional Shares....................................... $60,508,879 $67,947,223 $128,456,102
Shares Outstanding........................................... 61,773,578 69,490,610 131,264,188
Retail/Individual Shares................................... 1,281,648 1,495,186 2,776,834
Institutional Shares....................................... 60,491,930 67,995,424 128,487,354
-------------- ---------------- ----------------
Net Asset Value Per Share
Retail/Individual Shares................................... $1.00 $1.00 $1.00
Institutional Shares....................................... $1.00 $1.00 $1.00
</TABLE>
<TABLE>
<CAPTION>
CONESTOGA
U.S. TREASURY COREFUNDS PRO FORMA
SECURITIES FUND TREASURY RESERVE COMBINED
---------------- ---------------- ----------------
<S> <C> <C> <C>
Total Net Assets............................................ $ 445,258,938 $ 490,560,703 $ 935,819,641
Retail/Individual Shares.................................. $730,223 $16,316,781 $17,047,004
Institutional Shares...................................... $444,528,715 $474,243,922 $918,772,637
Shares Outstanding.......................................... 445,152,418 490,544,813 935,697,231
Retail/Individual Shares.................................. 729,855 16,316,145 17,046,000
Institutional Shares...................................... 444,422,563 474,228,668 918,651,231
---------------- ---------------- ----------------
Net Asset Value Per Share
Retail/Individual Shares.................................. $1.00 $1.00 $1.00
Institutional Shares...................................... $1.00 $1.00 $1.00
</TABLE>
33
<PAGE>
<TABLE>
<CAPTION>
CONESTOGA COREFUNDS PRO FORMA
EQUITY FUND VALUE EQUITY FUND COMBINED
---------------- ----------------- ----------------
<S> <C> <C> <C>
Total Net Assets........................................... $ 384,942,920 $ 33,132,707 $ 418,075,627
Retail/Individual Shares................................. $6,590,598 $3,444,452 $10,035,050
Institutional Shares..................................... $ 878,352,322 $ 29,688,255 $ 408,040,577
Shares Outstanding......................................... 22,545,761 2,377,850 24,486,293
Retail/Individual Shares................................. 385,954 246,805 587,667
Institutional Shares..................................... 22,159,807 2,131,045 23,898,626
---------------- ----------------- ----------------
Net Asset Value Per Share
Retail/Individual Shares................................. $17.08 $13.96 $17.08
Institutional Shares $17.07 $13.93 $17.07
</TABLE>
<TABLE>
<CAPTION>
CONESTOGA COREFUNDS
INTERMEDIATE INTERMEDIATE PRO FORMA
INCOME FUND BOND FUND COMBINED
--------------------- -------------- ----------------
<S> <C> <C> <C>
Total Net Assets........................................ $ 139,472,996 $ 57,389,991 $ 196,862,987
Retail/Individual Shares.............................. $1,229,481 $2,025,303 $3,254,784
Institutional Shares.................................. $ 138,243,515 $ 55,364,688 $ 193,608,203
Shares Outstanding...................................... 13,024,666 5,807,248 19,920,374
Retail/Individual Shares.............................. 114,721 204,958 329,380
Institutional Shares.................................. 12,909,945 5,602,290 19,590,994
--------------------- -------------- ----------------
Net Asset Value Per Share
Retail/Individual Shares.............................. $10.72 $9.88 $9.88
Institutional Shares.................................. $10.71 $9.88 $9.88
</TABLE>
<TABLE>
<CAPTION>
CONESTOGA COREFUNDS
PENNSYLVANIA PENNSYLVANIA PRO FORMA
TAX-FREE BOND FUND MUNICIPAL BOND FUND COMBINED
------------------- -------------------- -------------
<S> <C> <C> <C>
Total Net Assets....................................... $ 6,796,328 $ 3,095,793 $ 9,892,121
Retail/Individual Shares............................. $819,697 $306,516 $ 1,126,213
Institutional Shares................................. $ 5,976,630 $ 2,789,277 $ 8,765,907
Shares Outstanding..................................... 664,126 297,107 949,346
Retail/Individual Shares............................. 80,106 29,416 108,082
Institutional Shares................................. 584,020 267,691 841,264
------------------- -------------------- -------------
Net Asset Value Per Share
Retail/Individual Shares............................. $10.23 $10.42 $10.42
Institutional Shares................................. $10.23 $10.42 $10.42
</TABLE>
<TABLE>
<CAPTION>
CONESTOGA COREFUNDS PRO FORMA
BALANCED FUND BALANCED FUND COMBINED
-------------- -------------- ----------------
<S> <C> <C> <C>
Total Net Assets............................................... $ 38,563,960 $ 67,973,567 $ 106,537,527
Retail/Individual Shares..................................... $69,340 $2,539,380 $2,608,720
Institutional Shares......................................... $ 38,494,620 $ 65,434,187 $ 103,928,807
Shares Outstanding............................................. 3,713,929 5,785,948 9,067,987
Retail/Individual Shares..................................... 6,675 216,129 222,030
Institutional Shares......................................... 3,707,254 5,569,819 8,845,957
-------------- -------------- ----------------
Net Asset Value Per Share
Retail/Individual Shares..................................... $10.39 $11.75 $11.75
Institutional Shares......................................... $10.38 $11.75 $11.75
</TABLE>
34
<PAGE>
<TABLE>
<CAPTION>
CONESTOGA COREFUNDS
INTERNATIONAL INTERNATIONAL PRO FORMA
EQUITY FUND GROWTH FUND COMBINED
-------------- ---------------- ----------------
<S> <C> <C> <C>
Total Net Assets............................................. $ 13,381,000 $ 112,404,878 $ 125,785,878
Retail/Individual Shares................................... $9,000 $1,932,923 $1,941,923
Institutional Shares....................................... $ 13,372,000 $ 110,471,955 $ 123,843,955
Shares Outstanding........................................... 1,215,740 8,832,512 9,883,640
Retail/Individual Shares................................... 758 152,205 152,898
Institutional Shares....................................... 1,214,982 8,680,307 9,730,742
-------------- ---------------- ----------------
Net Asset Value Per Share
Retail/Individual Shares................................... $10.99 $12.70 $12.70
Institutional Shares....................................... $11.01 $12.73 $12.73
</TABLE>
FEDERAL INCOME TAX CONSEQUENCES. Consummation of the Reorganization is
subject to the condition that Conestoga and CoreFunds receive an opinion from
Morgan, Lewis & Bockius LLP to the effect that for federal income tax purposes:
(i) the transfer of all of the assets and liabilities of each of the
Reorganizing Portfolios (except in each case for a cash reserve in an amount
necessary for the discharge of all known and reasonably anticipated liabilities
of each of the Reorganizing Portfolios) and each of the Continuing Funds to the
corresponding CoreFunds Portfolio in exchange for shares of the corresponding
CoreFunds Portfolio and liquidating distributions to Shareholders of the
Conestoga Portfolios of the shares of the CoreFunds Portfolio so received, as
described in the Reorganization Agreement, will constitute reorganizations
within the meaning of Section 368(a)(1)(C), Section 368(a)(1)(D) or Section
368(a)(1)(F) of the Internal Revenue Code of 1986, as amended, and with respect
to the Reorganization, each Conestoga Portfolio and CoreFunds Portfolio will be
considered 'a party to a reorganization' within the meaning of Section 368(b) of
the Code; (ii) no gain or loss will be recognized by the Conestoga Portfolios as
a result of such transactions; (iii) no gain or loss will be recognized by the
CoreFunds Portfolios as a result of such transactions; (iv) no gain or loss will
be recognized by the Shareholders of any Conestoga Portfolio on the distribution
to them by Conestoga of shares of any Class of the corresponding CoreFunds
Portfolio in exchange for their shares of any class of the Conestoga Portfolio;
(v) the aggregate basis of the CoreFunds Portfolio shares received by a
shareholder of a Conestoga Portfolio will be the same as the aggregate basis of
the Shareholder's Conestoga Portfolio shares immediately prior to the
Reorganization; (vi) the basis of each CoreFunds Portfolio in the assets of the
corresponding Conestoga Portfolio received pursuant to the Reorganization will
be the same as the basis of the assets in the hands of the Conestoga Portfolio
immediately before the Reorganization; (vii) a shareholder's holding period for
CoreFunds Portfolio shares will be determined by including the period for which
the shareholder held the Conestoga Portfolio shares exchanged therefor, provided
that the shareholder held such Conestoga Portfolio shares as a capital asset;
and (viii) each CoreFunds Portfolio's holding period with respect to the assets
received in the Reorganization will include the period for which such assets
were held by the corresponding Conestoga Portfolio.
CoreFunds and Conestoga have not sought a tax ruling from the Internal
Revenue Service ('IRS'), but are acting in reliance upon the opinion of counsel
discussed in the previous paragraph. That opinion is not binding on the IRS and
does not preclude the IRS from adopting a contrary position. Shareholders should
consult their own advisers concerning the potential tax consequences to them,
including state and local income taxes.
COMPARISON OF INVESTMENT POLICIES AND RISK FACTORS
The investment objectives and policies of the Reorganizing Portfolios are,
in many respects, similar to those of the corresponding Existing CoreFunds
Portfolios. There are, however, certain differences. The following discussion
summarizes some of the more significant similarities and differences in the
investment policies and risk factors of the Reorganizing Portfolios and
corresponding Existing CoreFunds Portfolios and is qualified in its entirety by
the discussion elsewhere herein, and in the prospectuses and statements of
additional information of the Reorganizing Portfolios and the
35
<PAGE>
Existing CoreFunds Portfolios incorporated herein by reference.
CONESTOGA CASH MANAGEMENT FUND AND COREFUNDS CASH RESERVE
Each Fund is a money market fund that seeks to maintain a net asset value
of $1.00 per share, although there is no assurance either will be able to do so.
Both the Conestoga Cash Management Fund and CoreFunds Cash Reserve may invest in
a broad range of U.S. dollar-denominated, high quality, short-term instruments,
including government obligations, commercial paper, asset-backed securities,
bank obligations and repurchase agreements.
Both Funds may invest their assets in securities that are rated in the
highest two rating categories by a nationally recognized statistical rating
organization (a 'Rating Agency'), provided that investments in securities that
are not 'First Tier Securities' (as defined below) may not exceed 5% of their
assets, and investments in securities of any single issuer that is not 'First
Tier' may not exceed the greater of 1% of a Fund's total assets or $1 million.
'First Tier Securities' are securities that (i) are rated in the highest rating
category by a Rating Agency; (ii) are rated in the highest rating category by at
least two Rating Agencies, if rated by more than one Rating Agency; (iii) have
no short-term rating, but have been issued by an issuer that has other
outstanding short-term obligations that have been so rated and are of comparable
quality; and (iv) are unrated but have been determined to be of comparable
quality. Commercial paper purchased by either Fund must be rated in the highest
rating category.
Both Funds may invest in 'stripped' U.S. Treasury obligations ('STRIPS'),
may purchase receipts in U.S. Treasury obligations (e.g., 'TIGRs' and 'CATS')
and zero coupon securities. These securities may exhibit greater price
volatility than ordinary debt securities because of the manner in which their
principal and interest are returned to investors. Conestoga Cash Management Fund
may not purchase zero coupon securities if, immediately after such purchase,
more than 5% of its net assets would be invested in such obligations. CoreFunds
Cash Reserve has no explicit limit on its investment in such securities.
Both Funds may invest in U.S. dollar denominated bank obligations of
foreign and domestic banks such as certificates of deposit, time deposits,
bankers' acceptances, Eurodollar Certificates of Deposit, Eurodollar Time
Deposits, Canadian Time Deposits and Yankee Certificates of Deposit.
The Conestoga Cash Management Fund will not invest in excess of 10% of its
total assets in time deposits, including Eurodollar Time Deposits and Canadian
Time Deposits but not including certificates of deposit, with maturities in
excess of seven days which are subject to penalties upon early withdrawal.
CoreFunds Cash Reserve is not bound by this restriction.
CONESTOGA U.S. TREASURY SECURITIES FUND AND COREFUNDS TREASURY RESERVE.
Each Fund is a money market fund that seeks to maintain a net asset value
of $1.00 per share, although there is no assurance either will be able to do so.
Both Funds invest exclusively in short-term obligations issued by the U.S.
Treasury, including STRIPS, some of which may be subject to repurchase
agreements collateralized by the underlying U.S. Treasury obligations.
CONESTOGA TAX-FREE FUND AND COREFUNDS TAX-FREE RESERVE
Each Fund is a money market fund that seeks to maintain a net asset value
of $1.00 per share, although there is no assurance they will be able to do so.
Both Funds invest at least 80% of their assets in municipal securities, the
interest on which is both exempt from regular Federal income tax and is not an
item of tax preference for purposes of the Federal alternative minimum tax.
Conestoga Tax-Free Fund may invest in securities rated in the two highest
rating categories by a Rating Agency, or, if unrated, are determined to be of
comparable quality. CoreFunds Tax-Free Reserve's investments in securities that
are not 'First Tier Securities' may not exceed 5% of its assets, and investment
in securities of any single issuer that is not 'First Tier' may not exceed the
greater of 1% of the Fund's total assets of $1 million.
36
<PAGE>
Both Funds invest in the same types of municipal securities. Both are
permitted to invest up to 20% of their total assets in taxable obligations for
temporary defensive purpose or when sufficient tax-exempt securities are not
available. Conestoga Tax-Free Fund's investment policies permit that Fund to
invest up to 100% of its assets in taxable obligations for temporary defensive
purposes. Taxable obligations eligible for purchase by the Funds include, but
are not limited to obligations of the U.S. Government, its agencies and
instrumentalities, debt securities (including taxable commercial paper) of
issuers having the highest short-term rating assigned by a Rating Agency, bank
obligations, repurchase agreements and reverse repurchase agreements.
Both Funds may enter into when-issued transactions. These transactions are
arrangements in which a fund purchases securities with payment and delivery
scheduled for a future time. The seller's failure to complete these transactions
may cause a fund to miss a price or a yield considered to be advantageous.
Settlement dates may be a month or more after entering into these transactions,
and the market values of the securities purchases may vary from the purchase
prices. Accordingly, a fund may pay more or less than the market value of the
securities on the settlement date. Commitments to purchase when-issued
securities will not exceed 25% of either Fund's total assets and will not be
purchased for speculative purposes.
CoreStates Advisers intends to invest, when possible, the CoreFunds
Tax-Free Reserve's assets in municipal securities, the interest on which is
exempt from Pennsylvania personal income tax ('Pennsylvania Municipal
Securities'), provided the investment is consistent with the Fund's investment
objective, policies and status as a diversified investment company. To the
extent that the Fund's assets are so concentrated in Pennsylvania Municipal
Securities, it would be subject to the peculiar risks presented by the laws and
economic conditions of Pennsylvania to a greater extent than it would be if its
assets were not so concentrated.
CoreFunds Tax-Free Reserve may, unlike Conestoga Tax-Free Fund, invest in
municipal lease obligations. Municipal lease obligations are issued by a state
or local government or authority to acquire land and a wide variety of equipment
and facilities. These obligations typically are not fully backed by the
municipality's credit, and their interest may become taxable if the lease is
assigned. If funds are not appropriated for the following year's lease payments,
the lease may terminate, with the possibility of default on the lease obligation
and significant loss to a Fund. Certificates of participation in municipal lease
obligations or installment sales contracts entitle the holder to a proportionate
interest in the lease-purchase payments made.
CONESTOGA EQUITY FUND AND COREFUNDS VALUE EQUITY FUND.
It is expected that the CoreFunds Value Equity Fund will change its name to
'CoreFunds Equity Fund' and adopt investment policies that are substantially
identical to Conestoga Equity Fund at the time of the Reorganization.
The investment policies of both Funds are similar. The principal difference
between the policies is that under normal market condition, 80% of the Conestoga
Equity Fund's assets will be invested in common stock whereas CoreFunds Value
Equity Fund is only required to hold 75% of its assets in equity securities
which may include common stock. CoreFunds Value Equity Fund has a broader range
of eligible investments which include common stocks, preferred stocks and
convertible securities. Both Funds may invest portions of their assets in
short-term and fixed income vehicles. There are differences in the quality of
the debt investments each Fund may make. Conestoga Equity Fund may invest in
fixed income securities rated in the four highest rating categories by a Rating
Agency whereas CoreFunds Value Equity Fund is limited to fixed income securities
rated in the highest rating category. Similarly, short-term debt securities
invested in by Conestoga Equity Fund may be rated in the two highest rating
categories by a Rating Agency whereas CoreFunds Value Equity is limited to
short-term debt securities rated in the highest rating category.
Conestoga Equity Fund may also purchase put and call options on securities
for the purposes of hedging against market risks related to its portfolio
securities. Such put and call options must be listed on a national securities
exchange and may not exceed 5% of the Fund's net assets. Purchasing options
37
<PAGE>
is a specialized investment technique that entails a substantial risk of a
complete loss of the amounts paid as premiums to writers of options. Conestoga
Equity Fund may also engage in writing call options. Conestoga Equity Fund will
write only covered call options (options on securities owned by the Fund).
Conestoga Equity Fund will forego any capital appreciation above the exercise
price on securities on which it has written a call option. In order to close out
a call option it has written, Conestoga Equity Fund will enter into a 'closing
purchase transaction' -- the purchase of a call option on the same security with
the same exercise price and expiration date as the call option which the Fund
previously wrote on a particular security. When a portfolio security subject to
a call option is sold, Conestoga Equity Fund will effect a closing purchase
transaction to close out any existing call option on that security. If Conestoga
Equity Fund is unable to effect a closing purchase transaction, it will not be
able to sell the underlying security until the option expires or the Fund
delivers the underlying security upon exercise. Under normal conditions, it is
not expected that the underlying value of portfolio securities subject to such
options would exceed 50% of the net assets of Conestoga Equity Fund. CoreFunds
Value Equity Fund, as a matter of fundamental policy, is not permitted to engage
in options transactions.
Conestoga Equity Fund may invest in the securities of foreign issuers by
acquiring both sponsored and unsponsored American Depositary Receipts ('ADRs').
ADRs are receipts issued by a bank or trust company in the United States
evidencing ownership of underlying securities of a foreign issuer. Unsponsored
ADRs are organized independently and without the cooperation of the issuer of
the underlying securities. As a result, available information concerning the
issuer may not be as current as for sponsored ADRs, and the prices of
unsponsored ADRs may be more volatile than if such instruments were sponsored by
the issuer. Conestoga Equity Fund may also invest in securities issued by
foreign branches of U.S. banks and foreign banks, in Canadian commercial paper,
and in Europaper (U.S. dollar-denominated commercial paper of a foreign issuer).
By contrast, CoreFunds Value Equity Fund is not expressly permitted to invest in
securities of foreign issuers and may only invest in short-term debt obligations
of domestic branches of U.S. banks.
For many foreign securities, U.S. dollar-denominated ADRs, which are traded
in the United States on exchanges or over-the-counter, are issued by domestic
banks. ADRs represent the right to receive securities of foreign issuers
deposited in a domestic bank or a correspondent bank. ADRs do not eliminate the
risk inherent in investing in the securities of foreign issuers. However, by
investing in ADRs rather than directly in stock of foreign issuers, the
Conestoga Equity Fund can avoid currency risks during the settlement period for
either purchases or sales. In general, there is a large, liquid market in the
United States for many ADRs. The information available for ADRs is subject to
the accounting, auditing and financial reporting standards of the domestic
market or exchange on which they are traded, which standards are more uniform
and more exacting than those to which many foreign issuers may be subject.
Conestoga Equity Fund may also invest in European Depositary Receipts, or EDRs,
which are receipts evidencing an arrangement with a European bank similar to
that for ADRs and are designed for use in the European securities markets. EDRs
are not necessarily denominated in the currency of the underlying security.
Certain ADRs and EDRs, typically those denominated as unsponsored, require
the holders thereof to bear most of the costs of such facilities while issuers
of sponsored facilities normally pay more of the costs thereof. The depositary
of an unsponsored facility frequently is under no obligation to distribute
shareholder communications received from the issuer of the deposited securities
or to pass through the voting rights to facility holders in respect to the
deposited securities, whereas the depositary of a sponsored facility typically
distributes shareholder communications and passes through the voting rights.
Investment in securities of foreign issuers involves certain risks not
ordinarily associated with investments in securities of domestic issuers. Such
risks include fluctuations in foreign exchange rates, difficulties in predicting
international trade patterns, political, social and economic instability in the
country of the issuer, foreign trading practices (including higher trading
commissions, custodial charges and delayed settlements), foreign withholding and
income taxation, the possible establishment of exchange controls or the adoption
of other foreign governmental restrictions (which might adversely
38
<PAGE>
affect the payment of principal and interest), difficulty in obtaining and
enforcing judgments against foreign issuers, and the possible imposition of
exchange controls or other foreign governmental laws or restrictions. With
respect to certain countries, there is also the possibility of expropriation of
assets, nationalization of assets, limits on removal of currency or other
assets, confiscatory taxation, political or social instability or diplomatic
developments which could adversely affect investments in those countries.
Foreign companies generally are not subject to uniform accounting, auditing
and financial reporting standards comparable to those applicable to U.S.
domestic companies. There is generally less government regulation of securities
exchanges, brokers and listed companies abroad than in the U.S. Confiscatory
taxation or diplomatic developments could also affect investment in those
countries. In addition, foreign branches of U.S. banks, foreign banks and
foreign issuers may be subject to less stringent reserve requirements and to
different accounting, auditing, reporting, and recordkeeping standards than
those applicable to domestic branches of U.S. banks and U.S. domestic issuers.
CONESTOGA INTERMEDIATE INCOME FUND AND COREFUNDS INTERMEDIATE BOND FUND
It is expected that the CoreFunds Intermediate Bond Fund will change its
name to 'CoreFunds Short Intermediate Bond Fund' prior to the Reorganization.
The investment policies of these Funds are similar. The principle
difference is that Conestoga Intermediate Income Fund will normally invest 80%
of its total assets in debt securities of all types whereas CoreFunds
Intermediate Bond Fund intends, under normal market conditions, to invest 65% of
its total assets in bonds and 35% or less in other debt securities. Both Funds
are permitted to have an average weighted maturity of three to ten years,
however, CoreFunds Intermediate Bond Fund currently maintains a maximum average
maturity of no more than five years pursuant to a non-fundamental investment
policy which can be changed without shareholder approval. CoreFunds expects to
present to the shareholders of the Intermediate Bond Fund a change in
fundamental policy requiring the Fund to have an average weighted maturity
between one and five years. The types of debt securities eligible for investment
by both Funds are the same, with the exception that debt securities in Conestoga
Intermediate Bond Fund may be rated in the four highest rating categories by a
Rating Agency whereas CoreFunds Intermediate Bond Fund is limited to investments
in the three highest rating categories.
CONESTOGA PENNSYLVANIA TAX-FREE BOND FUND AND COREFUNDS PENNSYLVANIA MUNICIPAL
BOND FUND
The Funds have similar, but not identical, investment policies. Since both
invest primarily in Pennsylvania Municipal Securities, the Funds are subject to
the risk that the value of their shares may be especially affected by factors
pertaining to the economy of Pennsylvania and the ability of issuers of
Pennsylvania Municipal Securities to meet their obligations. Both Funds are
classified as non-diversified investment companies under the 1940 Act, which
means that since a relative high percentage of assets of each Fund may be
invested in the obligations of a limited number of issuers, the value of the
shares of a Fund may be more susceptible to any single economic, political or
regulatory occurrence then shares of a diversified investment company.
Both Funds invest 80% of their total assets in municipal securities, the
interest on which is exempt from federal income tax. Conestoga Pennsylvania
Tax-Free Bond Fund normally invests at least 80% of its total assets in
Pennsylvania Municipal Securities whereas the policies of CoreFunds Pennsylvania
Municipal Bond Fund state that it is only required to invest 65% of its total
assets in Pennsylvania Municipal Securities.
Conestoga Pennsylvania Tax-Free Bond Fund may invest in debt obligations
rated in one of the four highest rating categories by a Rating Agency, whereas
CoreFunds Pennsylvania Municipal Bond Fund may only purchase securities rated in
one of the three highest rating categories. CoreStates Advisers, however, does
have the discretion to permit it to invest 20% of the Fund's assets in municipal
securities rated in the fourth highest category. Both Funds may invest in
municipal notes.
39
<PAGE>
CoreFunds Pennsylvania Municipal Bond Fund may invest in municipal notes rated
in one of the two highest rating categories by a Rating Agency whereas Conestoga
Pennsylvania Tax-Free Bond Fund is limited to municipal notes in the highest
rating category. Both Funds may invest in when-issued securities and municipal
leases. See 'Comparison of Investment Policies and Risk Factors -- Conestoga
Tax-Free Fund and CoreFunds Tax-Free Reserve' for a discussion of when-issued
securities and municipal leases.
CONESTOGA BALANCED FUND AND COREFUNDS BALANCED FUND
The investment policies of these Funds are similar. The principal
difference is that Conestoga Balanced Fund invests at least 30% of its total
assets in fixed income securities and no more than 80% in equity securities,
whereas CoreFunds Balanced Fund is required to invest only 25% of its total
assets in fixed income securities with the remainder in common stocks. Fixed
income securities acquired by Conestoga Balanced Fund are rated in one of the
four highest rating categories by a Rating Agency whereas fixed income
securities acquired by CoreFunds Balanced Fund must be rated in one of the three
highest rating categories. The equity and fixed income securities eligible for
purchase by both Funds are substantially the same. Both Funds may invest in
securities of foreign issuers using ADRs. See 'Comparison of Investment Policies
and Risk Factors -- Conestoga Equity Fund and CoreFunds Value Equity Fund' for a
description of ADRs and the risk factors of investment in foreign issuers.
CONESTOGA INTERNATIONAL EQUITY FUND AND COREFUNDS INTERNATIONAL GROWTH FUND
The investment policies of both Funds are similar. Conestoga International
Equity Fund invests at least 65% of its assets in an internationally diversified
portfolio of equity securities and may invest up to 35% of its assets in U.S.
companies. CoreFunds International Growth Fund has the same 65% diversification
requirement but has no express statement as to permissible investments in U.S.
companies. Both Funds intend to invest at least 65% of their total assets in
securities traded in at least three foreign countries.
Both Funds invest directly in the securities of foreign issuers. Direct
investments in foreign securities generally involve higher costs than
investments in U.S. securities, including higher transaction costs as well as
the imposition of additional taxes by foreign governments. In addition, foreign
investments may include additional risks associated with currency exchange
rates, less complete financial information about the issuers, less market
liquidity and political instability. See 'Comparison Investment Policies and
Risk Factors -- Conestoga Equity Fund and CoreFunds Value Equity Fund' for a
discussion of ADRs and the risk factors of investment in foreign issuers. In
furtherance of their investment objectives, each Fund may engage in foreign
currency transactions including forward currency contracts, futures, contracts
or options transactions. The principal difference is that Conestoga
International Equity Fund may only purchase puts and calls up to 5% of its net
assets and write covered calls up to 50% of its net assets whereas CoreFunds
International Growth Fund may purchase, write or sell options on securities
(including puts and calls) only to the extent obligations under such
transactions represent not more than 20% of its total assets.
INVESTMENT POLICIES AND RISKS -- GENERAL
The investment objective of each of the Conestoga Cash Management Fund,
Tax-Free Fund, U.S. Treasury Securities Fund, Equity Fund, Special Equity Fund,
Bond Fund, Intermediate Income Fund, Pennsylvania Tax-Free Bond Fund and of each
of the Existing CoreFunds Portfolios is fundamental, meaning that it may not be
changed without a vote of the holders of a majority of the Fund's outstanding
shares, as defined by the 1940 Act. The investment objective of each of the
Conestoga International Equity Fund, Short-Term Income Fund and Balanced Fund is
not fundamental and may be changed by Conestoga's Board of Trustees. The
investment policies of the Conestoga Portfolios and CoreFunds are not
fundamental and may be changed by the respective Board of Trustees and
Directors.
This section describes certain policies and risks that are common to a
number of Reorganizing Portfolios and Existing CoreFunds Portfolios.
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Each Reorganizing Portfolio and each Existing CoreFunds Portfolio is
permitted to (i) enter into repurchase agreements and reverse repurchase
agreements; and (ii) purchase obligations of the U.S. Government, its agencies
and instrumentalities. Each Reorganizing Portfolio may invest in bank
obligations of issuers having capital, surplus and undivided profits in excess
of $100 million (as of the date of its most recently published financial
statements) whereas each Existing CoreFund Portfolio may only invest in bank
obligations of domestic branches of U.S. banks having total assets at the time
of purchase of $1 billion.
Each Reorganizing Portfolio and the CoreFunds Tax-Free Reserve,
Intermediate Bond Fund and Pennsylvania Municipal Bond Fund may enter into
when-issued transactions. See 'Comparison Investment Policies and Risk Factors
- -- Conestoga Tax-Free Fund and CoreFunds Tax-Free Reserve' for a discussion of
the risk factors involved in when-issued transactions.
The Conestoga Pennsylvania Tax-Free Bond Fund is permitted to enter into
stand-by commitments with respect to municipal securities. None of the Existing
CoreFunds Portfolios is permitted to participate in these transactions.
There are similarities between the Funds with respect to the types of money
market instruments they are permitted to purchase. Each Reorganizing Portfolio
may invest in a broad array of money market instruments, all rated in one of the
top two rating categories by a Rating Agency and (with the exception of
Conestoga Cash Management Fund, U.S. Treasuries Securities Fund and Tax-Free
Fund) may invest in commercial paper rated in the top two rating categories.
Conestoga Cash Management Fund, U.S. Treasury Securities Fund and Tax-Free Fund
may only invest in commercial paper rated in the highest rating category by a
Rating Agency. Each Existing CoreFunds Portfolio may also purchase money market
instruments and commercial paper; the CoreFunds Cash Reserve, Treasury Reserve,
Tax-Free Reserve, Value Equity Fund and International Growth Fund may only
purchase money market instruments and commercial paper that are rated by a
Rating Agency in the highest rating category for such instruments, and the
CoreFunds Balanced Fund, Intermediate Bond Fund and Pennsylvania Municipal Bond
Fund may purchase money market instruments and commercial paper that are within
the two highest rating categories by a Rating Agency.
Each of the Conestoga Equity Fund, Intermediate Income Fund, Balanced Fund
and International Equity Fund may lend its portfolio securities. There is no
limit on the amount of securities which these Funds may lend, except that the
Conestoga International Equity Fund may only lend portfolio securities up to
one-third the value of its total assets. Such loans involve risks of delay in
receiving additional collateral or in recovering the securities loaned or even
loss of rights in the collateral, should the borrower of the securities fail
financially. Any portfolio securities purchased with cash collateral would also
be subject to possible depreciation. The Existing CoreFunds Portfolios (with the
exception of CoreFunds International Growth Fund) have a fundamental investment
limitation prohibiting loans.
Conestoga Cash Management Fund, Intermediate Income Fund and Balanced Fund
and CoreFunds Cash Reserve and Intermediate Bond Fund may invest in asset-backed
securities. These securities may be backed by either credit card receivables or
motor vehicle installment purchase obligations. Asset-backed securities entail
certain risks, including the risk that credit card receivables are generally
unsecured, and the debtors are entitled to the protection of a number of state
and federal consumer credit laws, many of which give such debtors the right to
set off certain amounts owned on the credit cards, thereby reducing the balance
due. Most issuers of asset-backed securities backed by motor vehicle installment
purchase obligations permit the servicer of such receivable to retain possession
of the underlying obligations. If the servicer sells these obligations to
another party, there is a risk that the purchaser would acquire an interest
superior to that of the holders of the related asset-backed securities. Further,
if a vehicle is registered in one state and is then re-registered because the
owner and obligor move to another state, such re-registration could defeat the
original security interest in the vehicle in certain cases. In addition, because
of the large number of vehicles involved in a typical issuance and technical
requirements under state laws, the trustee for the holders of asset-backed
securities backed by automobile receivables may not have a proper security
interest in all of the obligations backing such receivables. Therefore, there is
the possibility that recoveries on repossessed
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collateral may not, in some cases, be available to support payments on these
securities.
Conestoga Intermediate Income Fund and Balanced Fund and CoreFunds
Intermediate Bond Fund and Balanced Fund may invest in mortgage-backed
securities. To the extent that a Fund purchases mortgage-backed securities at a
premium, mortgage foreclosures and prepayments of principal by mortgagors (which
may be made at any time without penalty) may result in some loss of the Fund's
principal investment to the extent of the premium paid. The yield of a Fund that
invests in mortgage-backed securities may be affected by reinvestment of
prepayments at higher or lower rates than the original investment.
Mortgage-backed securities have either fixed or adjustable interest rates. The
rate of return on mortgage-backed securities may be affected by prepayments on
principal on the underlying loans, which generally increase as interest rates
decline. As a result, when interest rates decline, holders of these securities
normally do not benefit from appreciation in market value to the same extent as
holders of other non-callable debt securities. In addition, the value of
mortgage-backed securities will fluctuate in response to market interest rates.
INVESTMENT LIMITATIONS
Neither the Reorganizing Portfolios nor the Existing CoreFunds Portfolios
may change their fundamental investment limitations without the affirmative vote
of the holders of a majority of the outstanding shares (as defined in the 1940
Act) of the particular Reorganizing Portfolio or Existing CoreFunds Portfolio.
The investment limitations of the Reorganizing Portfolios and the corresponding
Existing CoreFunds Portfolios are similar, but not identical.
Each of the Reorganizing Portfolios (except the Conestoga Pennsylvania
Tax-Free Bond Fund) and each of the corresponding Existing CoreFunds Portfolios
(except the CoreFunds Pennsylvania Municipal Bond Fund) is a 'diversified'
investment portfolio and, therefore, has a fundamental policy limiting
investments in securities of any one issuer, other than securities issued by the
U.S. Government, its agencies and instrumentalities and repurchase agreements
collateralized by such securities, to 5% of the value of a fund's total assets,
except that up to 25% of the value of a fund's total assets may be invested
without regard to this 5% limitation. In addition, none of the Reorganizing
Portfolios (except the Conestoga Cash Management Fund, Tax-Free Fund, U.S.
Treasury Securities Fund and Pennsylvania Tax-Free Bond Fund) may acquire more
than 10% of the outstanding voting securities of any one issuer, except that the
Conestoga Equity Fund, Intermediate Income Fund, Balanced Fund and International
Equity Fund may invest up to 25% of their respective assets without regard to
such limitation. Of the CoreFunds, only the Value Equity Fund, Balanced Fund and
International Growth Fund have the same 10% voting securities limitation,
although CoreFunds Cash Reserve, Tax-Free Reserve, Treasury Reserve,
Intermediate Bond Fund and Pennsylvania Municipal Bond Fund have a fundamental
limitation prohibiting the purchase of any common stock or voting securities.
With respect to at least 50% of the total assets of each of the Conestoga
Pennsylvania Tax-Free Bond Fund and CoreFunds Pennsylvania Municipal Bond Fund,
no more than 5% may be invested in securities of a single issuer, and no more
than 25% of each Fund's total assets may be invested in the securities of a
single issuer at the close of each quarter of each fiscal year. For purposes of
this limitation, governmental subdivisions, including states, territories,
possessions of the United States, or their political subdivisions, agencies,
authorities, instrumentalities, or similar entities, will be considered a
separate issuer if their assets and revenues are separate from those of the
government body creating it and the security is backed only by its own assets
and revenues. Industrial revenue bonds backed only by the assets and revenues of
a non-governmental issuer are considered to be issued solely by that user. If,
in the case of an industrial development bond or government-issued security, a
governmental or other entity guarantees the security, such guarantee would be
considered a separate security issued by the guarantor, as well as the other
issuer, subject to limited exclusions allowed by the 1940 Act.
Neither the Reorganizing Portfolios nor the Existing CoreFunds Portfolios
may borrow money directly except that each Fund may borrow money from banks and
enter into reverse repurchase
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agreements for temporary purposes, and then in amounts not in excess of 10% of
the value of each Fund's total assets. A Reorganizing Portfolio (except the
Conestoga Tax-Free Fund) will not purchase securities while its borrowings,
including reverse repurchase agreements, exceed 5% of the total assets of the
Portfolio. Conestoga Tax-Free Fund and each Existing CoreFunds Portfolio will
not purchase securities while its borrowings, including reverse repurchase
agreements, are outstanding.
The Reorganizing Portfolios and the Existing CoreFunds Portfolios may only
mortgage, pledge or hypothecate their assets to secure permitted indebtedness,
and then may only pledge assets having a market value not exceeding the lesser
of the dollar amounts borrowed or 10% of the value of total assets.
The investment limitations described in the foregoing paragraphs regarding
diversification, borrowing and pledging of assets are fundamental with respect
to both Conestoga and CoreFunds.
Neither the Reorganizing Portfolios nor the Existing CoreFunds Portfolios
may make loans, except that: (i) Conestoga Equity Fund, Intermediate Income
Fund, Balanced Fund and International Equity Fund may lend portfolio securities;
and (ii) the Reorganizing Portfolios may purchase or hold certain debt
instruments and may enter into repurchase agreements; and (iii) each Existing
CoreFunds Portfolio may purchase or hold debt instruments and enter into
repurchase agreements. The foregoing limitations on securities lending are
fundamental limitations for both the Reorganizing Portfolios and the Existing
CoreFunds Portfolios.
The Reorganizing Portfolios and the Existing CoreFunds Portfolios will not
invest 25% or more of the value of their respective total assets in any one
industry, provided that there is no limitation with respect to (i) obligations
issued or guaranteed by the U.S. Government, its agencies or instrumentalities;
(ii) tax-exempt securities issued by governments or political subdivisions of
governments; (iii) wholly-owned finance companies will be considered to be in
the industry of their parents if their activities are primarily related to
financing the activities of their partners; and (iv) utilities will be divided
according to their services. The foregoing investment limitations of each of the
Reorganizing Portfolios and the Existing CoreFunds Portfolios with respect to
industry concentration of investments is a fundamental investment limitation.
Each of the Reorganizing Portfolios must limit its investments in illiquid
securities to 15% of its net assets, except that the Conestoga Cash Management
Fund, Tax-Free Fund and U.S. Treasury Securities are subject to a 10% limitation
and the Conestoga Equity Fund and Intermediate Income Fund will not invest in
repurchase agreements maturing in excess of seven days if such investment,
together with other investments of such Fund that are not readily marketable,
exceeds 10% of such Fund's total assets. By contrast, each of the Existing
CoreFunds Portfolios must limit its investments in illiquid securities to 10% of
its net assets (except for the CoreFunds Balanced and Pennsylvania Municipal
Bond Funds). With respect to the Reorganizing Portfolios, Rule 144A securities
will not be considered illiquid if the Funds' investment adviser determines that
an adequate trading market exists with respect to such securities. The foregoing
limitations on investments in illiquid securities are fundamental as to the
Existing CoreFunds Portfolios but are not fundamental as to the Reorganizing
Portfolios.
Neither the Reorganizing Portfolios nor the Existing CoreFunds Portfolios
may purchase or sell real estate, except that the Funds may purchase securities
of issuers which deal in real estate and may purchase securities which are
secured by interests in real estate.
None of the Reorganizing Portfolios (except Conestoga Cash Management Fund,
Tax-Free Fund and U.S. Treasury Securities Fund) and the Existing CoreFunds
Portfolios may acquire any other investment company or investment company
security except in connection with a merger, consolidation, reorganization or
acquisition of assets or where otherwise permitted by the 1940 Act. The
Conestoga Cash Management Fund, Tax-Free Fund and U.S. Treasury Securities Fund
are not permitted to acquire investment company securities, except in connection
with a merger, consolidation, reorganization or acquisition of assets.
Neither the Reorganizing Portfolios nor the Existing CoreFunds Portfolios
may act as an
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underwriter of securities within the meaning of the Securities Act of 1933
except to the extent that the purchase of obligations directly from the issuer
thereof, or the disposition of securities, in accordance with a Fund's
investment objective, policies and limitations may be deemed to be underwriting.
Neither the Reorganizing Portfolios nor the Existing CoreFunds Portfolios
may purchase securities of companies for the purpose of exercising control.
Neither the Reorganizing Portfolios nor the Existing CoreFunds Portfolios
may purchase securities on margin, make short sales of securities or maintain a
short position, except that each Reorganizing Portfolio may obtain such
short-term credits as may be necessary for the clearance of purchases and sales
of portfolio securities.
None of the Existing CoreFunds Portfolios may invest in puts, calls,
straddles, spreads, or any combination thereof, except that (i) CoreFunds
International Growth Fund may enter into forward currency contracts, purchase
futures contracts and options thereon, and purchase, sell and write options on
securities (including puts and calls) to a limited extent; and (ii) CoreFunds
Pennsylvania Municipal Bond Fund may engage in put transactions.
Neither the Reorganizing Portfolios nor the Existing CoreFunds Portfolios
may purchase or sell commodity contracts, or invest in oil, gas or mineral
exploration or development programs or leases.
The following fundamental investment limitations of the Existing CoreFunds
Portfolios have no counterpart in the Reorganizing Portfolios:
Each Existing CoreFunds Portfolio is prohibited from investing more than
10% of its total assets in the securities of any company not in operation
continuously for at least three years (including any predecessor company).
Each Existing CoreFunds Portfolio is prohibited from purchasing or
retaining the securities of any issuer if officers and directors of CoreFunds,
or its advisor, owning beneficially more than one-half of 1% of the securities
of such issuer together own more than 5% of the securities of such issuer.
The Existing CoreFunds Portfolios may not invest in securities with legal
or contractual restrictions.
See 'Additional Investment Restrictions' in CoreFunds' Statement of
Additional Information which is incorporated by reference herein for additional
investment limitations of the Existing CoreFunds Portfolios.
PURCHASE AND REDEMPTION INFORMATION, EXCHANGE PRIVILEGES, DISTRIBUTION AND
PRICING. The purchase, redemption, exchange privileges and distribution policies
of the Conestoga Portfolios and the CoreFunds Portfolios are discussed above
under 'Summary -- Overviews of the Conestoga Portfolios and CoreFunds
Portfolios' and below in Appendix III to this Combined Proxy
Statement/Prospectus.
OTHER INFORMATION. Conestoga and CoreFunds are registered as open-end
management investment companies under the 1940 Act. Currently, Conestoga offers
eleven investment portfolios and CoreFunds offers seventeen investment
portfolios.
Conestoga is organized as a Massachusetts business trust and is subject to
the provisions of its Declaration of Trust and Code of Regulations. CoreFunds is
organized as a Maryland corporation and subject to the provisions of its
Articles of Incorporation and By-laws. Shares of both Conestoga and CoreFunds:
(i) are entitled to one vote for each full share held and a proportionate
fractional vote for each fractional share held; (ii) will vote in the aggregate
and not by class except as otherwise expressly required by law or when class
voting is permitted by the respective Board of Trustees or Directors; and (iii)
are entitled to participate equally in the dividends and distributions that are
declared with respect to a particular investment portfolio and in the net
distributable assets of such portfolio on liquidation. Shares of both the
Conestoga Portfolios and the CoreFunds Portfolios have a par value of $.001. In
addition, shares of the Conestoga Portfolios and CoreFunds Portfolios have no
preemptive rights and only such conversion and exchange rights as the respective
Boards of Trustees or Directors may grant in their discretion. When issued for
payment as described in their prospectuses, Conestoga Portfolio
shares and CoreFunds Portfolio shares are fully paid and non-assessable by such
entities except as required under Massachusetts law with respect to Conestoga.
CoreFunds is not required under Maryland General Corporation Law to hold annual
shareholder meetings and intends to do so only if required by the 1940 Act.
Shareholders have the right to remove Directors. To the extent required by law,
CoreFunds will assist in shareholder communications in such matters.
The foregoing is only a summary. Shareholders may obtain copies of the
Declaration of Trust and By-laws of Conestoga and the Articles of Incorporation
and By-laws of CoreFunds upon written request at the addresses shown on the
cover page of this Combined Proxy Statement/Prospectus.
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INTERIM INVESTMENT ADVISORY AND SUB-ADVISORY AGREEMENTS
As stated above, because the Holding Company Merger will result in a change
in control of MIC, Conestoga's existing investment advisory and sub-advisory
agreements will, by their terms, automatically terminate on the date the Holding
Company Merger occurs. The Reorganization Agreement provides, that Conestoga
will enter into an interim investment advisory agreement with MIC (or its
successor), and that MIC will enter into an interim sub-advisory agreement with
Marvin and Palmer for the Conestoga International Equity Fund (together, the
'Interim Agreements'). The Interim Agreements will be in effect for the
Reorganizing Portfolios between the Holding Company Merger and the consummation
of the Reorganizing Portfolios Transaction. The interim advisory agreement will
be in effect for the Continuing Portfolios between the Holding Company Merger
and the consummation of the Continuing Portfolios Transaction. It is
contemplated that the firms that currently provide investment advisory and
sub-advisory services for the Conestoga Portfolios will continue to provide
services under the Interim Agreements.
The investment advisory and sub-advisory fee rates stated in the Interim
Agreements will be the same, and the other provisions of the Interim Agreements
will be substantially the same, as those in the current investment and
sub-advisory agreements for the Conestoga Portfolios.
Copies of the proposed Interim Agreements are attached as Appendix IV. In
the interim advisory agreement, MIC agrees, subject to the supervision of the
Conestoga Board of Trustees, to provide a continuous investment program for the
Conestoga Portfolios and to determine from time to time what securities and
other investments will be purchased, retained or sold in accordance with that
Portfolio's investment objectives, policies and restrictions. MIC's
responsibilities include, but are not limited to, placing purchase and sale
orders for portfolio transactions; maintaining books and records with respect to
a Portfolio's securities transactions; and furnishing periodic and special
reports to the Conestoga Board of Trustees as requested. The Interim Agreements
further provide that a Portfolio's investment adviser and sub-adviser will pay
all expenses incurred by it in connection with its advisory activities, other
than the cost of securities (including brokerage commissions, if any) purchased
for a Portfolio.
With respect to the Conestoga International Equity Fund, some of the
investment adviser's responsibilities under the Interim Agreement will be
performed by the sub-adviser. In particular, Marvin and Palmer will, subject to
supervision by MIC (or its successor) and the Conestoga Board of Trustees,
manage the investment operations of the Conestoga International Equity Fund
during the Interim Period and determine the composition of the Fund, including
the purchase, retention and disposition of securities in accordance with the
Fund's investment objective, policies and restrictions. In addition, Marvin and
Palmer will prepare, subject to MIC's approval, lists of foreign countries for
investment by the Fund.
Under the Interim Agreements, in placing orders with brokers and dealers,
the investment adviser and sub-adviser are to attempt to obtain prompt execution
of orders at the most favorable price. Consistent with this obligation, when the
execution and price offered by two or more brokers or dealers are comparable,
the investment adviser or sub-adviser may, in its discretion, purchase and sell
portfolio securities to and from brokers and dealers that provide research
advice and other services. These brokerage and research services might consist
of reports and statistics on specific companies of industries, general summaries
of groups of stocks or bonds and their comparative earnings and yields, or broad
overviews of the securities markets and the economy.
Supplementary research information so received is in addition to, and not
in lieu of, services required to be performed by the investment adviser or
sub-adviser, and does not reduce the advisory fees payable by the Conestoga
Portfolios. It is possible that certain of the supplementary research or other
services received will primarily benefit one or more other investment companies
or other accounts for which the investment adviser or sub-adviser exercises
investment discretion. Conversely, the Conestoga Portfolios may be the primary
beneficiary of the research or services received as a result of portfolio
transactions effected for such other account or investment company.
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Investment decisions for the Conestoga Portfolios and for other investment
accounts managed by the investment adviser and sub-adviser under the Interim
Agreements will be made independently of each other in light of differing
conditions. However, the same investment decision may be made for two or more of
such accounts. In such cases, simultaneous transactions are inevitable.
Purchases or sales are then allocated in a manner believed by the investment
adviser or sub-adviser to be equitable to each such account. While in some cases
this practice could have a detrimental effect on the price or value of the
security as far as a Conestoga Portfolio is concerned, in other cases it may be
beneficial to the portfolio. To the extent permitted by law, the investment
adviser or sub-adviser may aggregate the securities to be sold or purchased for
the Conestoga Portfolios with those to be sold or purchased for other investment
companies or accounts in executing transactions. Portfolio securities will not
be purchased from or sold to the investment adviser, sub-adviser, or any
affiliated person, except as permitted under the 1940 Act.
If in any fiscal year the aggregate expenses of any Conestoga Portfolio
exceeds the expense limitation of any state having jurisdiction over Conestoga,
the Interim Agreements provide that the Portfolio's investment adviser will
reimburse the Portfolio for a portion of such excess expenses equal to such
excess times the ratio of the fees otherwise payable by the Portfolio to the
investment adviser to the aggregate fees otherwise payable by the Portfolio to
the investment adviser and to the Portfolio's administrator under its
administration agreement. The obligation of the investment adviser to reimburse
a Portfolio is limited in any fiscal year to the amount of its fee for such
fiscal year, provided that an investment adviser will reimburse a Portfolio for
such proportion of such excess expenses regardless of the amount of fees paid to
it during such fiscal year to the extent that the securities regulations of any
state having jurisdiction over Conestoga so require. As of the date hereof, the
most restrictive expense limitation applicable to a Conestoga Portfolio limits
its aggregate annual expenses (as defined by applicable regulations) to 2 1/2%
of the first $30 million of its average net assets, 2% of the next $70 million
of its average net assets, and 1 1/2% of its remaining net assets.
The investment adviser or sub-adviser will not be liable for any error of
judgment or mistake of law or for any loss suffered by a Conestoga Portfolio in
connection with the performance of its agreements, except a loss arising from a
breach of fiduciary duty with respect to the receipt of compensation for
services or a loss resulting from wilful misfeasance, bad faith or gross
negligence on the part of the investment adviser or sub-adviser in the
performance of its duties or from reckless disregard by it of its obligations
and duties under the agreements.
Should the Reorganization not occur, the Interim Agreements may be renewed
for successive annual periods with respect to a Conestoga Portfolio if
specifically approved at least annually (a) by the vote of a majority of those
members of the Conestoga Board of Trustees who are not parties to the agreements
or interested persons of any party to the agreements, cast in person at a
meeting called for the purpose of voting on such approval, and (b) by the vote
of a majority of the Conestoga Board of Trustees or by the vote of a majority of
all votes attributable to the outstanding shares of the Portfolio.
The Interim Agreements will terminate upon their assignment (as defined in
the 1940 Act). In addition, the Interim Agreements may be terminated with
respect to any Conestoga Portfolio by the Conestoga Board of Trustees, by vote
of a majority of the outstanding shares of that Portfolio, by the investment
adviser or, in the case of an Interim Sub-Advisory Agreement, by either the
investment adviser or sub-adviser upon notice as stated in the particular
agreement.
The table at page 3 shows (i) the current contractual fee rates for the
Conestoga Portfolios, which will be the same throughout the Interim Period until
the time of the transactions, and (ii) the advisory/sub-advisory fees actually
paid by the Conestoga Portfolios for their last fiscal year net of waivers. All
fee rates are annualized, and are computed daily and payable monthly based on a
Portfolio's average daily net assets.
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INFORMATION RELATING TO VOTING MATTERS
GENERAL INFORMATION. This Combined Proxy Statement/Prospectus is being
furnished in connection with the solicitation of proxies by Conestoga's Board of
Trustees in connection with the Meeting. It is expected that the solicitation of
proxies will be primarily by mail. Officers and service contractors of Conestoga
may also solicit proxies by telephone, telegraph, facsimile or personal
interview. Any shareholder giving a proxy may revoke it at any time before it is
exercised by submitting to Conestoga a written notice of revocation or a
subsequently executed proxy or by attending the Meeting and voting in person.
Only shareholders of record at the close of business on January 26, 1996
will be entitled to vote at the Meeting. On that date there were outstanding and
entitled to be voted 234,883,522.79 shares of the Conestoga Cash Management
Fund, 47,526,615.37 shares of the Conestoga Tax-Free Fund, 436,965,068.60 shares
of the Conestoga U.S. Treasury Securities Fund, 21,620,456.5884 shares of the
Conestoga Equity Fund, 5,441,676.9690 shares of the Conestoga Special Equity
Fund, 18,131,183.9921 shares of the Conestoga Bond Fund, 11,856,351.8320 shares
of the Conestoga Intermediate Income Fund, 636,811.79 shares of the Conestoga
Pennsylvania Tax-Free Bond Fund, 3,626,636.716 shares of the Conestoga Balanced
Fund, 3,431,978.3660 shares of the Conestoga Short-Term Income Fund and
1,377,454.999 shares of the Conestoga International Equity Fund. Each share or
fraction thereof is entitled to one vote or fraction thereof, and all shares
will vote separately by Fund.
Conestoga and CoreFunds have been advised by MIC that the shares of each
Conestoga Portfolio over which Meridian Bancorp, Inc. or its affiliates have
voting power will, except as to accounts established for Meridian's employee
benefit plan, be voted in accordance with instructions received from beneficial
owners or fiduciaries of such accounts who are not related to Meridian Bancorp,
Inc. or its affiliates. As to Meridian's own employee benefit plan, and as to
accounts for which no instructions are received from beneficial owners or
fiduciaries, Meridian will cast such votes in accordance with the recommendation
of a fiduciary that is independent of Meridian.
If the accompanying proxy is executed and returned in time for the Meeting,
the shares covered thereby will be voted in accordance with the proxy on all
matters that may properly come before the Meeting or any adjournment thereof.
For information on adjournment of the meeting, see 'Quorum' below.
SHAREHOLDER AND BOARD APPROVALS. The Reorganization Agreement (and the
transactions contemplated thereby including the implementation of the interim
investment advisory and sub-advisory agreements), is being submitted for
approval at the Meeting by the holders of a majority of the outstanding shares
of the Conestoga Cash Management Fund, Tax-Free Fund, U.S. Treasury Securities
Fund, Equity Fund, Special Equity Fund, Bond Fund, Intermediate Income Fund,
Pennsylvania Tax-Free Bond Fund, Balanced Fund, Short-Term Income Fund and
International Equity Fund in accordance with the provisions of Conestoga's
Declaration of Trust and the requirements of the 1940 Act. The term 'majority of
the outstanding shares' of a Conestoga Portfolio as used herein means the lesser
of (a) 67% of the shares of the particular Conestoga Portfolio present at the
Meeting if the holders of more than 50% of the outstanding shares of the
Conestoga Portfolio are present in person or by proxy, or (b) more than 50% of
the outstanding shares of such Conestoga Portfolio.
In tallying shareholder votes, abstentions and broker non-votes (i.e.,
proxies sent in by brokers and other nominees that cannot be voted on a proposal
because instructions have not been received from the beneficial owners) will be
counted for purposes of determining whether or not a quorum is present for
purposes of convening the meeting. On the Reorganization proposal abstentions
and broker non-votes will be considered to be a vote against the Reorganization
proposal.
The approval by the shareholders of the corresponding Existing CoreFunds
Portfolios of the Reorganization is not being solicited because their approval
or consent is not necessary for the Reorganization to be consummated.
47
<PAGE>
At January 26, 1996, Meridian Bancorp, Inc. and its affiliates held of
record substantially all of the outstanding shares of each of the Conestoga Cash
Management Fund, Tax-Free Fund, U.S. Treasury Securities Fund, Equity Fund,
Special Equity Fund, Bond Fund, Intermediate Income Fund, Pennsylvania Tax-Free
Bond Fund, Balanced Fund, Short-Term Income Fund and International Equity Fund
on behalf of their customer accounts.
At January 26, 1996, the name, address and percentage of ownership of the
persons who owned of record 5% or more of any class of shares of the
Reorganizing Portfolios, and the percentage of the respective share classes of
the corresponding Existing CoreFunds Portfolios that would be owned by those
persons upon the consummation of the Reorganizing Portfolios Transaction based
upon their holdings on January 26, 1996, are as follows:
<TABLE>
<CAPTION>
PERCENTAGE
PERCENTAGE OF CLASS OF
OF REORGANIZING EXISTING
PERCENTAGE PORTFOLIO'S COREFUNDS
CLASS OF OF CLASS SHARES PORTFOLIO
REORGANIZING SHARES OWNED ON OWNED ON OWNED ON
PORTFOLIO NAME AND ADDRESS OWNED RECORD DATE RECORD DATE CONSUMMATION
- -------------------- ------------------------------------- ---------- ------------- --------------- ---------------
<S> <C> <C> <C> <C> <C>
Cash Management Fund MAM & Co. Institutional 99.96% 98.96% 28.13%
c/o Mark Medura MHO 330 Shares
P.O. Box 16006
Mail Code BB0425
Reading, PA 19612-6006
Jean M. McHazel Retail 5.16% 0.05% 0.55%
2283 Highland Circle Shares
Harrisburg, PA 17110-9243
Tax-Free Fund MAM & Co. Institutional 100% 97.01% 42.02%
c/o Mark Medura MHO 330 Shares
P.O. Box 16006
Mail Code BB0425
Reading, PA 19612-6006
Marietta E. Williams Retail 28.16% 0.84% 11.87%
RD2 Box 141 Shares
Elverson, PA 19520-9435
Elizabeth R. Cabine POA Retail 14.08% 0.42% 5.94%
Eleanor P. Jester Shares
2115 Concord Pike
Wilmington, DE 19803-2906
Gregory J. Blazic Retail 13.76% 0.41% 5.80%
Lellus L. Blazic JT Ten Shares
P.O. Box 603
Country Club Road
Valley Forge, PA 19482-0603
U.S. Treasury MAM & Co. Institutional 66.42% 66.31% 30.63%
Securities Fund c/o Mark Medura MHO 330 Shares
P.O. Box 16006
Mail Code BB0425
Reading, PA 19612-6006
The Bank of New York Institutional 33.58% 33.52% 15.48%
One Wall Street Shares
5th Floor/STIF
New York, NY 10286-0001
Plymouth Meeting Friends School Retail 36.23% 0.06% 1.19%
Germantown & Butler Pike Shares
Plymouth Meeting, PA 19462
Meridian Trust Company Cust. Retail 9.85% 0.02% 0.32%
for the IRA Rollover of Shares
John G. Fish
1009 Homeland Drive
Lancaster, PA 17601-5143
</TABLE>
48
<PAGE>
<TABLE>
<CAPTION>
PERCENTAGE
PERCENTAGE OF CLASS OF
OF REORGANIZING EXISTING
PERCENTAGE PORTFOLIO'S COREFUNDS
CLASS OF OF CLASS SHARES PORTFOLIO
REORGANIZING SHARES OWNED ON OWNED ON OWNED ON
PORTFOLIO NAME AND ADDRESS OWNED RECORD DATE RECORD DATE CONSUMMATION
- -------------------- ------------------------------------- ---------- ------------- --------------- ---------------
<S> <C> <C> <C> <C> <C>
Karen J. Urban Retail 5.38% 0.01% 0.18%
57 East Ridge Street Shares
Coaldale, PA 18218-1218
Equity Fund MAM & Co. Institutional 48.62% 47.61% 44.57%
c/o Kim Kutzer Shares
P.O. Box 16004
Mail Code BB0405
Reading, PA 19612-6004
MAM & Co. Institutional 47.55% 46.56% 43.59%
c/o Kim Kutzer Shares
P.O. Box 16004
Mail Code BB0405
Reading, PA 19612-6004
National Financial Services Retail 34.88% 0.71% 25.39%
Corporation for the Benefit Shares
of our Customers
One World Financial Center
200 Liberty Street
4th Floor
New York, NY 10281-1003
Intermediate Income MAM & Co. Institutional 47.08% 46.61% 32.65%
Fund c/o Kim Kutzer Shares
P.O. Box 16004
Mail Code BB0405
Reading, PA 19612-6004
MAM & Co. Institutional 43.73% 43.30% 30.33%
c/o Kim Kutzer Shares
P.O. Box 16004
Mail Code BB0405
Reading, PA 19612-6004
National Financial Services Retail 29.48% 0.28% 11.15%
Corporation for the Benefit Shares
of our Customers
One World Financial Center
200 Liberty Street
4th Floor
New York, NY 10281-1003
Meridian Trust Company Retail 8.97% 0.09% 3.39%
Cust for the IRA Rollover of Shares
John G. Fish
1009 Homeland Drive
Lancaster, PA 17601-5143
Elissa A. Graner-Hoffman Retail 5.90% 0.06% 2.23%
219 South Len Street Shares
Allentown, PA 18104-6546
Pennsylvania MAM & Co. Institutional 58.47% 52.31% 39.36%
Tax-Free Bond Fund c/o Kim Kutzer Shares
P.O. Box 16004
Mail Code BB0405
Reading, PA 19612-6004
MAM & Co. Institutional 41.53% 37.15% 27.95%
c/o Kim Kutzer Shares
P.O. Box 16004
Mail Code BB0405
Reading, PA 19612-6004
</TABLE>
49
<PAGE>
<TABLE>
<CAPTION>
PERCENTAGE
PERCENTAGE OF CLASS OF
OF REORGANIZING EXISTING
PERCENTAGE PORTFOLIO'S COREFUNDS
CLASS OF OF CLASS SHARES PORTFOLIO
REORGANIZING SHARES OWNED ON OWNED ON OWNED ON
PORTFOLIO NAME AND ADDRESS OWNED RECORD DATE RECORD DATE CONSUMMATION
- -------------------- ------------------------------------- ---------- ------------- --------------- ---------------
<S> <C> <C> <C> <C> <C>
National Financial Services Retail 25.20% 2.66% 19.37%
Corporation for the Benefit Shares
of our Customers
One World Financial Center
200 Liberty Street
4th Floor
New York, NY 10281-1003
George W. Grosz Retail 6.81% 0.72% 5.23%
Dorothy M. Grosz JT WROS Shares
533 S. Waterloo Road
Devon, PA 19333-1729
Lee B. Kirts Retail 6.34% 0.67% 4.87%
Celine Kirts JT WROS Shares
451 Knightsbridge Lane
Hatfield, PA 19440-3603
Wayne R. Huey Retail 5.97% 0.63% 4.59%
73 Crestline Road Shares
Strafford, PA 19087-2611
Balanced Fund State Street Bank & Trust Company Retail 52.50% 0.11% 1.57%
Cust for the Rollover IRA of Shares
Richard Detwiler
22 S. Kenhorst Blvd.
Shillington, PA 19607-2026
State Street Bank & Trust Company Retail 24.14% 0.05% 0.72%
Cust for the Rollover IRA of Shares
Robert J. Merenda
2 Cedar Hill Court
Voorhees, NJ 08043-4712
State Street Bank & Trust Company Retail 12.13% 0.03% 0.36%
Cust for the Rollover IRA of Shares
Roberta M. Merenda
2 Cedar Hill Court
Voorhees, NJ 08043-4712
Meridian Asset Management Company Retail 8.42% 0.02% 0.25%
Cust for the Rollover IRA of Shares
Darlene H. Lathrop
2403 Smith Lane
Wilmington, DE 19810-2334
International Equity Albert E. Murphy Retail 33.05% 0.07% 0.47%
Fund Gertrude A. Murphy JT TEN Shares
580 Patten Avenue #78
Longbranch, NJ 07740-7881
National Financial Services Retail 32.81% 0.06% 0.46%
Corporation for the Benefit Shares
of our Customers
One World Financial Center
200 Liberty Street
4th Floor
New York, NY 10281-1003
Meridian Trust Company Cust Retail 7.06% 0.01% 0.10%
Cust for the IRA of Shares
Christopher D. Hogan
711 Pass Road
Gulfport, MS 39501-6444
Dawn T. Hogan Retail 6.92% 0.01% 0.10%
1750 Peachtree Lane Shares
Norristown, PA 19403-3330
</TABLE>
50
<PAGE>
<TABLE>
<CAPTION>
PERCENTAGE
PERCENTAGE OF CLASS OF
OF REORGANIZING EXISTING
PERCENTAGE PORTFOLIO'S COREFUNDS
CLASS OF OF CLASS SHARES PORTFOLIO
REORGANIZING SHARES OWNED ON OWNED ON OWNED ON
PORTFOLIO NAME AND ADDRESS OWNED RECORD DATE RECORD DATE CONSUMMATION
- -------------------- ------------------------------------- ---------- ------------- --------------- ---------------
<S> <C> <C> <C> <C> <C>
Meridian Trust Company Cust Retail 5.38% 0.01% 0.08%
Cust for the IRA Rollover of Shares
Bridget A. Vargo
7373 Ridge Avenue
Apt. 422
Philadelphia, PA 19128-3236
Colette B. Price Retail 5.09% 0.01% 0.07%
D. Kim Price JT TEN Shares
2408 Welsh Road
Mohnton, PA 19540-8814
</TABLE>
The name, address and percentage of ownership of each person who owns of
record 5% or more of any class of shares of the Continuing Portfolios is listed
below. Prior to the Continuing Portfolios Transaction the New CoreFunds
Portfolios will have only nominal assets. Accordingly, the persons who own of
record 5% or more of any class of shares of the Continuing Portfolios will not
materially change upon consummation of the Continuing Portfolios Transaction.
<TABLE>
<CAPTION>
PERCENTAGE
PERCENTAGE OF CLASS OF
OF CONTINUING NEW
PERCENTAGE PORTFOLIO COREFUNDS
CLASS OF OF CLASS SHARES PORTFOLIO
CONTINUING SHARES OWNED ON OWNED ON OWNED ON
PORTFOLIO NAME AND ADDRESS OWNED RECORD DATE RECORD DATE CONSUMMATION
- -------------------- ------------------------------------- ---------- ------------- --------------- ------------
<S> <C> <C> <C> <C> <C>
Special Equity Fund MAM & Co. Institutional 55.19% 54.31% 55.19%
c/o Kim Kutzer Shares
P.O. Box 16004
Mail Code BB0405
Reading, PA 19612-6004
MAM & Co. Institutional 43.35% 42.66% 43.35%
c/o Kim Kutzer Shares
P.O. Box 16004
Mail Code BB0405
Reading, PA 19612-6004
National Financial Services Retail 28.10% 0.43% 28.10%
Corporation for the Benefit Shares
of our Customers
One World Financial Center
200 Liberty Street
4th Floor
New York, NY 10281-1003
State Street Bank & Trust Co. Retail 6.81% 0.10% 6.81%
Cust for the Rollover IRA of Shares
Bernard J. Daney
121 Ponds Lane
Wilmington, DE 19807-2129
Bond Fund MAM & Co. Institutional 52.38% 51.92% 52.38%
c/o Kim Kutzer Shares
P.O. Box 16004
Mail Code BB0405
Reading, PA 19612-6004
MAM & Co. Institutional 41.96% 41.60% 41.96%
c/o Kim Kutzer Shares
P.O. Box 16004
Mail Code BB0405
Reading, PA 19612-6004
</TABLE>
51
<PAGE>
<TABLE>
<CAPTION>
PERCENTAGE
PERCENTAGE OF CLASS OF
OF CONTINUING NEW
PERCENTAGE PORTFOLIO COREFUNDS
CLASS OF OF CLASS SHARES PORTFOLIO
CONTINUING SHARES OWNED ON OWNED ON OWNED ON
PORTFOLIO NAME AND ADDRESS OWNED RECORD DATE RECORD DATE CONSUMMATION
- -------------------- ------------------------------------- ---------- ------------- --------------- ---------------
<S> <C> <C> <C> <C> <C>
MAM & Co. Institutional 5.41% 5.36% 5.41%
c/o Kim Kutzer Shares
P.O. Box 16004
Mail Code BB0405
Reading, PA 19612-6004
National Financial Services Retail 32.23% 2.31% 32.23%
Corporation for the Benefit Shares
of our Customers
One World Financial Center
200 Liberty Street
4th Floor
New York, NY 10281-1003
Meridian Trust Company Retail 7.47% 0.05% 7.47%
Cust for the IRA Rollover of Shares
Shiras E. Holmes
8761 W. Barkhurst Drive
Pittsburgh, PA 15237-4183
Short-Term Income Jenny E. Yuninger Retail 96.80% 0.03% 96.80%
Fund 12 Ocola Drive Shares
Paradise, PA 17562
MAM & Co. Institutional 61.61% 61.59% 61.61%
c/o Kim Kutzer Shares
P.O. Box 16004
Mail Code BB0405
Reading, PA 19612-6004
MAM & Co. Institutional 38.34% 38.32% 38.34%
c/o Kim Kutzer Shares
P.O. Box 16004
Mail Code BB0405
Reading, PA 19612-6004
</TABLE>
At January 26, 1996, the trustees and officers of Conestoga, as a group,
owned less than 1% of the outstanding shares of each of the Conestoga
Portfolios. At January 26, 1996, the directors and officers of CoreFunds owned
less than 1% of the outstanding shares of each of the CoreFunds Portfolios.
At January 26, 1996, the name, address and percentage of ownership of the
persons who owned of record 5% or more of any class of shares of the Existing
CoreFunds Portfolios, and the percentage of the respective share classes that
would be owned by those persons upon consummation of the Reorganizing Portfolios
Transaction based upon their holdings on January 26, 1996, are as follows:
<TABLE>
<CAPTION>
PERCENTAGE
OF COREFUNDS
PERCENTAGE PORTFOLIO PERCENTAGE
CLASS OF OF CLASS SHARES OF CLASS
COREFUNDS SHARES OWNED ON OWNED ON OWNED ON
PORTFOLIO NAME AND ADDRESS OWNED RECORD DATE RECORD DATE CONSUMMATION
- -------------------- ------------------------------------- ---------- ------------- --------------- ---------------
<S> <C> <C> <C> <C> <C>
Cash Reserve Fund Patterson & Co. Institutional 89.88% 87.02% 64.59%
Attn: Jim Quinlan Shares
P.O. Box 7618 FC9-1-17
Philadelphia, PA 19101-7618
Gloria Levin Individual 5.13% 0.16% 4.57%
2401 Pennsylvania Avenue Shares
Apt. 21B23
Philadelphia, PA 19130-3008
Tax-Free Reserve Patterson & Co. Institutional 88.66% 86.03% 51.40%
Fund Attn: Jim Quinlan Shares
P.O. Box 7618 FC9-1-17
Philadelphia, PA 19101-7618
</TABLE>
52
<PAGE>
<TABLE>
<CAPTION>
PERCENTAGE
OF COREFUNDS
PERCENTAGE PORTFOLIO PERCENTAGE
CLASS OF OF CLASS SHARES OF CLASS
COREFUNDS SHARES OWNED ON OWNED ON OWNED ON
PORTFOLIO NAME AND ADDRESS OWNED RECORD DATE RECORD DATE CONSUMMATION
- -------------------- ------------------------------------- ---------- ------------- --------------- ---------------
<S> <C> <C> <C> <C> <C>
Leslie Edelman Individual 41.29% 1.23% 23.88%
288 Aquetog Road Shares
New Hope, PA 18938-1119
Harold D. McKemy Individual 7.08% 0.21% 4.09%
3 Bobolink Drive Shares
Wyomissing, PA 19610
William H. Simon, M.D. Individual 8.32% 0.25% 4.81%
255 S. 17th Street, 11th Floor Shares
Philadelphia, PA 19103
Treasury Reserve SRE Real Estate Fund Institutional 6.09% 5.83% 3.27%
Fund Attn: Audrey Hirshberg Shares
666 Fifth Avenue
New York, NY 10103
Patterson & Co. Institutional 59.10% 56.62% 31.72%
Attn: Jim Quinlan Shares
P.O. Box 7618 FC9-1-17
Philadelphia, PA 19101-7618
Mac & Co. Institutional 5.77% 5.53% 3.10%
Mellon Bank N.A. Shares
Mutual Funds Dept.
P.O. Box 320
Pittsburgh, PA 15230-0320
Hare & Co. Institutional 11.44% 10.96% 6.14%
Bank of New York Shares
Attn: STIF/Master Note
One Wall Street, 5th Floor
New York, NY 10286
Patterson & Co. Individual 46.59% 1.95% 45.06%
Attn: Jim Quinlan Shares
P.O. Box 7618 FC9-1-17
Philadelphia, PA 19101-7618
Collagenex, Inc. Individual 23.59% 0.99% 22.82%
301 S. State Street Shares
Newtown, PA 18940
Value Equity Fund Patterson & Co. Institutional 66.15% 60.92% 5.51%
PNB Personal Trust Accounting Shares
P.O. Box 7829
Philadelphia, PA 19101-7829
Patterson & Co. Institutional 24.70% 22.75% 2.06%
PNB Personal Trust Accounting Shares
P.O. Box 7829
Philadelphia, PA 19101-7829
Joseph C. & Hilde Krallinger Individual 13.61% 1.08% 3.70%
TTEES Shares
Krallinger Family Trust
UAD 11/17/93
48872 Mariposa Drive
Palm Desert, CA 92260-6810
Intermediate Bond Patterson & Co. Institutional 84.89% 81.86% 26.02%
Fund PNB Personal Trust Accounting Shares
P.O. Box 7829
Philadelphia, PA 19101-7829
Patterson & Co. Institutional 6.23% 6.01% 1.91%
PNB Personal Trust Accounting Shares
P.O. Box 7829
Philadelphia, PA 19101-7829
</TABLE>
53
<PAGE>
<TABLE>
<CAPTION>
PERCENTAGE
OF COREFUNDS
PERCENTAGE PORTFOLIO PERCENTAGE
CLASS OF OF CLASS SHARES OF CLASS
COREFUNDS SHARES OWNED ON OWNED ON OWNED ON
PORTFOLIO NAME AND ADDRESS OWNED RECORD DATE RECORD DATE CONSUMMATION
- -------------------- ------------------------------------- ---------- ------------- --------------- ---------------
<S> <C> <C> <C> <C> <C>
CoresStates Bank N.A. C/F IRA Individual 5.01% 0.18% 3.11%
R/O of Shares
Robert T. Mathie
60 Roselyn Drive
York, PA 17402-3232
CoreStates Bank N.A. C/F IRA of Individual 5.06% 0.18% 3.14%
Donald A. Fleck Shares
32 Summit Circle
Churchville, PA 18966
Pennsylvania Patterson & Co. Institutional 18.61% 17.34% 6.08%
Municipal Bond Fund PNB Personal Trust Accounting Shares
P.O. Box 7829
Philadelphia, PA 19101-7829
Patterson & Co. Institutional 16.89% 15.74% 5.52%
PNB Personal Trust Accounting Shares
P.O. Box 7829
Philadelphia, PA 19101-7829
Dr. Vernon F. Alibert & Dolores Institutional 64.49% 60.10% 21.08%
V. Alibert, JT WROS Shares
1420 Conchester Highway
Boothwyn, PA 19061
Peter L. Davis & Kathryn K. Individual 8.50% 0.58% 1.97%
Davis JT TEN Shares
509 Manor House Lane
Huntingdon Valley, PA 19006
Harry S. Walmer & Margaret Individual 5.66% 0.39% 1.31%
Walmer JT TEN Shares
590 Stracks Dam Road
Myerstown, PA 17067
Salvatore J. Alesi Sr. & Rose P. Individual 76.74% 5.22% 17.75%
Alesi JT TEN Shares
284 Ellis Road
Havertown, PA 19083
Balanced Fund Patterson & Co. Institutional 90.82% 87.56% 58.64%
PNB Personal Trust Accounting Shares
P.O. Box 7829
Philadelphia, PA 19101-7829
Patterson & Co. Institutional 6.68% 6.44% 4.32%
PNB Personal Trust Accounting Shares
P.O. Box 7829
Philadelphia, PA 19101-7829
CoreStates Bank N.A. C/F IRA of Individual 5.51% 0.20% 5.35%
James E. Brown Shares
1025 Cross Road
Schwenksville, PA 19473
International Growth Patterson & Co. Institutional 7.05% 6.93% 6.25%
Fund PNB Personal Trust Accounting Shares
P.O. Box 7829
Philadelphia, PA 19101-7829
Patterson & Co. Institutional 49.91% 49.04% 44.24%
PNB Personal Trust Accounting Shares
P.O. Box 7829
Philadelphia, PA 19101-7829
Patterson & Co. Institutional 41.46% 40.73% 36.75%
PNB Personal Trust Accounting Shares
P.O. Box 7829
Philadelphia, PA 19101-7829
</TABLE>
54
<PAGE>
<TABLE>
<CAPTION>
PERCENTAGE
OF COREFUNDS
PERCENTAGE PORTFOLIO PERCENTAGE
CLASS OF OF CLASS SHARES OF CLASS
COREFUNDS SHARES OWNED ON OWNED ON OWNED ON
PORTFOLIO NAME AND ADDRESS OWNED RECORD DATE RECORD DATE CONSUMMATION
- -------------------- ------------------------------------- ---------- ------------- --------------- ---------------
<S> <C> <C> <C> <C> <C>
Mark E. Stalnecker & Susan M. Individual 8.70% 0.15% 8.58%
Stalnecker JT TEN Shares
9 Briarcrest Drive
Wallingford, PA 19086
</TABLE>
At January 26, 1996, the name, address and share ownership of the persons
who owned of record 5% or more of CoreFunds' investment portfolios not involved
in the Reorganization were as follows:
<TABLE>
<CAPTION>
PERCENTAGE
NAME AND ADDRESS FUND OF OWNERSHIP
- ----------------------------------------------- ---------------------------------------- -----------------------
<S> <C> <C>
Patterson & Co. Equity Index Fund 35.20%
PNB Personal Trust Accounting
P.O. Box 7829
Philadelphia, PA 19101-7829
Patterson & Co. Equity Index Fund 48.32%
PNB Personal Trust Accounting
P.O. Box 7829
Philadelphia, PA 19101-7829
Patterson & Co. Growth Equity Fund 88.82%
PNB Personal Trust Accounting
P.O. Box 7829
Philadelphia, PA 19101-7829
Patterson & Co. Growth Equity Fund 6.78%
PNB Personal Trust Accounting
P.O. Box 7829
Philadelphia, PA 19101-7829
Patterson & Co. Growth Equity Fund 13.63%
PNB Personal Trust Accounting
P.O. Box 7829
Philadelphia, PA 19101-7829
Patterson & Co. Government Income Fund 53.70%
PNB Personal Trust Accounting
P.O. Box 7829
Philadelphia, PA 19101-7829
Patterson & Co. Government Income Fund 46.24%
PNB Personal Trust Accounting
P.O. Box 7829
Philadelphia, PA 19101-7829
Corestates Bank NA C/F IRA of Government Income Fund 5.36%
Salvatore M. Reyes
500 New Port Avenue
Ocean Gate, NJ 08740
Jean Taxin Government Income Fund 5.99%
5005 Woodbine Avenue
Philadelphia, PA 19131
Corestates Bank NA C/F IRA of Government Income Fund 5.34%
Donald A. Fleck
32 Summit Circle
Churchville, PA 18966
</TABLE>
55
<PAGE>
<TABLE>
<CAPTION>
PERCENTAGE
NAME AND ADDRESS FUND OF OWNERSHIP
- ----------------------------------------------- ---------------------------------------- -----------------------
<S> <C> <C>
Patterson & Co. Intermediate Municipal Bond Fund 80.46%
PNB Personal Trust Accounting
P.O. Box 7829
Philadelphia, PA 19101-7829
Patterson & Co. Intermediate Municipal Bond Fund 10.72%
PNB Personal Trust Accounting
P.O. Box 7829
Philadelphia, PA 19101-7829
Paine Webber FBO Intermediate Municipal Bond Fund 6.59%
M. Tegler A/C# PY01395B3
C/O NSCC New York
55 Water Street
New York, NY 10041
Joseph T. Oprocha & Intermediate Municipal Bond Fund 6.74%
Theresa E. Oprocha JT TEN
107 Snyder Avenue
Philadelphia, PA 19148
Thomas Glenn Intermediate Municipal Bond Fund 5.30%
827 North 63rd Street
Philadelphia, PA 19151
Frank B. Holst & Intermediate Municipal Bond Fund 5.71%
E. Joan Holst JT TEN
2218 Oak Terrace
Lansdale, PA 19446
Salvatore J. Alesi, Sr. & Intermediate Municipal Bond Fund 8.15%
Rose P. Alesi JT TEN
284 Ellis Road
Havertown, PA 19083
Patterson & Co. Global Bond Fund 16.38%
PNB Personal Trust Accounting
P.O. Box 7829
Philadelphia, PA 19101-7829
Patterson & Co. Global Bond Fund 5.46%
PNB Personal Trust Accounting
P.O. Box 7829
Philadelphia, PA 19101-7829
Patterson & Co. Global Bond Fund 78.12%
PNB Personal Trust Accounting
P.O. Box 7829
Philadelphia, PA 19101-7829
James W. Jennings Global Bond Fund 25.07%
2000 One Logan Square
Philadelphia, PA 19103-6993
Corestates Bank NA C/F IRA of Global Bond Fund 14.81%
Allen Luke
17 Bennett Court
East Brunswick, NJ 08816
</TABLE>
56
<PAGE>
<TABLE>
<CAPTION>
PERCENTAGE
NAME AND ADDRESS FUND OF OWNERSHIP
- ----------------------------------------------- ---------------------------------------- -----------------------
<S> <C> <C>
Corestates Bank NA C/F IRA of Global Bond Fund 9.29%
Patrick M. Carlomango
3124 Taft Road
Norristown, PA 19403
Corestates Bank NA C/F IRA of Global Bond Fund 31.77%
A. Gilbert Heebner
2 Etienne Arbordeau
Berwyn Baptist Road
Devon, PA 19333
Patterson & Co. New Jersey Municipal Bond Fund 44.30%
PNB Personal Trust Accounting
P.O. Box 7829
Philadelphia, PA 19101-7829
Patterson & Co. New Jersey Municipal Bond Fund 59.69%
PNB Personal Trust Accounting
P.O. Box 7829
Philadelphia, PA 19101-7829
Deborah L. Brett New Jersey Municipal Bond Fund 17.41%
Randall P. Brett JT TEN
7 Sherman Court
Plainsboro, NJ 08536-2332
Almira E. Brinser & New Jersey Municipal Bond Fund 19.88%
Everett L. Brinser JT TEN
802 Chestnut Avenue
Laurel Springs, NJ 08021
Nathan J. Bershanoff New Jersey Municipal Bond Fund 32.69%
5251 Garden Avenue
Pennsauken, NJ 08109
Nelson Martin New Jersey Municipal Bond Fund 9.58%
59 Hasting Lane
Willingboro, NJ 08046
Mary Manchur & New Jersey Municipal Bond Fund 20.27%
Jean Kent JT TEN
19 Thatchers Road
Frenchtown, NJ 08825
Patterson & Co. Fiduciary Treasury Reserve Fund 100.00%
Attn: Jim Quinlan
P.O. Box 7618 FC9-1-17
Philadelphia, PA 19101-7618
Patterson & Co. Fiduciary Tax-Free Fund 100.00%
Attn: Jim Quinlan
P.O. Box 7618 FC9-1-17
Philadelphia, PA 19101-7618
Patterson & Co. Fiduciary Reserve Fund 100.00%
Attn: Jim Quinlan
P.O. Box 7618 FC9-1-17
Philadelphia, PA 19101-7618
</TABLE>
APPRAISAL RIGHTS. Shareholders are not entitled to any rights of share
appraisal under Conestoga's Declaration of Trust or under the laws of the
Commonwealth of Massachusetts in
57
<PAGE>
connection with the Reorganization. Shareholders have, however, the right to
redeem from Conestoga their Conestoga Portfolio shares at net asset value until
the Effective Time of the Reorganization, and thereafter shareholders may redeem
from CoreFunds the CoreFunds shares acquired by them in the Reorganization at
net asset value.
QUORUM. In the event that a quorum is not present at the Meeting, or in
the event that a quorum is present at the Meeting but sufficient votes to
approve the Reorganization Agreement and the transactions contemplated thereby
are not received, the persons named as proxies may propose one or more
adjournments of the Meeting to permit further solicitation of proxies. Any such
adjournment will require the affirmative vote of a majority of those shares
affected by the adjournment that are represented at the Meeting in person or by
proxy. If a quorum is present, the persons named as proxies will vote those
proxies which they are entitled to vote FOR the Reorganization Agreement, in
favor of such adjournments, and will vote those proxies required to be voted
AGAINST such proposals against any adjournment. A shareholder vote may be taken
with respect to one or more Conestoga Portfolios prior to any such adjournment
if sufficient votes have been received for approval with respect to any such
Conestoga Portfolio. A quorum is constituted with respect to a Conestoga
Portfolio by the presence in person or by proxy of the holders of more than 50%
of the outstanding shares of the Fund entitled to vote at the Meeting. Conestoga
proxies properly executed and marked with a negative vote or an abstention will
be considered to be present at the Meeting for the purposes of determining the
existence of a quorum for the transaction of business.
ANNUAL MEETINGS. CoreFunds does not presently intend to hold annual
meetings of shareholders for the election of directors and other business unless
and until such time as less than a majority of the directors holding office have
been elected by the shareholders, at which time the directors then in office
will call a shareholders' meeting for the election of directors. Shareholders
have the right to call a meeting of shareholders to consider the removal of one
or more directors or for other matters and such meetings will be called when
requested in writing by the holders of record of 10% or more of CoreFunds'
outstanding shares of common stock. To the extent required by law, CoreFunds
will assist in shareholder communications on such matters.
ADDITIONAL INFORMATION ABOUT COREFUNDS
Information about the Existing CoreFunds Portfolios is included in the
Prospectuses accompanying this Combined Proxy Statement/Prospectus, which are
incorporated by reference herein. Additional information about these Portfolios
is included in their Statement of Additional Information dated November 1, 1995
which has been filed with the SEC. A copy of the Statement of Additional
Information may be obtained without charge by writing to CoreFunds c/o 680 East
Swedesford Road, Wayne, PA 19087, or by calling CoreFunds at 1-800-355-CORE.
CoreFunds is subject to the informational requirements of the Securities
Exchange Act of 1934 and the 1940 Act, as applicable, and, in accordance with
such requirements, files proxy materials, reports and other information with the
SEC. These materials can be inspected and copied at the Public Reference
Facilities maintained by the SEC at 450 Fifth Street, N.W., Washington, D.C.
20549, and at the offices of listed above and at the SEC's Regional Offices at 7
World Trade Center, Suite 1300, New York, New York 10048 and 500 West Madison
Street, Suite 1400, Chicago, Illinois 60661. Copies of such material can also be
obtained from the Public Reference Branch, Office of Consumer Affairs and
Information Services, Securities and Exchange Commission, Washington, D.C.
20549, at prescribed rates.
The current directors and officers of CoreFunds will continue as directors
and officers following the Reorganization. Additionally, subject to the approval
of CoreFunds' shareholders, CoreFunds expects to add two additional directors
prior to the Reorganization. One of the nominees, Thomas J. Taylor, is currently
a trustee of Conestoga. Information concerning Mr. Taylor can be found below
under 'Additional Information About Conestoga.' The other nominee, Cheryl H.
Wade, is the Associate General Secretary and Treasurer, American Baptist
Churches. From 1990 until 1993, Ms. Wade was the Treasurer of the Ministers and
Missionaries Benefit Board, American Baptist Churches.
58
<PAGE>
Ms. Wade is 48. The name and address of the current directors and officers, as
well as information concerning his or her principal occupations during the past
five years are set forth below.
<TABLE>
<CAPTION>
POSITION(S) HELD PRINCIPAL OCCUPATIONS
NAME AND ADDRESS AGE WITH COREFUNDS DURING PAST 5 YEARS
- --------------------------------------- ----------- ----------------------- -----------------------------------------
<S> <C> <C> <C>
Erin Anderson 40 Director Professor of Marketing, INSEAD,
INSEAD Fountainebleu, France since 1994;
Boulevard de Constance Associate Professor of Marketing, The
77035 Fountainbleau Wharton School of the University of
Cedex, France Pennsylvania until 1994.
Emil J. Mikity 67 Director Retired; Senior Vice President
302 Country Club Drive Investments, Atochem North America until
Wilmington, DE 19803 1989.
George H. Strong 69 Director Financial Consultant.
946 Navesink Road
Locust, NJ 09760
David G. Lee 43 President Senior Vice President of SFM and SFS
680 East Swedesford Road since 1993; Vice President of SFM and SFS
Wayne, PA 19087 since 1991; President, GW Sierra Trust
Funds prior to 1991.
Carmen V. Romeo 43 Treasurer, Assistant Director, Executive Vice President, Chief
680 East Swedesford Road Secretary Financial Officer and Treasurer of SEI
Wayne, PA 19087 Corporation; Director and Treasurer of
SFM and SFS.
James W. Jennings 59 Secretary Partner of the law firm of Morgan, Lewis
2000 One Logan Square & Bockius.
Philadelphia, PA 19103
Kevin P. Robins 34 Vice President, Senior Vice President and General Counsel
680 East Swedesford Road Assistant Secretary of SEI Corporation and SFS since 1994;
Wayne, PA 19087 Vice President and Assistant Secretary of
SFM and SFS, 1992-1994; Associate of the
law firm of Morgan, Lewis & Bockius prior
to 1992.
Sandra K. Orlow 42 Vice President, Vice President and Assistant Secretary of
680 East Swedesford Road Assistant Secretary SFM and SFS.
Wayne, PA 19087
Robert B. Carroll 35 Vice President, Vice President and Assistant Secretary of
680 East Swedesford Road Assistant Secretary SEI Corporation, SFM and SFS since 1994.
Wayne, PA 19087 United States Securities and Exchange
Commission, Division of Investment
Management, 1990-1994.
Kathryn L. Stanton 37 Vice President, Vice President and Assistant Secretary of
680 East Swedesford Road Assistant Secretary SFM and SFS since 1994. Associate of the
Wayne, PA 19087 law firm of Morgan, Lewis & Bockius
before 1994.
</TABLE>
59
<PAGE>
<TABLE>
<CAPTION>
POSITION(S) HELD PRINCIPAL OCCUPATIONS
NAME AND ADDRESS AGE WITH COREFUNDS DURING PAST 5 YEARS
- --------------------------------------- ----------- ----------------------- -----------------------------------------
<S> <C> <C> <C>
Richard J. Shoch 29 Vice President and Vice President and Assistant Secretary of
680 East Swedesford Road Assistant Secretary SEI Corporation since 1995; prior thereto
Wayne, PA 19087 Regulatory Manager of SEI Corporation.
Joseph Lydon 36 Vice President and Director of Business Administration of
680 East Swedesford Road Assistant Secretary Fund Resources for SEI Corporation since
Wayne, PA 19087 April 1995. Prior thereto, Vice President
-- Dreman Value Management, LP and
President -- Dreman Financial Services,
Inc.
Stephen G. Meyer 30 Controller and Chief Vice President and Controller -- Fund
680 East Swedesford Road Accounting Officer Resources, a division of SEI Corporation;
Wayne, PA 19087 Director -- Internal Audit and Risk
Management -- SEI Corporation, 1992-1995.
Coopers & Lybrand, Senior Associate,
1990-1992.
</TABLE>
ADDITIONAL INFORMATION ABOUT CONESTOGA
Information about Conestoga is incorporated herein by reference from its
Prospectuses dated February 21, 1995 (as revised through November 3, 1995) and
Statement of Additional Information, dated May 1, 1995 (as revised through
November 3, 1995), copies of which may be obtained without charge by writing or
calling Conestoga at the address and telephone number shown on the cover page of
this Combined Proxy Statement/Prospectus. Reports and other information filed by
Conestoga can be inspected and copied at the Public Reference Facilities
maintained by the SEC at 450 Fifth Street, N.W., Washington, D.C. 20549, and
copies of such material can be obtained from the Public Reference Branch, Office
of Consumer Affairs and Information Services, Securities and Exchange
Commission, Washington, D.C. 20549, at prescribed rates.
The name and address of each trustee and officer of Conestoga as well as
information concerning his or her principal occupations during the past five
years are as follows:
<TABLE>
<CAPTION>
POSITION(S) HELD PRINCIPAL OCCUPATIONS
NAME AND ADDRESS AGE WITH CONESTOGA DURING PAST 5 YEARS
- --------------------------------------- --- ----------------------- -----------------------------------------
<S> <C> <C> <C>
Thomas J. Taylor 56 Chairman and Trustee Consultant; Trustee, Community Heritage
1015 Darby Drive Fund
Yardley, PA 19067
Dominic S. Genuardi, Sr.* 72 Trustee Retired; Chief Executive Officer,
805 East Germantown Pike Genuardi Supermarkets, Inc. until October
Norristown, PA 19401 1990.
Steven I. Gross* 49 Trustee Managing Partner, Gross & Company
2655 Philmont Avenue (certified public accountants).
Huntingdon Valley, PA 19006
Robert C. Kingston 67 Trustee Consultant; Member of the Special
1603 River Farm Drive Operations Policy Group of the Secretary
Alexandria, VA 22308 of Defense; Director, Vinnell
Corporation; Founder, Military
Professional Resources, Inc.
</TABLE>
60
<PAGE>
<TABLE>
<CAPTION>
POSITION(S) HELD PRINCIPAL OCCUPATIONS
NAME AND ADDRESS AGE WITH CONESTOGA DURING PAST 5 YEARS
- --------------------------------------- --- ----------------------- -----------------------------------------
<S> <C> <C> <C>
Dale E. Smith 65 Trustee Retired; Formerly President, Farm
230 West Washington Square Journal, Inc. until November 1995
Philadelphia, PA 19106
David G. Lee 43 President and Chief Senior Vice President of SFM and SFS
680 East Swedesford Road Executive Officer since 1993; Vice President Officer of SFM
Wayne, PA 19087 and SFS since 1991; President of G.W.
Sierra Trust Funds since 1991.
Sandra K. Orlow 42 Vice President and Vice President and Assistant Secretary of
680 East Swedesford Road Assistant Secretary SFM and SFS.
Wayne, PA 19087
Robert B. Carroll 35 Vice President and Vice President and Assistant Secretary of
680 East Swedesford Road Assistant Secretary SEI Corporation, SFM and SFS since 1994.
Wayne, PA 19087 United States Securities and Exchange
Commission, Division of Investment
Management, 1990-1994.
Kathryn L. Stanton 37 Vice President and Vice President and Assistant Secretary of
680 East Swedesford Road Assistant Secretary SFM and SFS since 1994. Associate of the
Wayne, PA 19087 law firm of Morgan, Lewis & Bockius
before 1994.
Kevin P. Robins 34 Vice President and Senior Vice President and General Counsel
680 East Swedesford Road Assistant Secretary of SEI Corporation and SFS since 1994;
Wayne, PA 19087 Vice President and Assistant Secretary of
SFM and SFS, 1992-1994; Associate of the
law firm of Morgan, Lewis & Bockius prior
to 1992.
Henry S. Hilles, Jr. 56 Secretary Partner in the law firm of Drinker Biddle
1345 Chestnut Street & Reath.
Philadelphia, PA 19107
Stephen G. Meyer 30 Treasurer Vice President and Controller -- Fund
680 East Swedesford Road Resources, a division of SEI; Director --
Wayne, PA 19087 Internal Audit and Risk Management -- SEI
Corporation, 1992-1995. Coopers &
Lybrand, Senior Associate, 1990-1992.
</TABLE>
- ------------------
* May be deemed to be an 'interested person' of Conestoga as defined in the 1940
Act.
ADDITIONAL INFORMATION ABOUT THE INVESTMENT
ADVISER AND SUB-ADVISER
MIC's principal offices are located at 55 Valley Stream Parkway, Malvern,
Pennsylvania 19355. MIC is a wholly-owned subsidiary of Meridian Asset
Management, Inc., which is located at 55 Valley Stream Parkway, Malvern,
Pennsylvania 19355. Meridian Asset Management, Inc. is a wholly-owned subsidiary
of Meridian Bancorp, Inc., a regional multi-bank holding company located at 35
North Sixth Street, Reading, Pennsylvania 19603. MIC is registered as an
investment adviser under the Investment
62
<PAGE>
Advisers Act of 1940. The current advisory contract was most recently submitted
for shareholder approval on February 28, 1991. MIC does not serve as investment
advisor to any other investment companies.
At January 26, 1996, no persons beneficially owned 10% or more of any class
of issued and outstanding voting securities of Meridian Bancorp, Inc.
The name and principal occupation of the directors and principal executive
officers of MIC are as follows:
MERIDIAN INVESTMENT COMPANY
<TABLE>
<CAPTION>
POSITION WITH MIC NAME OTHER BUSINESS CONNECTION(S) TYPE OF BUSINESS
- -------------------- --------------------------- ------------------------------------ -----------------------
<S> <C> <C> <C>
Director George J. Baxter Director, Asset
Meridian Asset Management, Inc. Management
Trust Company
Meridian Trust Company,
P.O. Box 2000,
Valley Forge, PA 19482
Director, Trust Company
Delaware Trust Capital
Management, Inc.
Delaware Trust Company Banking
900 Market Street
Wilmington, DE 19801
Senior Vice President Brokerage
Chicago Corporation
16 South Main Street
Yardley, PA 19067
Director DeLight E. Breidegam, Jr. President Battery
East Penn Manufacturing
Manufacturing Co., Inc.
Lyon Station, PA 19536
Director Bank
Meridian Bancorp, Inc. Holding Co.
Meridian Bank Bank
35 North Sixth Street
Reading, PA 19603
Director
Meridian Asset Asset
Management, Inc. Management
Meridian Trust Company Trust
P.O. Box 2000 Company
Valley Forge, PA 19482
Director
Spotts, Stevens & McCoy Engineering
345 N. Wyomissing Blvd.
Reading, PA 19610
President and Philip H. Brown, II Director
Director Meridian Securities, Inc. Broker-Dealer
35 North Sixth St.
Reading, PA 19603
Director Walter J. Laird, Jr. Senior Vice President Broker-Dealer
Dean Witter Reynolds, Inc.
P.O. Box 749
Wilmington, DE 19899
</TABLE>
63
<PAGE>
<TABLE>
<CAPTION>
POSITION WITH MIC NAME OTHER BUSINESS CONNECTION(S) TYPE OF BUSINESS
- -------------------- --------------------------- ------------------------------------ -----------------------
<S> <C> <C> <C>
Director Investment
Wentz Corporation Management
707 Foulk Rd.
Suite 102
Wilmington, DE 19803-3700
Director Investment
Sinkler Corporation Management
707 Foulk Rd.
Suite 102
Wilmington, DE 19803-3700
Director Banking
Delaware Trust Company
900 Market Street
Wilmington, DE 19801
Director Trust Company
Delaware Trust
Capital Management
900 Market Street
Wilmington, DE 19801
Director Asset
Meridian Asset Management Management
P.O. Box 2000
Valley Forge, PA 19482
Director Nancy Pearlstine Conger, 182 Oaks Road Homemaker
C.F.P. Millington, NJ 07946
Director
Meridian Asset Asset
Management, Inc. Management
Meridian Trust Company Trust
P.O. Box 2000 Company
Valley Forge, PA 19482
Director Sidney D. Kline, Jr. Attorney and Principal
Stevens and Lee Law
607 Washington Street
Reading, PA 19601
Director
Meridian Bancorp, Inc. Bank Holding
Meridian Bank Co. Bank
35 North Sixth Street
Reading, PA 19603
Director
Meridian Asset Asset
Management, Inc. Management
Meridian Trust Company Trust
P.O. Box 2000 Company
Valley Forge, PA 19482
Director
Meridian Title Title
Insurance Company Insurance
101 N. 6th Street
Reading, PA 19603
Director
American Title Title
Insurance Company Insurance
1101 Brickell Avenue
Miami, FL 33131
</TABLE>
64
<PAGE>
<TABLE>
<CAPTION>
POSITION WITH MIC NAME OTHER BUSINESS CONNECTION(S) TYPE OF BUSINESS
- -------------------- --------------------------- ------------------------------------ -----------------------
<S> <C> <C> <C>
Director
Horrigan American, Inc. Equipment
Flying Hills Leasing
Corporate Center
Reading, PA 19607
Director
Reading Eagle Company Newspaper
345 Penn Street
Reading, PA 19601
Director
FCP, Inc. Manufacturer
Flying Hills Building
Reading, PA 19607 Material
Director
The Bachman Company Snack Food
50 N. 4th Street
Reading, PA 19601
Director Blaine T. Phillips Partner Law Firm
Potter Anderson & Corroon
350 Delaware Trust Building
P.O. Box 951
Wilmington, DE 19899
Director Banking
Delaware Trust Company
900 Market Street
Wilmington, DE 19801
Director Trust Company
Delaware Trust
Capital Management
900 Market Street
Wilmington, DE 19801
Director Trust Company
Meridian Trust Company
P.O. Box 2000
Valley Forge, PA 19482
Director Asset
Meridian Asset Management Management
P.O. Box 2000
Valley Forge, PA 19482
Director George Strawbridge, Jr. Owner Thoroughbred
Augustine Stables Racing and
3801 Kennett Pike Breeding
Suite 100-B
Wilmington, DE 19807
Director Foods
Campbell Soup Company
Campbell Place
Camden, NJ 08101
Partner Venture
Philadelphia Ventures Capital
200 S. Broad Street
Philadelphia, PA 19102
Co-owner Survey
GAR, Inc. Company
3801 Kennett Pike
Suite 100-B
Wilmington, DE 19807
</TABLE>
65
<PAGE>
<TABLE>
<CAPTION>
POSITION WITH MIC NAME OTHER BUSINESS CONNECTION(S) TYPE OF BUSINESS
- -------------------- --------------------------- ------------------------------------ -----------------------
<S> <C> <C> <C>
Co-owner Survey
Keystone Aerial Company
Surveys
P.O. Box 21059
Philadelphia, PA 19114
Director National
Niagara Frontier Hockey
Hockey Corporation League
140 Main Street
Buffalo, NY 14202
Director Banking
Delaware Trust Company
900 Market Street
Wilmington, DE 19801
Director Trust Company
Delaware Trust
Capital Management
900 Market Street
Wilmington, DE 19801
Director Bank Holding
Meridian Bancorp, Company, Inc.
Meridian Bank
35 North Sixth Street
Reading, PA 19603
Senior Craig A. Moyer None
Investment
Manager
Senior Joseph E. Stocke None
Investment
Manager
Assistant Cathy L. Rahab None
Vice
President
Vice Leslie M. Varrelman None
President
Investment Christine M. Frampton None
Officer
</TABLE>
66
<PAGE>
Marvin and Palmer's principal offices are located at 1201 N. Market Street,
Suite 2300, Wilmington, Delaware 19801. Marvin and Palmer is a privately held
company owned by Messrs. Marvin, Palmer and twenty one other holders. Marvin and
Palmer is registered as an investment adviser under the Investment Advisers Act
of 1940.
The table below sets forth information concerning other investment
companies that have similar investment objectives for which Marvin and Palmer
act as investment adviser or sub-adviser.
<TABLE>
<CAPTION>
NET ASSET
AS OF ANNUAL FEE
NAME OF INVESTMENT COMPANY DECEMBER 27, 1995 (BASED ON AVERAGE NET ASSETS)
- ------------------------------------ --------------------- ---------------------------------------------------
<S> <C> <C>
First American International Fund $1.3 million .75% of the first $100 million of the Fund's
average daily net assets, .70% of the next $100
million of the Fund's average daily net assets,
.65% of the third $100 million of the Fund's
average daily net assets, and .60% of the Fund's
average daily net assets in excess of $300 million.
</TABLE>
SFM serves as administrator and SFC serves as distributor for both
Conestoga and CoreFunds. The principal address of SFM and SFC is 680 East
Swedesford Road, Wayne, Pennsylvania 19087.
LITIGATION
Neither Conestoga nor CoreFunds is involved in any litigation that would
have any material adverse financial effect upon either the Conestoga Portfolios
or the CoreFunds Portfolios.
FINANCIAL HIGHLIGHTS
CONESTOGA FINANCIAL HIGHLIGHTS. The tables set forth below present
financial information for the Institutional Shares and Retail Shares of the
Conestoga Cash Management, Tax-Free, U.S. Treasury Securities, Equity, Special
Equity, Bond, Intermediate Income, Pennsylvania Tax-Free Bond, Balanced,
Short-Term Income and International Equity Portfolios. This information is
derived from the Conestoga Portfolios' audited financial statements for the
fiscal year ended October 31, 1995. The data should be read in conjunction with
the audited financial statements and related notes which are included in the
Statement of Additional Information related to this Combined Proxy
Statement/Prospectus. The financial highlights for the Conestoga Portfolios for
prior periods are contained in Conestoga's Prospectuses dated February 21, 1995,
as supplemented November 3, 1995, and the financial statements for the Conestoga
Portfolios for prior periods are contained in Conestoga's Annual Report to
Shareholders and are incorporated by reference into Conestoga's Statement of
Additional Information dated May 1, 1995 (as revised November 3, 1995), which
Prospectuses and Statement of Additional Information are incorporated herein by
reference.
67
<PAGE>
SELECTED DATA FOR A CONESTOGA SHARE OF CAPITAL STOCK
OUTSTANDING THROUGHOUT THE PERIOD INDICATED:
CASH MANAGEMENT FUND
<TABLE>
<CAPTION>
FISCAL YEAR ENDED
OCTOBER 31, 1995
----------------------
INSTITUTIONAL RETAIL
SHARES SHARES
----------- ---------
<S> <C> <C>
Net Asset Value, beginning of period................................................... $1.00 $1.00
Net Investment Income.................................................................. .05 .05
Net Realized and Unrealized Gain/(Loss) on Investments................................. -- --
Dividends to Shareholders from Net Investment Income................................... (.05) (.05)
Distributions to Shareholders from Net Realized Gain on Investment Transactions........ -- --
Total Distributions.................................................................... (.05) (.05)
Net Asset Value, end of period......................................................... $1.00 $1.00
Total Return........................................................................... 5.43% 5.25%
Net Assets, end of period (000's omitted).............................................. $ 234,520 $ 3,358
Ratio of Expenses to Average Net Assets................................................ .56% .74%
Ratio of Net Investment Income to Average Net Assets................................... 5.32% 5.16%
Ratio of Expenses to Average Net Assets (Excluding Waivers)............................ .79% .97%
Ratio of Net Investment Income to Average
Net Assets (Excluding Waivers)....................................................... 5.09% 4.93%
</TABLE>
SELECTED DATA FOR A CONESTOGA SHARE OF CAPITAL STOCK
OUTSTANDING THROUGHOUT THE PERIOD INDICATED:
TAX-FREE FUND
<TABLE>
<CAPTION>
FISCAL YEAR ENDED
OCTOBER 31, 1995
----------------------
INSTITUTIONAL RETAIL
SHARES SHARES
----------- ---------
<S> <C> <C>
Net Asset Value, beginning of period................................................... $1.00 $1.00
Net Investment Income.................................................................. .03 .03
Net Realized and Unrealized Gain/(Loss) on Investments................................. -- --
Dividends to Shareholders from Net Investment Income................................... (.03) (.03)
Distributions to Shareholders from Net Realized Gain on Investment Transactions........ -- --
Total Distributions.................................................................... (.03) (.03)
Net Asset Value, end of period......................................................... $1.00 $1.00
Total Return........................................................................... 3.43% 3.39%
Net Assets, end of period (000's omitted).............................................. $60,509 $ 1,282
Ratio of Expenses to Average Net Assets................................................ .46% .48%
Ratio of Net Investment Income to Average Net Assets................................... 3.37% 3.35%
Ratio of Expenses to Average Net Assets (Excluding Waivers)............................ .83% .88%
Ratio of Net Investment Income to Average
Net Assets (Excluding Waivers)....................................................... 3.00% 2.95%
</TABLE>
67
<PAGE>
SELECTED DATA FOR A CONESTOGA SHARE OF CAPITAL STOCK
OUTSTANDING THROUGHOUT THE PERIOD INDICATED:
U.S. TREASURY SECURITIES FUND
<TABLE>
<CAPTION>
FISCAL YEAR ENDED
OCTOBER 31, 1995
----------------------
INSTITUTIONAL RETAIL
SHARES SHARES
----------- ---------
<S> <C> <C>
Net Asset Value, beginning of period................................................... $1.00 $1.00
Net Investment Income.................................................................. .05 .05
Net Realized and Unrealized Gain/(Loss) on Investments................................. -- --
Dividends to Shareholders from Net Investment Income................................... (.05) (.05)
Distributions to Shareholders from Net Realized Gain on Investment Transactions........ -- --
Total Distributions.................................................................... (.05) (.05)
Net Asset Value, end of period......................................................... $1.00 $1.00
Total Return........................................................................... 5.27% 5.16%
Net Assets, end of period (000's omitted).............................................. $ 444,529 $730
Ratio of Expenses to Average Net Assets................................................ .62% .73%
Ratio of Net Investment Income to Average Net Assets................................... 5.14% 5.26%
Ratio of Expenses to Average Net Assets (Excluding Waivers)............................ .78% .79%
Ratio of Net Investment Income to Average Net Assets (Excluding Waivers)............... 4.98% 5.20%
</TABLE>
SELECTED DATA FOR A CONESTOGA SHARE OF CAPITAL STOCK
OUTSTANDING THROUGHOUT THE PERIOD INDICATED:
EQUITY FUND
<TABLE>
<CAPTION>
FISCAL YEAR ENDED
OCTOBER 31, 1995
----------------------
INSTITUTIONAL RETAIL
SHARES SHARES
----------- ---------
<S> <C> <C>
Net Asset Value, beginning of period................................................... $15.00 $15.00
Net Investment Income.................................................................. .19 .18
Net Realized and Unrealized Gain/(Loss) on Investments................................. 2.87 2.87
Dividends to Shareholders from Net Investment Income................................... (.19) (.17)
Distributions to Shareholders from Net Realized Gain on Investment Transactions........ (.80) (.80)
Total Distributions.................................................................... (.99) (.97)
Net Asset Value, end of period......................................................... $17.07 $ 17.08
Total Return*.......................................................................... 22.00% 21.94%
Net Assets, end of period (000's omitted).............................................. $ 378,352 $ 6,591
Ratio of Expenses to Average Net Assets................................................ 1.05% 1.34%
Ratio of Net Investment Income to Average Net Assets................................... 1.44% 1.23%
Ratio of Expenses to Average Net Assets (Excluding Waivers)............................ 1.10% 1.53%
Ratio of Net Investment Income to Average Net Assets (Excluding Waivers)............... 1.447% 1.04%
Portfolio turnover rate................................................................ 119% 119%
</TABLE>
- ------------------
* Total Return figures do not reflect applicable sales loads.
68
<PAGE>
SELECTED DATA FOR A CONESTOGA SHARE OF CAPITAL STOCK
OUTSTANDING THROUGHOUT THE PERIOD INDICATED:
SPECIAL EQUITY FUND
<TABLE>
<CAPTION>
FISCAL YEAR ENDED
OCTOBER 31, 1995
----------------------
INSTITUTIONAL RETAIL
SHARES SHARES
----------- ---------
<S> <C> <C>
Net Asset Value, beginning of period................................................... $9.37 $9.37
Net Investment Income.................................................................. .12 .12
Net Realized and Unrealized Gain/(Loss) on Investments................................. 2.12 2.12
Dividends to Shareholders from Net Investment Income................................... (.12) (.12)
Distributions to Shareholders from Net Realized Gain on Investment Transactions........ (.07) (.07)
Total Distributions.................................................................... (.19) (.19)
Net Asset Value, end of period......................................................... $11.42 $ 11.42
Total Return*.......................................................................... 24.44% 24.44%
Net Assets, end of period (000's omitted).............................................. $57,396 $734
Ratio of Expenses to Average Net Assets................................................ .32% .27%
Ratio of Net Investment Income to Average Net Assets................................... 1.14% 1.29%
Ratio of Expenses to Average Net Assets (Excluding Waivers)............................ 1.97% 2.24%
Ratio of Net Investment Income to Average Net Assets (Excluding Waivers)............... (.51)% (.68)%
Portfolio turnover rate................................................................ 129% 129%
</TABLE>
SELECTED DATA FOR A CONESTOGA SHARE OF CAPITAL STOCK
OUTSTANDING THROUGHOUT THE PERIOD INDICATED:
BOND FUND
<TABLE>
<CAPTION>
FISCAL YEAR ENDED
OCTOBER 31, 1995
----------------------
INSTITUTIONAL RETAIL
SHARES SHARES
----------- ---------
<S> <C> <C>
Net Asset Value, beginning of period................................................... $9.81 $9.81
Net Investment Income.................................................................. .61 .60
Net Realized and Unrealized Gain/(Loss) on Investments................................. .71 .72
Dividends to Shareholders from Net Investment Income................................... (.58) (.57)
Distributions to Shareholders from Net Realized Gain on Investment Transactions........ -- --
Total Distributions.................................................................... (.58) (.57)
Net Asset Value, end of period......................................................... $10.55 $ 10.56
Total Return*.......................................................................... 13.87% 13.83%
Net Assets, end of period (000's omitted).............................................. $ 194,442 $ 1,373
Ratio of Expenses to Average Net Assets................................................ .71% .97%
Ratio of Net Investment Income to Average Net Assets................................... 6.09% 6.02%
Ratio of Expenses to Average Net Assets (Excluding Waivers)............................ 1.12% 1.44%
Ratio of Net Investment Income to Average Net Assets (Excluding Waivers)............... 5.68% 5.55%
Portfolio turnover rate................................................................ 352% 352%
</TABLE>
- ------------------
* Total Return figures do not reflect applicable sales loads.
69
<PAGE>
SELECTED DATA FOR A CONESTOGA SHARE OF CAPITAL STOCK
OUTSTANDING THROUGHOUT THE PERIOD INDICATED:
INTERMEDIATE INCOME FUND
<TABLE>
<CAPTION>
FISCAL YEAR ENDED
OCTOBER 31, 1995
----------------------
INSTITUTIONAL RETAIL
SHARES SHARES
----------- ---------
<S> <C> <C>
Net Asset Value, beginning of period................................................... $10.27 $10.27
Net Investment Income.................................................................. .57 .55
Net Realized and Unrealized Gain/(Loss) on Investments................................. .42 .44
Dividends to Shareholders from Net Investment Income................................... (.55) (.54)
Distributions to Shareholders from Net Realized Gain on Investment Transactions........ -- --
Total Distributions.................................................................... (.55) (.54)
Net Asset Value, end of period......................................................... $10.71 $ 10.72
Total Return*.......................................................................... 9.92% 9.90%
Net Assets, end of period (000's omitted).............................................. $ 138,243 $ 1,230
Ratio of Expenses to Average Net Assets................................................ .64% .93%
Ratio of Net Investment Income to Average Net Assets................................... 5.72% 5.47%
Ratio of Expenses to Average Net Assets (Excluding Waivers)............................ 1.15% 1.51%
Ratio of Net Investment Income to Average Net Assets (Excluding Waivers)............... 5.21% 4.89%
Portfolio turnover rate................................................................ 260% 260%
</TABLE>
SELECTED DATA FOR A CONESTOGA SHARE OF CAPITAL STOCK
OUTSTANDING THROUGHOUT THE PERIOD INDICATED:
PENNSYLVANIA TAX-FREE BOND FUND
<TABLE>
<CAPTION>
FISCAL YEAR ENDED
OCTOBER 31, 1995
----------------------
INSTITUTIONAL RETAIL
SHARES SHARES
----------- ---------
<S> <C> <C>
Net Asset Value, beginning of period................................................... $9.56 $9.56
Net Investment Income.................................................................. .47 .47
Net Realized and Unrealized Gain/(Loss) on Investments................................. .67 .67
Dividends to Shareholders from Net Investment Income................................... (.46) (.46)
Distributions to Shareholders from Net Realized Gain on Investment Transactions........ (.01) (.01)
Total Distributions.................................................................... (.47) (.47)
Net Asset Value, end of period......................................................... $10.23 $ 10.23
Total Return*.......................................................................... 12.30% 12.30%
Net Assets, end of period (000's omitted).............................................. $5,977 $820
Ratio of Expenses to Average Net Assets................................................ .51% .51%
Ratio of Net Investment Income to Average Net Assets................................... 4.64% 4.64%
Ratio of Expenses to Average Net Assets (Excluding Waivers)............................ 1.65% 1.62%
Ratio of Net Investment Income to Average Net Assets (Excluding Waivers)............... 3.50% 3.53%
Portfolio turnover rate................................................................ 15% 15%
</TABLE>
- ------------------
* Total Return figures do not reflect applicable sales loads.
70
<PAGE>
SELECTED DATA FOR A CONESTOGA SHARE OF CAPITAL STOCK
OUTSTANDING THROUGHOUT THE PERIOD INDICATED:
BALANCED FUND
<TABLE>
<CAPTION>
FISCAL YEAR ENDED
OCTOBER 31, 1995
----------------------
INSTITUTIONAL RETAIL
SHARES SHARES
----------- ---------
<S> <C> <C>
Net Asset Value, beginning of period................................................... $10.00 $9.97
Net Investment Income.................................................................. .12 .11
Net Realized and Unrealized Gain/(Loss) on Investments................................. .37 .42
Dividends to Shareholders from Net Investment Income................................... (.11) (.11)
Distributions to Shareholders from Net Realized Gain on Investment Transactions........ -- --
Total Distributions.................................................................... (.11) (.11)
Net Asset Value, end of period......................................................... $10.38 $ 10.39
Total Return*+......................................................................... 4.89% 5.27%
Net Assets, end of period (000's omitted).............................................. 38,494 $69
Ratio of Expenses to Average Net Assets+............................................... .82% 1.07%
Ratio of Net Investment Income to Average Net Assets+.................................. 3.66% 3.37%
Ratio of Expenses to Average Net Assets (Excluding Waivers)+........................... 1.07% 1.32%
Ratio of Net Investment Income to Average Net Assets (Excluding Waivers)+.............. 3.41% 3.12%
Portfolio turnover rate................................................................ 65% 65%
</TABLE>
SELECTED DATA FOR A CONESTOGA SHARE OF CAPITAL STOCK
OUTSTANDING THROUGHOUT THE PERIOD INDICATED:
SHORT-TERM INCOME FUND
<TABLE>
<CAPTION>
FISCAL YEAR ENDED
OCTOBER 31, 1995
----------------------
INSTITUTIONAL RETAIL
SHARES SHARES
----------- ---------
<S> <C> <C>
Net Asset Value, beginning of period................................................... $10.00 $10.01
Net Investment Income.................................................................. .25 .23
Net Realized and Unrealized Gain/(Loss) on Investments................................. .03 .02
Dividends to Shareholders from Net Investment Income................................... (.23) (.22)
Distributions to Shareholders from Net Realized Gain on Investment Transactions........ -- --
Total Distributions.................................................................... (.23) (.22)
Net Asset Value, end of period......................................................... $10.05 $ 10.04
Total Return*+......................................................................... 2.87% 2.57%
Net Assets, end of period (000's omitted).............................................. $36,059 $11
Ratio of Expenses to Average Net Assets+............................................... .63% .88%
Ratio of Net Investment Income to Average Net Assets+.................................. 5.43% 5.05%
Ratio of Expenses to Average Net Assets (Excluding Waivers)+........................... 1.08% 1.33%
Ratio of Net Investment Income to Average Net Assets (Excluding Waivers)+.............. 4.98% 4.60%
Portfolio turnover rate................................................................ 40% 40%
</TABLE>
- ------------------
* Total Return figures do not reflect applicable sales loads.
+ Annualized.
71
<PAGE>
SELECTED DATA FOR A CONESTOGA SHARE OF CAPITAL STOCK
OUTSTANDING THROUGHOUT THE PERIOD INDICATED:
INTERNATIONAL EQUITY FUND
<TABLE>
<CAPTION>
FISCAL YEAR ENDED
OCTOBER 31, 1995
----------------------
INSTITUTIONAL RETAIL
SHARES SHARES
----------- ---------
<S> <C> <C>
Net Asset Value, beginning of period................................................... $10.00 $10.00
Net Investment Income.................................................................. -- (0.01)
Net Realized and Unrealized Gain/(Loss) on Investments................................. 1.01 1.00
Dividends to Shareholders from Net Investment Income................................... -- --
Distributions to Shareholders from Net Realized Gain on Investment Transactions........ -- --
Total Distributions.................................................................... -- (0)
Net Asset Value, end of period......................................................... $11.01 $ 10.99
Total Return*+......................................................................... 10.10% 9.90%
Net Assets, end of period (000's omitted).............................................. $13,372 $9
Ratio of Expenses to Average Net Assets+............................................... 1.88% 2.13%
Ratio of Net Investment Income to Average Net Assets+.................................. (.10)% (.69)%
Ratio of Expenses to Average Net Assets (Excluding Waivers)+........................... 1.88% 2.26%
Ratio of Net Investment Income to Average Net Assets (Excluding Waivers)+.............. (.10)% (.83)%
Portfolio turnover rate................................................................ 23% 23%
</TABLE>
- ------------------
* Total Return figures do not reflect applicable sales loads.
+ Annualized.
72
<PAGE>
FINANCIAL STATEMENTS
The financial statements for the Conestoga Portfolios for the fiscal year
ended October 31, 1995, are included in the Statement of Additional Information
related to this Combined Proxy Statement/Prospectus. The financial highlights
and the financial statements for Institutional and Individual shares of the
Existing CoreFunds Portfolios for the fiscal year ended June 30, 1995 are
contained in CoreFunds' Annual Report to Shareholders and in CoreFunds'
Prospectuses and Statement of Additional Information dated November 1, 1995,
each of which is incorporated by reference in this Combined Proxy
Statement/Prospectus.
The financial statements for the Conestoga Portfolios as of October 31,
1995, and the related statements of operations, changes in net assets and
financial highlights for the periods indicated in the financial statements
contained in Conestoga's Annual Report and incorporated by reference in this
Combined Proxy/Prospectus, have been incorporated herein in reliance on the
reports of Coopers & Lybrand L.L.P., independent auditors, given on the
authority of that firm as experts in accounting and auditing.
The financial statements of the Existing CoreFunds Portfolios as of June
30, 1995, and the related statements of operations, changes in net assets and
financial highlights for the periods indicated in the financial statements are
included in CoreFunds' Prospectuses and contained in CoreFunds' Statement of
Additional Information, and incorporated by reference in this Combined
Proxy/Prospectus, have been incorporated by reference herein in reliance on the
reports of Ernst & Young LLP, independent auditors, given on the authority of
that firm as experts in accounting and auditing.
OTHER BUSINESS
Conestoga's Board knows of no other business to be brought before the
Meeting. However, if any other matters come before the Meeting, it is the
intention that proxies which do not contain specific restrictions to the
contrary will be voted on such matters in accordance with the judgment of the
persons named in the enclosed form of proxy.
SHAREHOLDER INQUIRIES
Shareholder inquiries may be addressed to Conestoga in writing at the
address on the cover page of this Combined Proxy Statement/Prospectus or by
telephoning 1-800-344-2716.
------------------------
SHAREHOLDERS WHO DO NOT EXPECT TO BE PRESENT AT THE MEETING ARE REQUESTED
TO DATE AND SIGN THE ENCLOSED PROXY AND RETURN IT IN THE ENCLOSED ENVELOPE. NO
POSTAGE IS REQUIRED IF MAILED IN THE UNITED STATES.
73
<PAGE>
APPENDIX I
AGREEMENT AND PLAN OF
REORGANIZATION
BY AND BETWEEN
COREFUNDS, INC.
AND
CONESTOGA FAMILY OF FUNDS
DATED FEBRUARY 8, 1996
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
---------
<S> <C> <C>
I. Transfer of Assets of Conestoga Portfolios..................................................... A-1
II. Liquidating Distributions and Termination of Conestoga......................................... A-4
III. Valuation Times................................................................................ A-4
IV. Certain Representations, Warranties and Agreements of Conestoga................................ A-4
V. Certain Representations, Warranties and Agreements of CoreFunds................................ A-6
VI. Shareholder Action on Behalf of the Acquired Funds............................................. A-7
VII. N-14 Registration Statement and Proxy Solicitation Materials................................... A-8
VIII. Effective Times of the Reorganization.......................................................... A-8
IX. CoreFunds Conditions........................................................................... A-8
X. Conestoga Conditions........................................................................... A-10
XI. Tax Documents.................................................................................. A-11
XII. Finder's Fees.................................................................................. A-12
XIII. Announcements.................................................................................. A-12
XIV. Further Assurances............................................................................. A-12
XV. Termination of Representations and Warranties.................................................. A-12
XVI. Termination of Agreement....................................................................... A-12
XVII. Amendment and Waiver........................................................................... A-12
XVIII. Governing Law.................................................................................. A-12
XIX. Successors and Assigns......................................................................... A-13
XX. Beneficiaries.................................................................................. A-13
XXI. Conestoga Liability............................................................................ A-13
XXII. Notices........................................................................................ A-13
XXIII. Expenses....................................................................................... A-14
XXIV. Entire Agreement............................................................................... A-14
XXV. Counterparts................................................................................... A-14
</TABLE>
<PAGE>
AGREEMENT AND PLAN OF REORGANIZATION
AGREEMENT AND PLAN OF REORGANIZATION made as of February 8, 1996 between
COREFUNDS, INC., a Maryland corporation ('CoreFunds'), and CONESTOGA FAMILY of
FUNDS, a Massachusetts business trust ('Conestoga').
WHEREAS, the parties desire that substantially all of the known assets and
liabilities of Conestoga's portfolios be transferred to, and be acquired and
assumed by, certain CoreFunds portfolios in exchange for Individual Shares or
Institutional Shares of the CoreFunds portfolios which shall thereafter be
distributed by Conestoga to the holders of Retail Shares or Institutional Shares
of its portfolios, all as described in this Agreement (the 'Reorganization');
WHEREAS, the parties intend that the CoreFunds Special Equity Fund, Bond
Fund and Short-Term Income Fund portfolios will have nominal assets and
liabilities before the Reorganization and will continue the investment
operations of the Conestoga Special Equity Fund, Bond Fund and Short-Term Income
Fund (the 'Continuing Funds'), respectively, after the Reorganization;
WHEREAS, the Reorganization with respect to Conestoga's Cash Management
Fund, Tax-Free Fund, U.S. Treasury Securities Fund, Equity Fund, Intermediate
Income Fund, Pennsylvania Tax-Free Bond Fund, Balanced Fund and International
Equity Fund (the 'Reorganizing Funds') shall occur on a date that is prior to
the Reorganization with respect to the Continuing Funds;
WHEREAS, the parties intend that the transfers of assets, assumptions of
liabilities, and distributions of Individual Shares or Institutional Shares, as
the case may be, be treated as tax-free reorganizations under Section
368(a)(1)(C), 368(a)(1)(D), or 368(a)(1)(F) of the Internal Revenue Code of
1986, as amended (the 'Code'); and
WHEREAS, the parties intend that in connection with the Reorganization each
of the Conestoga portfolios shall be terminated and Conestoga shall be
terminated under state law and deregistered as described in this Agreement.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
hereinafter set forth and subject to the terms and conditions hereof, and
intending to be legally bound hereby, CoreFunds and Conestoga agree as follows:
I. Transfer of Assets of Conestoga Portfolios.
1.01 (a) At the Effective Time of the Reorganization (as defined in Article
VIII) with respect to each of the Conestoga portfolios (each, an
'Acquired Fund'), all property of every description, and all
interests, rights, privileges and powers of each Acquired Fund
other than cash in an amount necessary to pay any unpaid dividends
and distributions as provided in Article IV(g) (such assets, the
'Acquired Fund Assets') shall be transferred and conveyed by such
Acquired Fund to CoreFunds on behalf of one of its portfolios as
set forth in Section 1.02 (each, an 'Acquiring Fund'), and shall
be accepted by CoreFunds on behalf of such Acquiring Fund, and
CoreFunds, on behalf of such Acquiring Fund, shall assume all
known liabilities whether accrued, absolute, contingent or
otherwise, of such Acquired Fund reflected in the calculation of
such Acquired Fund's net asset value (the 'Acquired Fund
Liabilities'), so that at and after the Effective Time of the
Reorganization with respect to such Acquired Fund: (i) all assets
of such Acquired Fund shall become and be the assets of its
Acquiring Fund; and (ii) all known liabilities of such Acquired
Fund reflected as such in the calculation of the Acquired Fund's
net asset value shall attach to its Acquiring Fund as aforesaid
and may thenceforth be enforced against such Acquiring Fund to the
extent as if the same had been incurred by it. Without limiting
the generality of the foregoing, the Acquired Fund Assets shall
include all property and assets of any nature whatsoever,
including, without limitation, all cash, cash equivalents,
securities, claims and receivables (including dividend and
interest receivables) owned by an Acquired Fund, and (subject to
Section 1.01(b)) any deferred or prepaid expenses shown as an
asset on an Acquired Fund's books, at the
A-1
<PAGE>
Effective Time of the Reorganization of such Acquired Fund, and
all good will, all other intangible property and all books and
records belonging to an Acquired Fund. Recourse by any person for
the Acquired Fund Liabilities assumed by an Acquiring Fund shall,
at and after the Effective Time of the Reorganization of such
Acquired Fund, be limited to such Acquiring Fund.
(b) Notwithstanding Section 1.01(a), unamortized organizational
expenses of the Reorganizing Funds shall not be transferred or
assumed hereunder. The parties have been advised that such
expenses will be paid to such Reorganizing Funds by one or more
third parties and will be eliminated from the balance sheets of
such Reorganizing Funds prior to the applicable Effective Time of
the Reorganization of the Reorganizing Funds.
1.02 The assets of each Acquired Fund shall be acquired by the Acquiring
Fund identified below opposite its name, and the holders of each class of shares
of such Acquired Fund shall receive the class of shares of common stock of the
Acquiring Fund identified below opposite the name of such class:
<TABLE>
<CAPTION>
CONESTOGA PORTFOLIOS AND CLASSES COREFUNDS PORTFOLIOS AND CLASSES
- -------------------------------------------------------- --------------------------------------------------------
<S> <C>
Cash Management Fund Cash Reserve Fund
Institutional Shares Class Y -- Institutional Shares
(Class A Common Stock)
Retail Shares Class C -- Individual Shares
(Class A Common Stock, Class B)
Tax-Free Fund Tax-Free Reserve Fund
Institutional Shares Class Y -- Institutional Shares
(Class J Common Stock)
Retail Shares Class C -- Individual Shares
(Class J Common Stock, Class B)
U.S. Treasury Securities Fund Treasury Reserve Fund
Institutional Shares Class Y -- Institutional Shares
(Class B Common Stock)
Retail Shares Class C -- Individual Shares
(Class B Common Stock, Class B)
Intermediate Income Fund Short Intermediate Bond Fund
Institutional Shares Class Y -- Institutional Shares
(Class H Common Stock)
Retail Shares Class A -- Individual Shares
(Class H Common Stock, Class B)
Pennsylvania Tax-Free Bond Fund Pennsylvania Municipal Bond Fund
Institutional Shares Class Y -- Institutional Shares
(Class P Common Stock)
Retail Shares Class A -- Individual Shares
(Class P Common Stock, Class B)
Balanced Fund Balanced Fund
Institutional Shares Class Y -- Institutional Shares
(Class L Common Stock)
Retail Shares Class A -- Individual Shares
(Class L Common Stock, Class B)
</TABLE>
A-2
<PAGE>
<TABLE>
<CAPTION>
CONESTOGA PORTFOLIOS AND CLASSES COREFUNDS PORTFOLIOS AND CLASSES
- -------------------------------------------------------- --------------------------------------------------------
<S> <C>
International Equity Fund International Growth Fund
Institutional Shares Class Y -- Institutional Shares
(Class E Common Stock)
Retail Shares Class A -- Individual Shares
(Class E Common Stock, Class B)
Equity Fund Equity Fund
Institutional Shares Class Y -- Institutional Shares
(Class D Common Stock)
Retail Shares Class A -- Individual Shares
(Class D Common Stock, Class B)
Special Equity Fund Special Equity Fund
Institutional Shares Class Y -- Institutional Shares
Retail Shares Class A -- Individual Shares
Bond Fund Bond Fund
Institutional Shares Class Y -- Institutional Shares
Retail Shares Class A -- Individual Shares
Short-Term Income Fund Short-Term Income Fund
Institutional Shares Class Y -- Institutional Shares
Retail Shares Class A -- Individual Shares
</TABLE>
The Board of Directors of CoreFunds has adopted resolutions authorizing the
change of names of the Intermediate Bond Fund to the Short Intermediate Bond
Fund and of the Value Equity Fund to the Equity Fund and the change of
designations of the classes of each Acquiring Fund (i) from Individual-Class A
to Class A for each Acquiring Fund except the Cash Reserve Fund, Tax-Free
Reserve Fund and Treasury Reserve Fund, which will be designated Class C, and
(ii) from Institutional-Class B to Class Y for each Acquiring Fund. These
changes will be effective by the Effective Time of the Reorganization with
respect to each Acquired Fund.
1.03 In exchange for the transfer of the Acquired Fund Assets and the
assumption of the Acquired Fund Liabilities, CoreFunds shall simultaneously
issue at the applicable Effective Time of the Reorganization to each Acquired
Fund a number of full and fractional shares to the third decimal place, of the
Acquiring Fund specified in Section 1.02 and of the class or classes identified
in Section 1.02, all determined and adjusted as provided in this Agreement. The
number of each class of shares of the Acquiring Funds so issued will have an
aggregate net asset value equal to the value of the Acquired Fund Assets that
are represented by the class of shares of the Acquired Fund, the holders of
which shall receive such class of shares of the Acquiring Fund, as specified in
Section 1.02, all determined and adjusted as provided in this Agreement.
1.04 The net asset value of each class of shares of the Acquiring Funds and
the net asset value of each class of shares of the Acquired Funds shall be
determined as of the applicable Valuation Time with respect to each Acquired
Fund specified in Article III.
1.05 The net asset value of each class of shares of each Acquiring Fund
shall be computed in the manner set forth in such Acquiring Fund's then current
prospectuses under the Securities Act of 1933, as amended (the '1933 Act'). The
net value of the Acquired Fund Assets to be transferred by the Conestoga
portfolios shall be computed by Conestoga and shall be subject to adjustment by
the amount, if any, agreed to by CoreFunds and Conestoga. In determining the
value of the securities transferred by the Acquired Funds to the Acquiring
Funds, each security shall be priced in accordance with the policies and
procedures of CoreFunds described in its then current prospectuses and
statements of additional information and adopted by CoreFunds' Board of
Directors, which are and shall be consistent with the policies now in effect for
Conestoga. For such purposes, price quotations and the security characteristics
relating to establishing such quotations shall be determined by CoreFunds,
provided that such determination shall be subject to the approval of Conestoga.
A-3
<PAGE>
The value of the Acquired Fund Assets of the Conestoga Cash Management
Fund, Tax-Free Fund and U.S. Treasury Securities Fund (each, a 'Conestoga Money
Market Fund') and the value of the shares of the corresponding Acquiring Funds
for purposes of sales and redemptions shall be based on the amortized cost
valuation procedures that have been adopted by the Board of Trustees of
Conestoga and the Board of Directors of CoreFunds, respectively. Any provision
in this Agreement to the contrary notwithstanding, if the difference between the
per share net asset values of a Conestoga Money Market Fund and its
corresponding Acquiring Fund equals or exceeds $.0025 at the applicable
Valuation Time, as computed by using such market values in accordance with the
policies and procedures established by CoreFunds (or as otherwise mutually
determined by the Board of Trustees of Conestoga and the Board of Directors of
CoreFunds), either the Board of Trustees of Conestoga or the Board of Directors
of CoreFunds shall have the right to postpone the applicable Valuation Time and
the applicable Effective Time of the Reorganization with respect to such
Conestoga Money Market Fund until such time as the per share difference is less
than $.0025.
II. Liquidating Distributions and Termination of Conestoga. Immediately
after the Effective Time of the Reorganization with respect to each Acquired
Fund, such Acquired Fund shall distribute in complete liquidation pro rata to
the record holders of each class of its shares at the applicable Effective Time
of the Reorganization the shares of the class of the Acquiring Fund identified
in Section 1.02 to be received by the record holders of such class of such
Acquired Fund. In addition, each shareholder of record of an Acquired Fund shall
have the right to receive any unpaid dividends or other distributions which were
declared before the applicable Effective Time of the Reorganization with respect
to the shares of an Acquired Fund that are held by the shareholder at the
applicable Effective Time of the Reorganization. In accordance with instructions
it receives from Conestoga, CoreFunds shall record on its books the ownership of
each class of shares of each Acquiring Fund by the record holders of the class
of shares of the Acquired Fund identified in Section 1.02. All of the issued and
outstanding shares of each class of each Acquired Fund shall be redeemed and
canceled on the books of Conestoga at the Effective Time of the Reorganization
of such Acquired Fund and shall thereafter represent only the right to receive
the class of shares of the Acquiring Fund identified in Section 1.02, and the
Acquired Fund's transfer books shall be closed permanently. As soon as
practicable after the Effective Time of the Reorganization with respect to the
Continuing Funds, Conestoga shall make all filings and take all other steps as
shall be necessary and proper to effect its complete dissolution, and shall file
an application pursuant to Section 8(f) of the 1940 Act for an order declaring
that it has ceased to be an investment company and any and all documents that
may be necessary to terminate its existence under state law. After the Effective
Time of the Reorganization with respect to the Continuing Funds, Conestoga shall
not conduct any business except in connection with its liquidation, dissolution,
and deregistration.
III. Valuation Times. Subject to Section 1.05 hereof, (a) the Valuation
Time for the Reorganization with respect to the Reorganizing Funds shall be 4:00
P.M., Eastern Time, on such date as may be agreed in writing by the duly
authorized officers of both parties hereto, which date shall not be later than
the thirty-first calendar day following the consummation of the merger between
CoreStates Financial Corp and Meridian Bancorp, Inc. described in an Agreement
and Plan of Merger dated October 10, 1995 (the 'Bank Holding Company Merger'),
and (b) the Valuation Time for the Reorganization with respect to the Continuing
Funds shall be 4:00 p.m., Eastern Time, on such date as may be agreed in writing
by the duly authorized officers of both parties hereto, which date shall be not
less than seven calendar days following the Valuation Time for the
Reorganization with respect to the Reorganizing Funds.
IV. Certain Representations, Warranties and Agreements of Conestoga.
Conestoga, on behalf of itself and each Acquired Fund, represents and warrants
to, and agrees with, CoreFunds as follows:
(a) It is a Massachusetts business trust duly created pursuant to its Agreement
and Declaration of Trust for the purpose of acting as a management
investment company under the 1940 Act and is validly existing under the laws
of, and duly authorized to transact business in, the Commonwealth of
Massachusetts. It is registered with the
A-4
<PAGE>
Securities and Exchange Commission (the 'SEC') as an open-end management
investment company under the 1940 Act and such registration is in full force
and effect.
(b) It has power to own all of its properties and assets and, subject to the
approvals of shareholders referred to herein, to carry out and consummate
the transactions contemplated hereby, and has all necessary federal, state
and local authorizations to carry on its business as now being conducted and
to consummate the transactions contemplated by this Agreement.
(c) This Agreement has been duly authorized, executed and delivered by
Conestoga, and represents Conestoga's valid and binding contract,
enforceable in accordance with its terms, subject as to enforcement to
bankruptcy, insolvency, reorganization, arrangement, moratorium, and other
similar laws of general applicability relating to or affecting creditors'
rights and to general principles of equity. The execution and delivery of
this Agreement does not and will not, and the consummation of the
transactions contemplated by this Agreement will not, violate Conestoga's
Agreement and Declaration of Trust or Code of Regulations or any agreement
or arrangement to which it is a party or by which it is bound.
(d) Each Acquired Fund has elected to qualify and has qualified as a regulated
investment company under Part I of Subchapter M of the Code, as of and since
its first taxable year; has been a regulated investment company under such
Part of the Code at all times since the end of its first taxable year when
it so qualified; and qualifies and shall continue to qualify as a regulated
investment company until the Effective Time of the Reorganization with
respect to such Acquired Fund.
(e) All federal, state, local and foreign income, profits, franchise, sales,
withholding, customs, transfer and other taxes, including interest,
additions to tax and penalties (collectively, 'Taxes') relating to the
Acquired Fund Assets due or properly shown to be due on any return filed by
any Acquired Fund with respect to taxable periods ending on or prior to, and
the portion of any interim period up to, the date hereof have been fully and
timely paid or provided for; and there are no levies, liens, or other
encumbrances relating to Taxes existing, threatened or pending with respect
to the Acquired Fund Assets.
(f) The financial statements of Conestoga's U.S. Treasury Securities Fund, Cash
Management Fund, Tax-Free Fund, Intermediate Income Fund, Bond Fund,
Equity Fund, Special Equity Fund, and Pennsylvania Tax-Free Bond Fund for
the fiscal year ended October 31, 1995, and the financial statements of
Conestoga's Balanced Fund, Short-Term Income Fund, and International Equity
Fund for their respective fiscal periods ended October 31, 1995, examined by
Coopers & Lybrand L.L.P., copies of which have been previously furnished to
CoreFunds, present fairly the financial position of each Acquired Fund as of
October 31, 1995 and the results of its operations for the year or period
then ending, in conformity with generally accepted accounting principles.
(g) Prior to the Valuation Time applicable to the Reorganizing Funds, each of
the Reorganizing Funds shall have declared a dividend or dividends, with a
record date and ex-dividend date prior to such Valuation Time, which,
together with all previous dividends, shall have the effect of distributing
to its shareholders all of its net investment company income, if any, for
the taxable periods or years ended on or before October 31, 1995 and for the
period from said date to and including the Effective Time of the
Reorganization applicable to the Reorganizing Funds (computed without regard
to any deduction for dividends paid), and all of its net capital gain, if
any, realized in taxable periods or years ended on or before October 31,
1995 and in the period from said date to and including the Effective Time of
the Reorganization applicable to the Reorganizing Funds.
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(h) At both the Valuation Time and the Effective Time of the Reorganization with
respect to each Acquired Fund, there shall be no known liabilities of such
Acquired Fund, whether accrued, absolute, contingent or otherwise, not
reflected in the net asset values per share of its outstanding classes of
shares.
(i) There are no legal, administrative or other proceedings pending or, to
Conestoga's knowledge threatened, against Conestoga or an Acquired Fund
which could result in liability on the part of Conestoga or an Acquired
Fund.
(j) Subject to the approvals of shareholders referred to herein, at both the
Valuation Time and the Effective Time of the Reorganization with respect to
each Acquired Fund, it shall have full right, power and authority to sell,
assign, transfer and deliver the Acquired Fund Assets of such Acquired Fund
and, upon delivery and payment for the Acquired Fund Assets as contemplated
herein, an Acquiring Fund shall acquire good and marketable title thereto,
free and clear of all liens and encumbrances, and subject to no restrictions
on the ownership or transfer thereof (except as imposed by federal or state
securities laws).
(k) No consent, approval, authorization or order of any court or governmental
authority is required for the consummation by Conestoga of the transactions
contemplated by this Agreement, except such as may be required under the
1933 Act, the Securities Exchange Act of 1934, as amended ('1934 Act'), the
1940 Act, the rules and regulations under those Acts, and state securities
laws.
(l) Insofar as the following relate to Conestoga, the registration statement
filed by CoreFunds on Form N-14 relating to the shares of certain Acquiring
Funds that will be registered with the SEC pursuant to this Agreement,
which, without limitation, shall include a proxy statement of Conestoga and
the prospectuses of CoreFunds with respect to the transactions contemplated
by this Agreement, and any supplement or amendment thereto or to the
documents contained or incorporated therein by reference (the 'N-14
Registration Statement'), on the effective date of the N-14 Registration
Statement, at the time of any shareholders' meeting referred to herein and
at each Effective Time of the Reorganization: (i) shall comply in all
material respects with the provisions of the 1933 Act, the 1934 Act and the
1940 Act, the rules and regulations thereunder, and state securities laws,
and (ii) shall not contain any untrue statement of a material fact or omit
to state a material fact required to be stated therein or necessary to make
the statements therein not misleading.
(m) All of the issued and outstanding shares of each class of each Acquired Fund
have been duly and validly issued, are fully paid and non-assessable, and
were offered for sale and sold in conformity with all applicable federal and
state securities laws, and no shareholder of an Acquired Fund has any
preemptive right of subscription or purchase in respect of such shares.
(n) Conestoga shall not sell or otherwise dispose of any shares of an Acquiring
Fund to be received in the transactions contemplated herein, except in
distribution to its shareholders as contemplated herein.
V. Certain Representations, Warranties and Agreements of CoreFunds.
CoreFunds, on behalf of itself and each Acquiring Fund, represents and warrants
to, and agrees with, Conestoga as follows:
(a) It is a Maryland corporation duly organized and validly existing under the
laws of the State of Maryland. It is registered with the SEC as an open-end
management investment company under the 1940 Act and such registration is in
full force and effect.
(b) It has power to own all of its properties and assets and to carry out and
consummate the transactions contemplated herein, and has all necessary
federal, state and local authorizations to carry on its business as now
being conducted and to consummate the transactions contemplated by this
Agreement.
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(c) This Agreement has been duly authorized, executed and delivered by
CoreFunds, and represents CoreFunds' valid and binding contract, enforceable
in accordance with its terms, subject as to enforcement to bankruptcy,
insolvency, reorganization, arrangement, moratorium, and other similar laws
of general applicability relating to or affecting creditors' rights and to
general principles of equity. The execution and delivery of this Agreement
did not, and the consummation of the transactions contemplated by this
Agreement will not, violate CoreFunds' Articles of Incorporation or By-laws
or any agreement or arrangement to which it is a party or by which it is
bound.
(d) Each Acquiring Fund has elected or will elect to qualify, and each of the
first eight Acquiring Funds listed in Section 1.02 has qualified, as a
regulated investment company under Part I of Subchapter M of the Code, as of
and since its first taxable year; each of the first eight Acquiring Funds
listed in Section 1.02 has been a regulated investment company under such
Part of the Code at all times since the end of its first taxable year when
it so qualified and intends to continue to qualify as a regulated investment
company.
(e) The financial statements of each of the first eight Acquiring Funds listed
in Section 1.02 for its fiscal year ended June 30, 1995 examined by Ernst &
Young LLP, and for the six-month period ended December 31, 1995, copies of
which have been previously furnished to Conestoga, present fairly the
financial position of each such Acquiring Fund as of the dates indicated and
the results of its operations for the year and period ended as of such
dates, in conformity with generally accepted accounting principles.
(f) At both the Valuation Time and the Effective Time of the Reorganization with
respect to each Acquiring Fund, there shall be no known liabilities of such
Acquiring Fund, whether accrued, absolute, contingent or otherwise, not
reflected in the net asset values per share of its outstanding classes to be
issued pursuant to this Agreement.
(g) There are no legal, administrative or other proceedings pending or, to its
knowledge, threatened against CoreFunds or an Acquiring Fund which could
result in liability on the part of CoreFunds or an Acquiring Fund.
(h) No consent, approval, authorization or order of any court or governmental
authority is required for the consummation by CoreFunds of the transactions
contemplated by this Agreement, except such as may be required under the
1933 Act, the 1934 Act, the 1940 Act, the rules and regulations under those
Acts, and state securities laws.
(i) Insofar as the following relate to CoreFunds, the N-14 Registration
Statement on its effective date, at the time of any shareholders' meetings
referred to herein and at each Effective Time of the Reorganization: (i)
shall comply in all material respects with the provisions of the 1933 Act,
the 1934 Act and the 1940 Act, the rules and regulations thereunder, and
state securities laws, and (ii) shall not contain any untrue statement of a
material fact or omit to state a material fact required to be stated therein
or necessary to make the statements therein not misleading.
(j) The shares of each class of each Acquiring Fund to be issued and delivered
to an Acquired Fund for the account of record holders of shares of an
Acquired Fund, pursuant to the terms hereof, shall have been duly authorized
as of the Effective Time of the Reorganization application to such Acquiring
Fund and, when so issued and delivered, shall be registered under the 1933
Act and under applicable state securities laws, duly and validly issued,
fully paid and non-assessable, and no shareholder of CoreFunds shall have
any preemptive right of subscription or purchase in respect thereto.
VI. Shareholder Action on Behalf of the Acquired Funds.
6.01 As soon as practicable after the effective date of the N-14
Registration Statement, but in any event prior to the Effective Time of the
Reorganization applicable to the Reorganizing Funds and as a condition to the
Reorganization, the Board of Trustees of Conestoga shall call, and Conestoga
shall
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<PAGE>
hold, a meeting of the shareholders of the Acquired Funds for the purpose of
considering and voting upon:
(a) Approval of this Agreement and the transactions contemplated hereby,
including, without limitation:
(i) The transfer of the Acquired Fund Assets belonging to each Acquired Fund to
an Acquiring Fund, and the assumption by such Acquiring Fund of the Acquired
Fund Liabilities of such Acquired Fund, in exchange for a class or classes
of shares of an Acquiring Fund, as set forth in Section 1.02.
(ii) The liquidation of each Acquired Fund through the distribution to its
record holders of shares of the class or classes of shares of an Acquiring
Fund as described in this Agreement.
(b) Approval of interim investment advisory and/or sub-advisory agreements which
would be effective with respect to each Acquired Fund for the period from
the Bank Holding Company Merger until the Effective Time of the
Reorganization with respect to such Acquired Fund.
(c) Such other matters as may be determined by the Boards of Trustees or
authorized officers of the parties.
6.02 Approval of this Reorganization Agreement by the shareholders of the
Acquired Funds shall constitute the waiver of the application of any fundamental
policy of such Acquired Funds that might be deemed to prevent them from taking
the actions necessary to effectuate the Reorganization as described, and such
policies, if any, shall be deemed to have been amended accordingly.
VII. N-14 Registration Statement and Proxy Solicitation Materials.
CoreFunds shall file the N-14 Registration Statement under the 1933 Act, and
Conestoga shall file the combined prospectus/proxy statement contained therein
under the 1934 Act and 1940 Act proxy rules, with the SEC as promptly as
practicable. Each of CoreFunds and Conestoga has cooperated and shall continue
to cooperate with the other, and has furnished and shall continue to furnish the
other with the information relating to itself that is required by the 1933 Act,
the 1934 Act, the 1940 Act, the rules and regulations under each of those Acts
and state securities laws, to be included in the N-14 Registration Statement.
VIII. Effective Times of the Reorganization. Delivery of the Acquired Fund
Assets of each Acquired Fund and the shares of the classes of its Acquiring Fund
to be issued pursuant to Article I and the liquidation of each Acquired Fund
pursuant to Article II shall occur at the opening of business on the next
business day following the Valuation Time applicable to such Acquired Fund, or
on such other date, and at such place and time and date, as may be determined by
the President or any Vice President of each party hereto. The respective date
and time at which such actions are taken with respect to an Acquired Fund are
referred to herein as the 'Effective Time of the Reorganization.' To the extent
any Acquired Fund Assets are, for any reason, not transferred at the applicable
Effective Time of the Reorganization, Conestoga shall cause such Acquired Fund
Assets to be transferred in accordance with this Agreement at the earliest
practicable date thereafter.
IX. CoreFunds Conditions. The obligations of CoreFunds hereunder with
respect to each Acquired Fund shall be subject to the following conditions
precedent:
(a) This Agreement and the transactions contemplated by this Agreement shall
have been approved by the shareholders of such Acquired Fund, in the manner
required by law.
(b) Conestoga shall have duly executed and delivered to CoreFunds such bills of
sale, assignments, certificates and other instruments of transfer ('Transfer
Documents') as may be necessary or desirable to transfer all right, title
and interest of Conestoga and such Acquired Fund in and to the Acquired Fund
Assets of such Acquired Fund. The Acquired Fund Assets shall be accompanied
by all necessary state stock transfer stamps or cash for the appropriate
purchase price therefor.
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<PAGE>
(c) All representations and warranties of Conestoga made in this Agreement shall
be true and correct in all material respects as if made at and as of each
Valuation Time and each Effective Time of the Reorganization. As of the
Valuation Time and the Effective Time of the Reorganization applicable to
each Acquired Fund, there shall have been no material adverse change in the
financial position of such Acquired Fund since October 31, 1995 other than
those changes incurred in the ordinary course of business as an investment
company. No action, suit or other proceeding shall be threatened or pending
before any court or governmental agency in which it is sought to restrain or
prohibit, or obtain damages or other relief in connection with, this
Agreement or the transactions contemplated herein.
(d) CoreFunds shall have received an opinion of Drinker Biddle & Reath addressed
to CoreFunds in form reasonably satisfactory to it and dated the Effective
Time of the Reorganization applicable to each Acquired Fund, substantially
to the effect that: (i) Conestoga is a Massachusetts business trust duly
organized and validly existing under the laws of the Commonwealth of
Massachusetts; (ii) the shares of such Acquired Fund outstanding at such
time are duly authorized, validly issued, fully paid and non-assessable by
such Acquired Fund, and to such counsel's knowledge, no shareholder of such
Acquired Fund has any option, warrant or pre-emptive right to subscription
or purchase in respect thereof; (iii) this Agreement and the Transfer
Documents have been duly authorized, executed and delivered by Conestoga and
represent legal, valid and binding contracts, enforceable in accordance with
their terms, subject to the effect of bankruptcy, insolvency, moratorium,
fraudulent conveyance and similar laws relating to or affecting creditors'
rights generally and court decisions with respect thereto, and such counsel
shall not be required to express an opinion with respect to the application
of equitable principles in any proceeding, whether at law or in equity, or
with respect to the provisions of this Agreement intended to limit liability
for particular matters to an Acquired Fund and its assets; (iv) the
execution and delivery of this Agreement did not, and the consummation of
the transactions contemplated by this Agreement will not, violate the
Agreement and Declaration of Trust or Code of Regulations of Conestoga or
any material agreement known to such counsel to which Conestoga is a party
or by which Conestoga is bound; and (v) to such counsel's knowledge, no
consent, approval, authorization or order of any court or governmental
authority is required for the consummation by Conestoga of the transactions
contemplated by this Agreement, except such as have been obtained under the
1933 Act, the 1934 Act, the 1940 Act, the rules and regulations under those
Acts and such as may be required under the state securities laws. Such
opinion may rely on the opinion of other counsel to the extent set forth in
such opinion, provided such other counsel is reasonably acceptable to
CoreFunds.
(e) CoreFunds shall have received an opinion of Morgan, Lewis & Bockius LLP,
addressed to CoreFunds and Conestoga in form reasonably satisfactory to them
and dated the Effective Time of the Reorganization applicable to each
Acquired Fund, substantially to the effect that for federal income tax
purposes (i) the transfers of all of the Acquired Fund Assets hereunder, and
the assumption by its Acquiring Fund of Acquired Fund Liabilities, in
exchange for shares of each class of such Acquiring Fund, and the
distribution of said shares to the shareholders of such Acquired Fund, as
provided in this Agreement, will each constitute a reorganization within the
meaning of Section 368(a)(1)(C), 368(a)(1)(D) or 368(a)(1)(F) of the Code
and with respect to each reorganization, the Acquired Fund and the Acquiring
Fund will each be considered 'a party to a reorganization' within the
meaning of Section 368(b) of the Code; (ii) in accordance with Sections
361(a), 361(c)(1) and 357(a) of the Code, no gain or loss will be recognized
by such Acquired Fund as a result of such transactions; (iii) in accordance
with Section 1032 of the Code, no gain or loss will be recognized by an
Acquiring Fund as a result of such transactions; (iv) in accordance with
Section 354(a)(1) of the Code, no gain or loss will be recognized by the
shareholders of such Acquired Fund on the distribution to them by such
Acquired Fund of
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<PAGE>
shares of any class of an Acquiring Fund in exchange for their shares of the
corresponding class of the Acquired Fund; (v) in accordance with Section
358(a)(1) of the Code, the aggregate basis of Acquiring Fund shares received
by each shareholder of any class of an Acquired Fund will be the same as the
aggregate basis of the shareholder's Acquired Fund shares immediately prior
to the transactions; (vi) in accordance with Section 362(b) of the Code, the
basis of the Acquired Fund Assets to any Acquiring Fund will be the same as
the basis of such Acquired Fund Assets in the hands of the corresponding
Acquired Fund immediately prior to the exchange; (vii) in accordance with
Section 1223 of the Code, a shareholder's holding period for Acquiring Fund
shares will be determined by including the period for which the shareholder
held the shares of an Acquired Fund exchanged therefor, provided that the
shareholder held such shares of an Acquired Fund as a capital asset; and
(viii) in accordance with Section 1223 of the Code, the holding period of an
Acquiring Fund with respect to the Acquired Fund Assets will include the
period for which such Acquired Fund Assets were held by an Acquired Fund.
(f) The SEC shall not have issued any unfavorable advisory report under Section
25(b) of the 1940 Act nor instituted any proceeding seeking to enjoin
consummation of the transactions contemplated by this Agreement under
Section 25(c) of the 1940 Act.
(g) The N-14 Registration Statement shall have become effective under the 1933
Act and no stop order suspending such effectiveness shall have been
instituted or, to the knowledge of CoreFunds, contemplated by the SEC and
the parties shall have received all permits and other authorizations
necessary under state securities laws to consummate the transactions
contemplated by this Agreement.
(h) The President or a Vice President of Conestoga shall have certified that
Conestoga has performed and complied in all material respects with each of
its agreements and covenants required by this Agreement to be performed or
complied with by it prior to or at each Valuation Time and each Effective
Time of the Reorganization.
(i) Conestoga shall have delivered or caused to be delivered to CoreFunds each
account, book, record or other document of Conestoga applicable to such
Acquired Fund which is required to be maintained by Section 31(a) of the
1940 Act and Rules 31a-1 to 31a-3 thereunder (regardless of what person
possesses the same). Conestoga has instructed its service contractors to
provide CoreFunds upon request with access to and copies of all documents
belonging to Conestoga.
(j) The Bank Holding Company Merger shall have been consummated.
(k) With respect to the Reorganization of the Continuing Funds, the
Reorganization of all of the Reorganizing Funds shall have been consummated.
X. Conestoga Conditions. The obligations of Conestoga hereunder with
respect to each Acquired Fund shall be subject to the following conditions
precedent:
(a) This Agreement and the transactions contemplated by this Agreement shall
have been approved by the shareholders of such Acquired Fund, in the manner
required by law.
(b) All representations and warranties of CoreFunds made in this Agreement shall
be true and correct in all material respects as if made at and as of each
Valuation Time and each Effective Time of the Reorganization. As of the
Valuation Time and the Effective Time of the Reorganization applicable to
each Acquired Fund, there shall have been no material adverse change in the
financial condition of its Acquiring Fund since June 30, 1995 other than
those changes incurred in the ordinary course of business as an investment
company. No action, suit or other proceeding shall be threatened or pending
before any court or governmental agency in which it is sought to restrain or
prohibit, or obtain damages or other relief in connection with, this
Agreement or the transactions contemplated herein.
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<PAGE>
(c) Conestoga shall have received an opinion of Morgan, Lewis & Bockius LLP,
addressed to Conestoga in form reasonably satisfactory to it and dated the
Effective Time of the Reorganization applicable to each Acquired Fund,
substantially to the effect that: (i) CoreFunds is a Maryland corporation
duly organized and validly existing under the laws of the State of Maryland
and is qualified to do business and in good standing in each state in which
such qualification is required; (ii) the shares of each class of each
Acquiring Fund to be delivered at such time to an Acquired Fund as provided
for by this Agreement are duly authorized and upon delivery will be validly
issued, fully paid and non-assessable by such Acquiring Fund and to such
counsel's knowledge, no shareholder of an Acquiring Fund has any option,
warrant or pre-emptive right to subscription or purchase in respect thereof;
(iii) this Agreement has been duly authorized, executed and delivered by
CoreFunds and represents a legal, valid and binding contract, enforceable in
accordance with its terms, subject to the effect of bankruptcy, insolvency,
moratorium, fraudulent conveyance and similar laws relating to or affecting
creditors' rights generally and court decisions with respect thereto, and
such counsel shall not be required to express an opinion with respect to the
application of equitable principles in any proceeding, whether at law or in
equity, or with respect to the provisions of this Agreement intended to
limit liability for particular matters to an Acquiring Fund and its assets;
(iv) the execution and delivery of this Agreement did not, and the
consummation of the transactions contemplated by this Agreement will not,
violate the Articles of Incorporation or By-laws of CoreFunds, or any
material agreement known to such counsel to which CoreFunds is a party or by
which CoreFunds is bound; and (v) to such counsel's knowledge no consent,
approval, authorization or order of any court or governmental authority is
required for the consummation by CoreFunds of the transactions contemplated
by this Agreement, except such as have been obtained under the 1933 Act, the
1934 Act, the 1940 Act, the rules and regulations under those Acts and such
as may be required under the state securities laws. Such opinion may rely on
the opinion of other counsel to the extent set forth in such opinion,
provided such other counsel is reasonably acceptable to Conestoga.
(d) Conestoga shall have received an opinion of Morgan, Lewis & Bockius LLP,
addressed to CoreFunds and Conestoga in the form reasonably satisfactory to
them and dated the Effective Time of the Reorganization applicable to each
Acquired Fund, with respect to the matters specified in Section IX(e).
(e) The N-14 Registration Statement shall have become effective under the 1933
Act and no stop order suspending such effectiveness shall have been
instituted, or to the knowledge of CoreFunds, contemplated by the SEC and
the parties shall have received all permits and other authorizations
necessary under state securities laws to consummate the transactions
contemplated by this Agreement.
(f) The SEC shall not have issued any unfavorable advisory report under Section
25(b) of the 1940 Act nor instituted any proceeding seeking to enjoin
consummation of the transactions contemplated by this Agreement under
Section 25(c) of the 1940 Act.
(g) The President or Vice President of CoreFunds shall have certified that
CoreFunds has performed and complied in all material respects with each of
its agreements and covenants required by this Agreement to be performed or
complied with by it prior to or at each Valuation Time and each Effective
Time of the Reorganization.
(h) The Bank Holding Company Merger shall have been consummated.
(i) With respect to the Reorganization of the Continuing Funds, the
Reorganization of all of the Reorganizing Funds shall have been consummated.
XI. Tax Documents. Conestoga shall deliver to CoreFunds at each Effective
Time of the Reorganization confirmations or other adequate evidence as to the
adjusted tax basis of the Acquired Fund Assets then delivered to an Acquiring
Fund in accordance with the terms of this Agreement.
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XII. Finder's Fees. Each party represents and warrants to each of the other
parties hereto that there is no person who is entitled to any finder's or other
similar fee or commission arising out of the transactions contemplated by this
Agreement.
XIII. Announcements. Any announcements or similar publicity with respect to
this Agreement or the transactions contemplated herein shall be at such time and
in such manner as the parties shall agree; provided, that nothing herein shall
prevent any party upon notice to the other parties from making such public
announcements as such party's counsel may consider advisable in order to satisfy
the party's legal and contractual obligations in such regard.
XIV. Further Assurances. Subject to the terms and conditions herein
provided, each of the parties hereto shall use its best efforts to take, or
cause to be taken, such action, to execute and deliver, or cause to be executed
and delivered, such additional documents and instruments, and to do, or cause to
be done, all things necessary, proper or advisable under the provisions of this
Agreement and under applicable law to consummate and make effective the
transactions contemplated by this Agreement.
XV. Termination of Representations and Warranties. The representations and
warranties of the parties set forth in this Agreement shall terminate at the
Effective Time of the Reorganization of the Continuing Funds.
XVI. Termination of Agreement.
16.01 This Agreement may be terminated by a party at any time at or prior
to (i) the Effective Time of the Reorganization of the Reorganizing Funds, or
(ii) with respect to the Continuing Funds and the corresponding Acquiring Funds
at any time at or prior to the Effective Time of the Reorganization of the
Continuing Funds, by the Board of Directors of CoreFunds or the Board of
Trustees of Conestoga, as provided below:
(a) By CoreFunds if the conditions set forth in Article IX are not satisfied as
specified in said Section;
(b) By Conestoga if the conditions set forth in Article X are not satisfied as
specified in said Section;
(c) By the mutual consent of the parties.
16.02 If a party terminates this Agreement as to any investment portfolio
because one or more of its conditions precedent have not been fulfilled, or if
this Agreement is terminated by mutual consent, this Agreement will become null
and void without any liability of either party or any of their investment
portfolios to the other; provided, however, that if such termination is by
CoreFunds pursuant to Section 16.01(a) as a result of a breach by Conestoga of
any of its representations, warranties or covenants in this Agreement, or such
termination is by Conestoga pursuant to Section 16.01(b) as a result of a breach
by CoreFunds of any of its representations, warranties or covenants in this
Agreement, nothing herein shall affect the non-breaching party's right to
damages on account of such other party's breach.
XVII. Amendment and Waiver. At any time prior to or (to the fullest extent
permitted by law) after approval of this Agreement by the shareholders of
Conestoga, (a) the parties hereto may, by written agreement authorized by their
respective Boards of Directors or Trustees, as the case may be, or their
respective Presidents or any Vice Presidents, and with or without the approval
of their shareholders, amend any of the provisions of this Agreement, and (b)
either party may waive any breach by the other party or the failure to satisfy
any of the conditions to its obligations (such waiver to be in writing and
authorized by the President or Vice President of the waiving party with or
without the approval of such party's shareholders).
XVIII. Governing Law. This Agreement and the transactions contemplated
hereby shall be governed, construed and enforced in accordance with the laws of
the Commonwealth of Massachusetts, without giving effect to the conflicts of law
principles otherwise applicable therein.
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XIX. Successors and Assigns. This Agreement shall be binding upon the
respective successors and permitted assigns of the parties hereto. This
Agreement and the rights, obligations and liabilities hereunder may not be
assigned by either party without the consent of the other party.
XX. Beneficiaries. Nothing contained in this Agreement shall be deemed to
create rights in persons not parties hereto, other than the successors and
permitted assigns of the parties.
XXI. Conestoga Liability.
21.01 The names 'Conestoga Family of Funds' and 'Trustees of Conestoga
Family of Funds' refer respectively to the trust created and the trustees, as
trustees but not individually or personally, acting from time to time under a
Declaration of Trust dated August 1, 1989, which is hereby referred to and a
copy of which is on file at the office of the State Secretary of the
Commonwealth of Massachusetts and at the principal office of Conestoga. The
obligations of Conestoga entered into in the name or on behalf thereof by any of
the trustees, representatives or agents are made not individually, but in such
capacities, and are not binding upon any of the trustees, shareholders or
representatives of Conestoga personally, but bind only the trust property, and
all persons dealing with any portfolio of Conestoga must look solely to the
trust property belonging to such portfolio for the enforcement of any claims
against Conestoga.
21.02 Both parties specifically acknowledge and agree that any liability of
Conestoga under this Agreement with respect to an Acquired Fund, or in
connection with the transactions contemplated herein with respect to an Acquired
Fund, shall be discharged only out of the assets of that Acquired Fund and that
no other portfolio of Conestoga shall be liable with respect thereto.
XXII. Notices. All notices required or permitted herein shall be in writing
and shall be deemed to be properly given when delivered personally or by
telecopier to the party entitled to receive the notice or when sent by certified
or registered mail, postage prepaid, or delivered to a nationally recognized
overnight courier service, in each case properly addressed to the party entitled
to receive such notice at the address or telecopier number stated below or to
such other address or telecopier number as may hereafter be furnished in writing
by notice similarly given by one party to the other party hereto:
If to CoreFunds:
CoreFunds, Inc.
c/o David G. Lee, President
680 East Swedesford Road
Wayne, PA 19087-1658
Telecopier Number: (610) 254-1040
With a copy to:
James W. Jennings, Esq.
Morgan, Lewis & Bockius LLP
2000 One Logan Square
Philadelphia, PA 19103
Telecopier Number: (215) 963-5299
If to Conestoga:
Conestoga Family of Funds
c/o David G. Lee, President
680 East Swedesford Road
Wayne, PA 19087-1658
Telecopier Number: (610) 254-1040
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<PAGE>
With a copy to:
Henry S. Hilles, Jr., Esq.
Drinker Biddle & Reath
1345 Chestnut Street
Philadelphia, PA 19107
Telecopier Number: (215) 988-2757
XXIII. Expenses. Each party represents to the other that its expenses
incurred in connection with the Reorganization will be borne by one or both of
the parties to the Bank Holding Company Merger, provided, however, that (a)
CoreFunds shall bear any filing fees under the 1933 Act and state securities
laws in connection with its Individual Shares and Institutional Shares to be
distributed to shareholders of the Acquired Funds, and (b) Conestoga shall bear
any custody termination fees incurred by Conestoga as a result of effecting the
transactions contemplated by this Agreement.
XXIV. Entire Agreement. This Agreement embodies the entire agreement and
understanding of the parties hereto and supersedes any and all prior agreements,
arrangements and understandings relating to matters provided for herein.
XXV. Counterparts. This Agreement may be executed in any number of
counterparts, each of which, when executed and delivered shall be deemed to be
an original, but all of which together shall constitute one and the same
instrument.
IN WITNESS WHEREOF, the parties hereto have caused this instrument to be
executed by their duly authorized officers designated below as of the date first
written above.
COREFUNDS, INC.
ATTEST:
/s/SANDRA OECHSLIN By: /s/KEVIN P. ROBINS
---------------------------- ------------------------
Sandra Oechslin Kevin P. Robins
Vice President
CONESTOGA FAMILY OF FUNDS
ATTEST:
/s/PATRICIA ARIZIN By: /s/SANDRA K. ORLOW
---------------------------- ------------------------
Patricia Arizin Sandra K. Orlow
Vice President
A-14
<PAGE>
APPENDIX II
EXISTING COREFUNDS PORTFOLIOS MANAGEMENT DISCUSSION & ANALYSIS
The CoreFund Value Equity Fund, Series A, returned 17.29% for the 12-month
period ending June 30, 1995. While in absolute terms this was an acceptable
return, the S&P 500 returned 26.0% in the same timeframe.
For Series B shares from which a sales charge has been deducted, the return
for the period was 11.7%; for those without a sales load it was 17.0%.
The most significant economic event during the period was the series of
moves made by the Federal Reserve Board to tighten interest rates. With the
Fund's exposure to industrial issues that are more economically sensitive, the
Fed's actions negatively affected performance. Investors in the broad market
sold industrial issues and purchased so-called defensive issues in groups such
as pharmaceuticals, tobacco, and food and beverage, where earnings are less
dependent on economic activity. The Fund's exposure in these sectors is
underweighted compared to the broader market.
As the new fiscal year begins, we are optimistic that the industrial sector
will come back into favor. Even as the economy has slowed, industrial issues
have continued to display positive fundamentals and solid earnings. Productivity
enhancements, careful control of inventories and costs, and exposure to
still-healthy global economies have helped these companies maintain steady
results during boom/bust cycles. The interest rate decrease instituted by the
Fed at the beginning of the new fiscal year, combined with excellent company
fundamentals, should bring investors back to the sector.
The Fund has also benefitted from investment in financial issues such as
security brokerages, investment management firms, and mutual fund companies.
Specific investments have included Merrill Lynch, Charles Schwab, Salomon
Brothers, and Franklin Resources. As the 'graying of America' continues and more
government policies are instituted that reward investment, the long-term outlook
for financial issues remains strong.
Overall, we continue to maintain a constructive outlook for the value
equity market. The breadth of issues participating in the rally indicates that
excesses can be worked off individually, without damaging the fabric of an
overall market that is healthy and improving.
QUICK FUND FACTS -- VALUE EQUITY (6/30/95)
Inception Date: February 6, 1990
Portfolio Size: $34.71 million
Shares Outstanding: 2,432,599 (A&B combined)
<TABLE>
<CAPTION>
TOP FIVE HOLDINGS (AS OF JUNE 30, 1995) % OF FUND INVESTMENTS
- ------------------------------------------------------------------------------- -----------------------
<S> <C>
Salomon Inc.................................................................... 3.3%
Allied Signal Inc.............................................................. 3.1%
Sears Roebuck & Co............................................................. 3.1%
Mobil Corp..................................................................... 3.0%
Conrail Inc.................................................................... 3.0%
</TABLE>
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURN 1 1 YEAR 5 YEAR INCEPTION
- ------------------------------------------------------------------------------------ --------- ----------- -----------
<S> <C> <C> <C>
Series A............................................................................ 17.29% 9.21% 9.32%
Series B without Load............................................................... 16.96% 9.10% 9.22%
Series B with Load.................................................................. 11.73% 8.10% 8.29%
</TABLE>
B-1
<PAGE>
{GRAPHIC]
Data for chart to follow:
<TABLE>
<CAPTION>
COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT
<S> <C>
Value Equity (Series A) $16,111
Value Equity (Series B) $15,314
S&P 500 Index $19,293
</TABLE>
<TABLE>
<CAPTION>
Initial Investment Date 2/28/90 Jun 90 Jun 91 Jun 92 Jun 93 Jun 94 Jun 95
<S> <C> <C> <C> <C> <C> <C> <C>
CoreFund Value Equity Fund,
Class A $10,000 $10,369 $10,718 $11,788 $13,946 $13,736 $16,111
CoreFund Value Equity Fund,
Class B (Synthetic)
4.50% load $9,550 $9,902 $10,236 $11,258 $13,319 $13,094 $15,314
S&P 500 Composite Index $10,000 $10,909 $11,717 $13,289 $15,099 $15,312 $19,293
</TABLE>
1 For the period ended June 30, 1995. Past performance of the portfolio is
not predictive of future performance. Individual Series B shares were offered
beginning January 4, 1993. The performance shown for Value Equity Portfolio
Series B (synthetic) prior to that date is based on the performance of
Institutional Series A shares adjusted to reflect the maximum sales charge of
4.5% for the Series B shares. Series A shares of the Value Equity Portfolio
commenced operations on February 6, 1990.
INTERNATIONAL GROWTH FUND
The International Growth Fund, Series A shares, returned (0.21)% for the
year ended June 30, 1995. This compared favorably with the 0.1% increase of the
MSCI EAFE Index during the same period.
For Series B shares from which a sales charge has been deducted, the return
for the period was (4.95)%; for those without a load it was (0.48)%.
Despite continued growth in most of the world's major economies,
international stock markets have been affected by considerable currency
volatility. In December, the Mexican crisis caused investors to repatriate funds
that had been invested in many of the world's smaller or 'emerging' markets.
The International Growth Fund's largest single area of investment is Japan
(34%). This was the worst-performing major market in the period, falling by 28%.
A currency gain softened the damage for the U.S. investor, however. The Kobe
earthquake in February 1995 disrupted Japan's infrastructure and manufacturing
industries, and had a considerable, albeit short-term, impact on economic
activity.
The rise of the Yen is of greater long-term significance. This has made
Japan's exports less competitive, and encouraged a flood of imports. In turn,
this has put pressure on economic growth and corporate margins, and kept the
domestic investor away from the stock market. Although the Japanese financial
sector is hardly in the best of health, the manufacturing sector has suffered
the worst.
One bright spot has been the technology sector, in which the Fund has a
large position.
B-2
<PAGE>
This allowed the Fund to outperform the Tokyo Stock Exchange Index over the
12-month period.
Through most of the year, the Fund was partially hedged against weakness in
the Yen, through a forward sale of Yen for U.S. dollars. This hedge expired in
February, shortly before another sharp rise in the Yen (to Y80/US$). The hedge
was subsequently reinstated; currently, 28% of the Fund's Japanese assets are
protected.
Southeast Asia, which currently accounts for 17% of the Fund's portfolio,
was an unrewarding region for most of the year. In Hong Kong, Singapore and
Malaysia, where local currencies are linked to the U.S. dollar, stock markets
suffered at a time when U.S. interest rates were rising. However, there was a
strong recovery toward the end of the period, spurred by the strengthening U.S.
bond market. In Hong Kong (at 6% the Fund's largest position in the region), the
Index rose by 5%, despite concerns about Chinese politics and weakness in local
real estate prices.
In Western Europe, which currently accounts for 40% of the Fund's holdings,
the past 12 months was a period of economic recovery. The improvement was
largely led by exports, as high rates of unemployment in the region discouraged
local consumption. However, the strength of the Deutschemark in the first half
of 1995 created problems for export industries in Germany, where there is now
considerable pressure on corporate earnings.
International confidence in Latin America was dealt a heavy blow at the end
of 1994 by a series of political scandals and a mishandling of the Mexican
economy. This led to a 40% devaluation of the Peso and a collapse in the Mexican
stock market, as international capital, on which the Mexican economy relies so
heavily, was quickly repatriated. Stock markets in Brazil and Argentina suffered
a similar fate (somewhat unfairly, as the commitment to economic discipline
appears much stronger in those countries than in Mexico). Despite some recovery
toward the end of the period, indices in both countries remain well below their
December levels.
The Fund's position in the region had been reduced prior to the Mexican
crisis, and further sales were made thereafter. The Fund now has only 5% of its
portfolio in Latin America, with no holdings in Mexico.
QUICK FUND FACTS -- INTERNATIONAL GROWTH (6/30/95)
Inception Date: February 12, 1990
Portfolio Size: $112.78 million
Shares Outstanding: 9,180,295 (A&B combined)
<TABLE>
<CAPTION>
TOP FIVE HOLDINGS (AS OF JUNE 30, 1995) % OF FUND INVESTMENTS
- ------------------------------------------------------------------------------- -----------------------
<S> <C>
Rohm........................................................................... 1.8%
Hutchinson Whampoa............................................................. 1.7%
Swire Pacific 'A'.............................................................. 1.6%
Kyocera........................................................................ 1.6%
Mitsubishi Heavy Industries.................................................... 1.6%
</TABLE>
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURN 1 1 YEAR 5 YEAR INCEPTION
- ------------------------------------------------------------------------------------ ----------- ----------- -----------
<S> <C> <C> <C>
Series A............................................................................ (0.21)% 5.82% 7.24%
Series B without Load............................................................... (0.48)% 5.73% 7.15%
Series B with Load.................................................................. (4.95)% 4.75% 6.24%
</TABLE>
B-3
<PAGE>
Data for chart below:
<TABLE>
<CAPTION>
COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT
<S> <C>
International Growth Equity (Series A) $14,578
International Growth Equity (Series B) $13,861
MSCI EAFE Index $12,352
</TABLE>
<TABLE>
<CAPTION>
Initial Investment Date 2/28/90 Jun 90 Jun 91 Jun 92 Jun 93 Jun 94 Jun 95
<S> <C> <C> <C> <C> <C> <C> <C>
CoreFund International Growth
Equity Fund, Class A $10,000 $10,985 $10,688 $11,211 $12,563 $14,609 $14,578
CoreFund International Growth
Equity Fund, Class B
(Synthetic) 4.50% load $9,550 $10,491 $10,207 $10,707 $11,998 $13,927 $13,861
Morgan Stanley EAFE Index $10,000 $9,814 $8,690 $8,635 $10,385 $12,151 $12,352
</TABLE>
1 For the period ended June 30, 1995. Past performance of the portfolio is not
predictive of future performance. Individual Series B shares were offered
beginning January 4, 1993. The performance shown for International Growth
Portfolio Series B (synthetic) prior to that date is based on the performance of
Institutional Series A shares adjusted to reflect the maximum sales charge of
4.5% for the Series B shares. Series A shares of the International Growth
Portfolio commenced operations on February 12, 1990.
BALANCED FUND
Performance of Series A shares of the Balanced Fund improved significantly
during the year ended June 30, 1995, generating a 16.21% gain for the period.
This compared with a 26.01% return for the Standard & Poor's 500 Index, and a
10.37% return for the Lehman Brothers Intermediate Government/Corporate Bond
Index.
For Series B shares from which a sales charge has been deducted, the return
for the period was 10.58%; for those without a load it was 15.84%. The Balanced
Fund grew in asset size through June 30 to $63,436,000.
The Balanced Fund's equity holdings modestly underperformed a very strong
S&P Index during the period, rising 24.0%. Returns from the Fund's holdings in
the technology sector and from pharmaceutical issues matched or outperformed
those sectors in the broader market. Additionally, strong positions in the cable
television, entertainment and gaming industries more than offset weakness in the
Fund's underweighted holdings (relative to the broader market) in
interest-sensitive sectors.
The Fund's fixed-income holdings underperformed the fixed-income benchmark
during the 12-month period (9.2% vs. the Bond Index's 10.37%). The Fund's bond
holdings were overweighted in the two-years-or-less portion of the yield curve;
this market segment generated smaller returns than longer-dated securities. Our
defensive posture, which served the Fund well during the first six months of the
period, made it difficult to fully exploit the rapid and sharp rally in bond
prices during the final three months of the period.
B-4
<PAGE>
Cash levels in the Fund are fairly low, reflecting a fully invested
position in stocks and bonds. We anticipate continued volatility in the capital
markets, with an upward bias, during the second half of 1995. During periods of
weakness, we plan to seek opportunities to add high-coupon, high-quality bonds,
while intensifying our focus on attractively valued stocks of companies with
visible earnings growth and improving fundamentals.
<TABLE>
<CAPTION>
ASSET ALLOCATION (AS OF JUNE 30, 1995) % OF FUND INVESTMENTS
- ------------------------------------------------------------------------------- -----------------------
<S> <C>
Glenayre Technologies.......................................................... 1.3%
Comcast Corp CI.A.............................................................. 1.2%
Texas Utilities................................................................ 1.2%
Public Service Enter Group..................................................... 1.2%
Glaxo.......................................................................... 1.2%
</TABLE>
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURN 1 1 YEAR INCEPTION
- -------------------------------------------------------------------------------------------- --------- -----------
<S> <C> <C>
Series A.................................................................................... 16.21% 7.84%
Series B without Load....................................................................... 15.84% 6.91%
Series B with Load.......................................................................... 10.58% 4.80%
</TABLE>
[GRAPHIC]
Data for chart below:
<TABLE>
<CAPTION>
COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT
<S> <C>
Balanced (Series A) $11,980
Balanced (Series B) $11,373
S&P 500 Index $13,290
Lehman Govt/Corp Bond $11,475
</TABLE>
<TABLE>
<CAPTION>
Initial Investment Date 1/31/93 Jun 93 Jun 94 Jun 95
<S> <C> <C> <C> <C>
CoreFund Balanced Fund, Class A $10,000 $10,478 $10,309 $11,980
CoreFund Balanced Fund, Class B
(Synthetic) 4.50% load $9,550 $10,004 $9,818 $11,373
S&P 500 Composite Index $10,000 $10,400 $10,547 $13,290
Lehman Government/Corporate
Bond Index $10,000 $10,551 $10,397 $11,475
</TABLE>
1 For the period ended June 30, 1995. Past performance of the portfolio is not
predictive of future performance. Individual Series B shares were offered
beginning March 16, 1993. The performance shown for Balanced Portfolio
Series B (synthetic) prior to that date is based on the performance of
Institutional Series A shares adjusted to reflect the maximum sales charge of
4.5% for the Series B shares. Series A shares of the Balanced Portfolio
commenced operations on January 4, 1993.
INTERMEDIATE BOND FUND
The CoreFund Intermediate Bond Fund Series A shares returned 8.22% for the
year ended June 30, 1995. This compared with a 7.71% return for the Merrill
Lynch 1-3 year Treasury Index. The Fund's assets changed during the period from
$57,744,000 to $57,089,000.
B-5
<PAGE>
For Series B shares from which a sales charge has been deducted, the return
for the period was 3.13%; for those without a load it was 7.95%.
The extremely volatile bond market conditions that characterized the past
year were particularly evident in the intermediate part of the yield curve. This
is evidenced by the wide yield fluctuations in the two-year Treasury note, which
rose by 1.52% during the second half of 1994, and rallied by 1.89% in the first
half of 1995.
The Intermediate Bond Fund was able to outperform its benchmark during both
of these periods. In 1994, the Fund benefitted from a shorter average maturity,
large cash positions (as high as 18%), and large exposure to the mortgage-backed
securities market, which performed well on a relative basis in 1994.
In late 1994, the Fund began to extend its average maturity and reduce its
cash position, allowing it to benefit from the broad market rally. It further
benefitted from its large holdings of asset-backed securities (as much as 23% of
the portfolio), which performed extremely well in 1995. A shortage of
high-quality corporate bonds allowed spreads to narrow significantly, compared
to Treasuries of similar maturity.
The Fund has maintained its emphasis on credit quality, with over 85% of
its holdings being U.S. government and agency obligations or AAA-rated
securities. Recently, the Fund raised its cash position to 9.9%, due to the
relative unattractiveness of short-to-intermediate Treasuries, which currently
yield less than cash equivalents. We expect this to be a temporary holding.
Looking to the rest of 1995, we expect the Fed to follow through on market
expectations and reduce short-term rates by at least another 25 basis points. A
steepening of the yield curve should accompany this action, creating a more
friendly environment for mortgage-backed securities.
While a further drop in rates is possible, we would also expect volatility
in the fixed-income markets to subside. This would place more emphasis on yield
enhancement, rather than price movement, as a source of investor return.
QUICK FUND FACTS -- INTERMEDIATE BOND (6/30/95)
Inception Date: February 3, 1992
Portfolio Size: $57.09 million
Shares Outstanding: 5,800,877 (A&B combined)
Average Weighted Maturity: 3.5 years
QUALITY DIVERSIFICATION (AS OF JUNE 30, 1995)
<TABLE>
<CAPTION>
MATURITY IN YEARS % OF FUND INVESTMENTS
- ------------------------------------------------------------------------------- -----------------------
<S> <C>
AAA............................................................................ 66%
AA............................................................................. 4%
A.............................................................................. 10%
NR............................................................................. 20%
</TABLE>
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURN 1 1 YEAR INCEPTION
- --------------------------------------------------------------------------------------------- ----------- -----------
<S> <C> <C>
Series A..................................................................................... 8.22% 5.32%
Series B without Load........................................................................ 7.95% 5.12%
Series B with Load........................................................................... 3.13% 3.71%
</TABLE>
B-6
<PAGE>
[GRAPHIC]
Data for chart to follow:
<TABLE>
<CAPTION>
COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT
<S> <C>
Intermediate Bond (Series A) $11,930
Intermediate Bond (Series B) $11,337
Lehman Govt/Corp Bond Index $12,594
Merrill Lynch 1-3 Yr Treasury $11,997
</TABLE>
<TABLE>
<CAPTION>
Initial Investment Date 2/29/92 Jun 92 Jun 93 Jun 94 Jun 95
<S> <C> <C> <C> <C> <C>
CoreFund Intermediate-Term Bond Fund, Class A $10,000 $10,249 $11,059 $11,024 $11,930
CoreFund Intermediate-Term Bond Fund, Class B
(Synthetic) 4.50% load $9,550 $9,788 $10,561 $10,502 $11,337
Lehman Intermediate Government/Corporate
Bond Index $10,000 $10,355 $11,442 $11,412 $12,594
Merrill Lynch 1-3 Year Short-Term Treasury $10,000 $10,284 $10,961 $11,138 $11,997
</TABLE>
1 For the period ended June 30, 1995. Past performance of the portfolio is not
predictive of future performance. Individual Series B shares were offered
beginning January 4, 1993. The performance shown for Intermediate Bond Portfolio
Series B (synthetic) prior to that date is based on the performance of
Institutional Series A shares adjusted to reflect the maximum sales charge of
4.5% for the Series B shares. Series A shares of the Intermediate Bond Portfolio
commenced operations on February 3, 1992.
PA MUNICIPAL BOND FUND
The PA Municipal Bond Fund, Series A, provided its shareholders with a
return of 7.50% for the 12 months ended June 30, 1995. This compared to a return
for the Lehman PA State Bond Index of 8.84% in the same period. For Series B
shares from which a sales charge has been deducted, the return was 2.41%; for
those without a load, the return was 7.25%.
As of June 30, 1995, the 30-day yield was 5.39% and 4.90%, respectively,
for A and B shares. Assets in the Fund increased from $597,000 to $2,589,000.
The Fund's lower performance, relative to the benchmark index, was mainly
due to supply factors. During the third quarter of 1994, the Fund grew
dramatically. At that time, supply of municipal bonds was very light (down 40%
from 1993). This forced managers to carry unusually high cash levels due to a
lack of coupon income.
In the municipal bond market was driven mostly by ebbs and flows in demand
during the year. In late 1994, many tax-exempt mutual funds experienced large
withdrawals, because of the bond market's poor performance. As dealer
inventories swelled, demand for bonds decreased and prices fell. Then, when
Orange County, CA declared bankruptcy, investors temporarily fled the munibond
market, causing prices to drop further.
In the first half of 1995, yields on fixed-income securities fell, as the
economy showed signs of a slowdown. The municipal bond market has been unable to
attract investors, and has underperformed the Treasury market as a result.
Demand has been slowed by concern over enactment of a flat tax, the Orange
County default, and the strong appeal of the stock market.
B-7
<PAGE>
We believe the Fed will lower interest rates further if inflation remains
under control. In addition, the municipal bond market is technically positioned
to outperform the Treasury market in the coming months. We continue to seek
attractive opportunities to swap or make new purchases, as the market reacts to
these various factors.
QUICK FUND FACTS -- PA MUNICIPAL BOND (6/30/95)
Inception Date: May 16, 1994
Portfolio Size: $2.59 million
Shares Outstanding: 254,865 (A&B combined)
Average Weighted Maturity: 15.6 years
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURN 1 1 YEAR INCEPTION
- ---------------------------------------------------------------------------------------------- --------- -----------
<S> <C> <C>
Series A...................................................................................... 7.50% 7.65%
Series B without Load......................................................................... 7.25% 6.52%
Series B with Load............................................................................ 2.41% 2.25%
</TABLE>
[GRAPHIC]
Data for chart to follow:
<TABLE>
<CAPTION>
COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT
<S> <C>
Pennsylvania Municipal Bond (Series A) $10,656
Pennsylvania Municipal Bond (Series B) $10,232
Lehman Pennsylvania State Bond Index $10,958
</TABLE>
<TABLE>
<CAPTION>
Initial Investment Date 5/31/94 Jun 94 Jun 95
<S> <C> <C> <C>
CoreFund Pennsylvania Municipal Bond Fund, Class A $10,000 $9,913 $10,656
CoreFund Pennsylvania Municipal Bond Fund, Class B
4.50% load $9,550 $9,540 $10,232
Lehman Pennsylvania State Bond Index (MF) $10,000 $9,946 $10,958
</TABLE>
1 For the period ended June 30, 1995. Past performance of the portfolio is not
predictive of future performance. Series A and Series B shares were offered
beginning May 16, 1994. The maximum sales charge for Series B shares is 4.5%.
CASH RESERVE
QUICK FUND FACTS -- CASH RESERVE (6/30/95)
Inception Date: August 16, 1985
Portfolio Size: $527.92 million (A&B combined)
Average Weighted Maturity: 43 days
B-8
<PAGE>
Seven Day Yield: 5.75 Series A
5.48 Series B
The CoreFund Cash Reserve continued to offer strong returns to the
money-market investor during the period ending June 30, 1995. The annual total
return for Series A shares during that period was 5.15%. Series B shares, from
which a 12b-1 fee is deducted, had an annual return of 4.89%. These returns
compared favorably to that of the IBC/Donoghue's All-Taxable Money Fund Average,
which was 4.98% on June 30, 1995.
The Cash Reserve experienced modest growth in assets during the period. The
Fund totaled $527,924,000 on June 30, 1995, up from $516,724,000 a year earlier.
The average maturity of the portfolio had been as short as 28 days in the
first quarter of 1995. In a defensive move against declining rates, the average
maturity was then gradually extended. By June 30, it was 43 days.
Portfolio structure of the Cash Reserve has favored commercial paper, due
to the widening spread of returns relative to other investment vehicles. As
spreads fluctuate, we will routinely evaluate the structure, to add value to the
portfolio.
Interest rates appear to have peaked, and the negative tone of the forward
curve would indicate further reductions in rates. In coming months, we look for
further declines on the heels of the recent lowering of the Fed Funds rate. To
maintain yield, we will pursue an extension strategy with the Cash Reserve,
targeting an average weighted maturity of 50 to 55 days.
TREASURY RESERVE
QUICK FUND FACTS -- TREASURY RESERVE (6/30/95)
Inception Date: November 21, 1988
Portfolio Size: $500.82 million (A&B combined)
Average Weighted Maturity: 47 days
Seven Day Yield: 5.68 Series A
5.42 Series B
During a period when short-term interest rates increased 50 basis points,
the Treasury Reserve continued to deliver excellent investment results for the
period ending June 30, 1995. Series A shares returned an effective average
annual yield of 4.98%. The six-month total return for Series A shares was 5.58%.
Series B shares returned an effective average annual yield of 4.72%. The
six-month total return for Series B shares, from which a 12b-1 fee has been
deducted, was 5.32%.
Since June 30, 1994, the CoreFund Treasury Reserve increased in size by
1.7%. Assets as of June 30, 1995, totaled $500,818,000. The average maturity
increased by 13 days, to 47.
Although assets increased by $8 million, the increase in maturities was
mainly due to the purchase of longer-term Treasury securities. These securities
were purchased in order to hedge against the possibility of an easing in
short-term rates by the Federal Reserve Board.
As of this writing the Fed has lowered the funds rate by 25 basis points.
Economic data is expected to be mixed and inflation should remain under control
during the second half of 1995. Our near-term position remains biased towards a
gradual decline in short-term rates as long as inflationary pressures remain
subdued. For this reason we will continue to look for buying opportunities along
the treasury bill yield curve while keeping the average maturity in the 45 to 55
day range.
B-9
<PAGE>
TAX-FREE RESERVE
QUICK FUND FACTS -- TAX-FREE RESERVE (6/30/95)
Inception Date: April 16, 1991
Portfolio Size: $64.28 million (A&B combined)
Average Weighted Maturity: 34 days
Seven Day Yield: 3.56 Series A
3.30 Series B
The CoreFund Tax-Free Reserve, Series A shares, returned 3.12% for the year
ending June 30, 1995. This compared favorably to the 3.11% return provided by
Donoghue's Tax-Free Fund during the same period. For Series B shares of the
CoreFund Tax-Free Reserve, from which a 12b-1 fee has been deducted, the return
for the same period was 2.86%.
The average maturity of the Tax-Free Reserve was shortened from 44 to 34
days during the period, to take advantage of rising interest rates. Net assets
in the Tax-Free Reserve decreased 22% to $64,280,000 on June 30, 1995 from
$80,330,000 on December 31, 1994.
The decrease in assets was caused by the volatility of the tax-exempt money
market. Although rates increased steadily throughout the year, the spread
between taxables and non-taxables widened. The taxable equivalent yields on many
tax-exempt money market securities did not compare favorably to their taxable
counterparts. This prompted crossover buyers to move out of their tax-exempt
funds, and into taxable funds.
In coming months, management of the Fund will focus on extending the
average maturity, to pick up yield.
APPENDIX III
SHAREHOLDER TRANSACTIONS AND SERVICES
This Appendix compares the shareholder transactions and services that are
available in connection with: (1) Individual Shares and Institutional Shares of
the CoreFunds Portfolios, and (2) Retail and Institutional Shares of the
Conestoga Portfolios.
I. COREFUNDS PORTFOLIOS -- INDIVIDUAL SHARES AND INSTITUTIONAL
SHARES AND CORRESPONDING CONESTOGA PORTFOLIOS*
*(Includes Retail and Institutional Shares of the Conestoga Cash Management
Fund, Tax-Free Fund, U.S. Treasury Securities Fund (collectively, the 'Conestoga
Money Market Portfolios'); the Equity Fund, Special Equity Fund, Balanced Fund
and International Equity Fund (collectively, the 'Conestoga Equity Portfolios');
and the Bond Fund, Intermediate Income Fund, Pennsylvania Tax-Free Bond Fund and
Short-Term Income Fund (collectively, the 'Conestoga Fixed Income Portfolios').
A. SALES CHARGES AND EXEMPTIONS
CoreFunds Portfolios -- Individual and Institutional Shares
(a) Institutional Shares of each CoreFunds Portfolio are sold without a
sales charge.
(b) Individual Shares of the CoreFunds Equity and Fixed Income Portfolios
are sold with a 3.25% sales charge. Individual Shares of CoreFunds Money Market
Portfolios are sold without a sales charge.
(c) The CoreFunds Portfolios offer sales charge exemptions to the following
classes of shareholders: (a) employees (including members of their immediate
families and significant others) of CoreStates Financial Corp, Cashman, Farrell,
Martin Currie, Alpha Global and Investment Alternatives, Inc. and their
affiliates; (b) employees of the administrator and distributor; (c) Directors
C-1
<PAGE>
and officers of CoreFunds; (d) customers who purchase their shares under a
shareholder servicing arrangement between CoreFunds and CoreStates Financial
Corp or its affiliates, having met specific standards which CoreStates Financial
Corp or its affiliates will publish periodically and which qualify those
customers as customers of the Private Banking Groups or UniFinancial Groups of
those affiliates, (e) Individual Retirement Account rollovers from qualified
employee benefit plans, Keogh plans, and Simplified Employee Benefit Plans where
CoreStates Financial 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; and (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. 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 Individual Shares of a Portfolio 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 wishes to transfer
those shares to Individual Shares of a portfolio. Subsequent investments in the
Portfolios 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 charge also will not apply to exchanges
between CoreFunds Portfolios to the extent that a shareholder has credit for
previously paid sales charges on purchases of any of the CoreFunds Portfolios.
(d) The CoreFunds Portfolios also offer rights of accumulation and letter
of intent programs that can reduce the sales charge payable on Individual share
purchases.
CONESTOGA PORTFOLIOS -- RETAIL AND INSTITUTIONAL SHARES
(a) Institutional Shares of the Conestoga Portfolios are sold without a
sales charge.
(b) Retail Shares of the Conestoga Equity and Fixed Income Portfolios are
sold with a 2.0% maximum front-end sales charge. Retail Shares of the Money
Market Portfolios are sold without a sales charge.
(c) The following classes of Conestoga investors may purchase Retail Shares
of the Equity and Fixed Income Portfolios with no sales charge: (1) existing
shareholders of the applicable Portfolios upon the automatic reinvestment of
dividend and capital gain distributions; (2) Trustees of Conestoga and officers,
directors, employees and retired employees of the investment advisor and its
affiliates, SFS and its affiliates, and spouses and minor children of each of
the foregoing; (3) Investors for whom the investment advisor or one of its
affiliates (except a Conestoga IRA (as defined below)), acts in a fiduciary,
advisory, custodial, agency or similar capacity and for whom purchases are made
through such accounts; (4) Investors who purchase Retail Shares of the
applicable portfolio through a payroll deduction plan, a 401(k) plan, a 403(b)
plan or other similar retirement plans which by its terms permits purchases of
such shares; (5) Investors investing in a Conestoga Portfolio direct individual
retirement account (a 'Conestoga IRA') may make both initial and subsequent
purchases without a sales charge if the initial purchase is funded in whole or
in part by assets directly transferred to the Conestoga IRA from a distribution
made by a qualified retirement plan maintained through the asset management
affiliates of Meridian Bancorp, Inc.; (6) Employees (and their spouses and
children under the age of 21) of any broker-dealer with which the distributor
enters into a dealer agreement to sell shares of the Portfolios; and (7) Orders
placed on behalf of other investment companies distributed by the distributor or
any of its affiliates. The distributor may change or eliminate the foregoing
waivers at any time. The distributor may also periodically waive the sales
charge for all investors with respect to any portfolio.
C-2
<PAGE>
(d) The Conestoga Portfolios also offer rights of accumulation and letter
of intent programs that can reduce the sales charge payable on Retail Share
purchases.
B. PURCHASE POLICIES
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C>
COREFUNDS PORTFOLIOS -- INDIVIDUAL CONESTOGA PORTFOLIOS -- RETAIL AND
AND INSTITUTIONAL SHARES INSTITUTIONAL SHARES
- ----------------------------------------------------------------------------------------------------------------
Minimum Initial Investments $1,000,000 for initial purchases of $1,000 for initial purchases of
Institutional Shares and $500 for Retail and Institutional Shares
initial purchases of Individual ($100 for Auto Invest Plan). The
Shares (No minimum for Automatic minimum investment may be waived if
Investment Plan). share purchases are made in
connection with a qualified pension
plan, payroll savings plans or other
employer plans.
- ----------------------------------------------------------------------------------------------------------------
Minimum Subsequent Investments No minimum (except $50 for Automatic No minimum (except $50 for Auto
Investment Plan). Invest Plan).
- ----------------------------------------------------------------------------------------------------------------
Automatic Investment Plan Yes. Individual Shares may be Yes. Retail Shares may be purchased
purchased monthly through automatic on a monthly or quarterly basis
deductions from a shareholder's through automatic deductions from a
checking or savings account. There shareholder's checking or savings
is no minimum initial investment account with a $100 initial and $50
amount for Automatic Investment subsequent investment minimum. The
Plans, however the minimum minimum initial purchase amounts and
pre-authorized investment amount is minimum maintained balance
$50 per month per account. requirements may be waived for
purchases under the Auto Invest
Plan.
- ----------------------------------------------------------------------------------------------------------------
Purchase Methods Shares are sold by SFS directly and Shares are sold by SFS directly and
through broker/dealers having a through broker/dealers having a
dealer agreement with SFS and may dealer agreement with SFS Corp.; by
also be purchased through CoreStates mail, by telephone, by wire.
Securities by mail, by telephone, by
wire.
- ----------------------------------------------------------------------------------------------------------------
Payment methods By check (or other negotiable bank By check (or other negotiable bank
instrument or money order), by wire, instrument or money order), by wire,
by Automated Clearing House (ACH). by ACH.
- ----------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------
</TABLE>
A Conestoga Institutional shareholder who, at the Effective Time of the
Transaction, meets the Conestoga, but not the CoreFunds, minimum investment
requirement, will not be required to redeem the CoreFunds shares received in
connection with the Transaction, unless the balance in the shareholder's account
drops below the Conestoga minimum as a result of redemptions.
The CoreFunds Portfolios and Conestoga Portfolios each reserve the right to
reject any purchase order.
C-3
<PAGE>
C. REDEMPTION POLICIES
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C>
COREFUNDS PORTFOLIOS -- INDIVIDUAL CONESTOGA PORTFOLIOS -- RETAIL AND
AND INSTITUTIONAL SHARES INSTITUTIONAL SHARES
- ----------------------------------------------------------------------------------------------------------------
Redemption Methods By mail or telephone. By mail or telephone.
- ----------------------------------------------------------------------------------------------------------------
Payment Methods By check, by wire, by ACH. There is By check, by wire or ACH. There is a
a $10.00 charge for wiring $7 charge for wiring redemption
redemption proceeds. Payment is proceeds. Payment made within 7
normally made on the next business days, but Conestoga attempts to
day, but CoreFunds may take up to 7 honor requests for next day payment
days to honor redemption requests. of redemption proceeds.
- ----------------------------------------------------------------------------------------------------------------
Check Writing Privilege Yes, for CoreFunds Money Market Yes, for Conestoga Money Market
Portfolios ($250 minimum). Portfolios ($1,000 minimum).
- ----------------------------------------------------------------------------------------------------------------
Automatic Cash Withdrawal Plan Yes. ($5,000 minimum balance/$50 Yes. (No minimum balance
minimum per transaction.) required/$100 minimum per
transaction.)
- ----------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------
</TABLE>
A shareholder of record may be required to redeem Individual Shares in any
CoreFunds Portfolio if the balance in the shareholder's account in that
Portfolio drops below $500 as the result of a redemption request and the
shareholder does not increase the balance to at least $500 upon sixty days'
notice. The Conestoga Portfolios may redeem involuntarily, upon sixty days'
notice, Retail shares of a shareholder whose account decreases to a value of
less than $1,000 because of redemptions unless the shareholder makes an
additional investment during that period in an amount that will increase the
value of the account to at least $500. CoreFunds Portfolios and the Conestoga
Portfolios may also redeem shares involuntarily when appropriate in light of
their responsibilities under the 1940 Act, and may make payment for redemptions
in securities in lieu of cash.
D. SHARE EXCHANGES
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C>
COREFUNDS PORTFOLIOS -- INDIVIDUAL CONESTOGA PORTFOLIOS -- RETAIL AND
AND INSTITUTIONAL SHARES INSTITUTIONAL SHARES
- ----------------------------------------------------------------------------------------------------------------
By Mail Yes. Yes.
- ----------------------------------------------------------------------------------------------------------------
By Telephone Yes. Yes.
- ----------------------------------------------------------------------------------------------------------------
Minimum Inapplicable. $1,000 minimum.
- ----------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------
</TABLE>
CoreFunds Individual Shares may be exchanged for Individual Shares in any
other CoreFunds Portfolios. Shareholders who exchange into any CoreFunds
Portfolio that imposes a sales charge may be subject to such sales charge, if
applicable and not previously paid. With respect to the Conestoga Portfolios, a
shareholder who has paid a sales load on purchases of Retail Shares of an Equity
or Fixed Income Portfolio may exchange those Retail Shares for Retail Shares of
another Conestoga Equity or Fixed Income Portfolio at net asset value.
Shareholders of Retail Shares of the Conestoga Money Market Portfolios may
exchange these for Retail Shares of another Conestoga Money Market Portfolio at
net asset value. Shareholders who want to move investments in a Conestoga Money
Market Portfolio to a Conestoga Equity or Fixed Income Portfolio must follow the
redemption and purchase procedures for Retail Shares. If however, those Retail
Shares of a Conestoga Money Market Portfolio were acquired by a previous
exchange from Retail Shares of a Conestoga Equity or Fixed Income Portfolio,
these may be exchanged without payment of a sales charge. Exchanges are only
available in states where exchanges can lawfully be made from one Portfolio to
another, and must satisfy the requirements relating to the minimum initial
investment in a Portfolio. CoreFunds and Conestoga
C-4
<PAGE>
reserve the right to reject any telephone exchange request and to modify or
terminate exchange privileges at any time.
E. RESPONSIBILITY FOR TELEPHONE INSTRUCTIONS
The CoreFunds and Conestoga Portfolios, their administrators and their
distributors are not liable for any loss, liability, cost or expense for acting
upon telephone instructions that are reasonably believed to be genuine. In
attempting to confirm that telephone instructions are genuine, procedures are
used that are considered reasonable, which may include recording telephone
instructions and requesting information as to account registration such as the
shareholder account number and/or tax identification number (in the case of
CoreFunds) or sending confirmations within 72 hours of the exchange, verifying
the name in which an account is registered, the account number, and the account
holder's Social Security number, and sending proceeds only to the address of
record or to a previously authorized bank account (in the case of Conestoga).
II. DIVIDENDS AND DISTRIBUTIONS
All CoreFunds Portfolios and Conestoga Portfolios distribute their net
capital gains to shareholders at least annually. The following table shows the
Portfolios' policies concerning the declaration and payment of dividends from
net investment income.
A. DIVIDENDS DECLARED DAILY/PAID MONTHLY
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------
<S> <C>
COREFUNDS PORTFOLIOS CONESTOGA PORTFOLIOS
- ------------------------------------------------------------------------------------------------------------------
Cash Reserve Cash Management Fund
- ------------------------------------------------------------------------------------------------------------------
Tax-Free Reserve Tax-Free Fund
- ------------------------------------------------------------------------------------------------------------------
Treasury Reserve U.S. Treasury Securities Fund
- ------------------------------------------------------------------------------------------------------------------
Intermediate Bond Fund
- ------------------------------------------------------------------------------------------------------------------
Pennsylvania Municipal Bond Fund
- ------------------------------------------------------------------------------------------------------------------
Short-Term Fund
- ------------------------------------------------------------------------------------------------------------------
Bond Fund
- ------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------
</TABLE>
B. DIVIDENDS DECLARED MONTHLY/PAID MONTHLY
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------
<S> <C>
COREFUNDS PORTFOLIOS CONESTOGA PORTFOLIOS
- ------------------------------------------------------------------------------------------------------------------
(None) Intermediate Income Fund
- ------------------------------------------------------------------------------------------------------------------
Tax-Free Bond Fund
- ------------------------------------------------------------------------------------------------------------------
Short-Term Income Fund
- ------------------------------------------------------------------------------------------------------------------
Bond Fund
- ------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------
</TABLE>
C. DIVIDENDS DECLARED QUARTERLY/PAID QUARTERLY
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------
<S> <C>
COREFUNDS PORTFOLIOS CONESTOGA PORTFOLIOS
- ------------------------------------------------------------------------------------------------------------------
Value Equity Fund Equity Fund
- ------------------------------------------------------------------------------------------------------------------
Balanced Fund Balanced Fund
- ------------------------------------------------------------------------------------------------------------------
Special Equity Fund Special Equity Fund
- ------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------
</TABLE>
C-5
<PAGE>
D. DIVIDENDS DECLARED ANNUALLY/PAID ANNUALLY
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------
<S> <C>
COREFUNDS PORTFOLIOS CONESTOGA PORTFOLIOS
- ------------------------------------------------------------------------------------------------------------------
(None) International Equity Fund
- ------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------
</TABLE>
E. DIVIDENDS DECLARED PERIODICALLY/PAID PERIODICALLY
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------
<S> <C>
COREFUNDS PORTFOLIOS CONESTOGA PORTFOLIOS
- ------------------------------------------------------------------------------------------------------------------
International Growth Fund (None)
- ------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------
</TABLE>
F. THE COREFUNDS PORTFOLIOS AND CONESTOGA PORTFOLIOS ALL OFFER DIVIDEND
REINVESTMENT PROGRAMS.
APPENDIX IV
INTERIM INVESTMENT ADVISORY AND SUB-ADVISORY AGREEMENTS
FORM OF
INTERIM INVESTMENT ADVISORY AGREEMENT
AGREEMENT made as of _______________, 1996 between CONESTOGA FAMILY OF
FUNDS, a Massachusetts trust with transferrable shares (the 'Company'), and
Meridian Investment Company or its successor (the 'Investment Adviser').
WHEREAS, the Company is registered as an open-end, diversified, management
investment company under the Investment Company Act of 1940, as amended ('1940
Act'); and
WHEREAS, the Company desires to retain the Investment Adviser to furnish
investment advisory services to the Cash Management Fund, Tax-Free Fund, U.S.
Treasury Securities Fund, Equity Fund, Special Equity Fund, Bond Fund,
Intermediate Income Fund, Pennsylvania Tax-Free Bond Fund, Balanced Fund,
Short-Term Income Fund and International Equity Fund and such other investment
portfolios of the Company as the Company and the Investment Adviser may agree
upon from time to time (each, a 'Fund' and collectively, the 'Funds') and the
Investment Adviser represents that it is willing and possesses legal authority
to so furnish such services;
NOW, THEREFORE, in consideration of the premises and mutual covenants
herein contained, it is agreed between the parties hereto as follows:
1. Appointment. The Company hereby appoints the Investment Adviser to act
as investment adviser to the Fund or Funds identified on Schedule A hereto for
the period and on the terms set forth in this Agreement. The Investment Adviser
accepts such appointment and agrees to furnish the services herein set forth for
the compensation herein provided. Additional Funds may be added to this
Agreement from time to time by the parties executing a new Schedule A which
shall become effective upon its execution and shall supersede any Schedule A
having an earlier date.
2. Delivery of Documents. The Company has furnished the Investment Adviser
with copies properly certified or authenticated of each of the following:
(a) the Company's Agreement and Declaration of Trust, as executed on
August 1, 1989 and as filed with the Secretary of State of the Commonwealth
of Massachusetts on August 2, 1989, and all amendments thereto or
restatements thereof;
(b) the Company's Code of Regulations and any amendments thereto;
D-1
<PAGE>
(c) resolutions of the Company's Board of Trustees authorizing the
appointment of the Investment Adviser and approving this Agreement;
(d) the Company's Notification of Registration on Form N-8A under the
1940 Act as filed with the Securities and Exchange Commission on August 9,
1989 and any amendments thereto;
(e) the Company's Registration Statement on Form N-1A under the
Securities Act of 1933, as amended ('1933 Act') (File No. 33-30431) and
under the 1940 Act as filed with the Securities and Exchange Commission and
all amendments thereto; and
(f) the most recent prospectus and Statement of Additional Information
of each Fund (such prospectuses and Statement of Additional Information, as
presently in effect, and all amendments and supplements thereto are herein
collectively called the 'Prospectus').
The Company will furnish the Investment Adviser from time to time with
copies of all amendments of or supplements to the foregoing.
3. Management. Subject to the supervision of the Company's Board of
Trustees, the Investment Adviser will provide a continuous investment program
for each Fund, including investment research and management with respect to all
securities and investments and cash equivalents in said Funds. The Investment
Adviser will determine from time to time what securities and other investments
will be purchased, retained or sold by the Company with respect to each Fund.
The Investment Adviser will provide the services under this Agreement in
accordance with each Fund's investment objective, policies, and restrictions as
stated in the Prospectus and resolutions of the Company's Board of Trustees. The
Investment Adviser further agrees that it:
(a) will use the same skill and care in providing such services as it
uses in providing services to other accounts for which it has investment
responsibilities;
(b) will conform with all applicable Rules and Regulations of the
Securities and Exchange Commission and in addition will conduct its
activities under this Agreement in accordance with any applicable
regulations of any governmental authority pertaining to the investment
advisory activities of the Investment Adviser;
(c) will not make loans to any person to purchase or carry units of
beneficial interest in the Company or make interest-bearing loans to the
Company;
(d) will place orders pursuant to its investment determinations for
the Company either directly with the issuer or with any broker or dealer.
In placing orders with brokers and dealers, the Investment Adviser will
attempt to obtain prompt execution of orders in an effective manner at the
most favorable price. Consistent with this obligation, when the execution
and price offered by two or more brokers or dealers are comparable, the
Investment Adviser may, in its discretion, purchase and sell portfolio
securities to and from brokers and dealers who provide the Investment
Adviser with research advice and other services; In no instance will
portfolio securities be purchased from or sold to SEI Financial Management
Corporation, SEI Financial Services Company, the Investment Adviser, or any
affiliated person of either the Company, SEI Financial Management
Corporation, SEI Financial Services Company, or the Investment Adviser;
(e) will maintain all books and records with respect to the Company's
securities transactions and will furnish the Company's Board of Trustees
such periodic and special reports as the Board may request;
(f) will treat confidentially and as proprietary information of the
Company all records and other information relative to the Company and
prior, present, or potential interestholders, and will not use such records
and information for any purpose other than performance of its
responsibilities and duties hereunder, except after prior notification to
and approval in writing by the Company, which approval shall not be
unreasonably withheld and may not be withheld where the Investment Adviser
may be exposed to civil or criminal contempt proceedings for failure to
D-2
<PAGE>
comply, when requested to divulge such information by duly constituted
authorities, or when so requested by the Company; and
(g) will maintain its policy and practice of conducting its fiduciary
functions independently. In making investment recommendations for the
Company, the Investment Adviser's personnel will not inquire or take into
consideration whether the issuers of securities proposed for purchase or
sale for the Company's account are customers of the Investment Adviser or
of its parent or its subsidiaries or affiliates. In dealing with such
customers, the Investment Adviser and its parent, subsidiaries, and
affiliates will not inquire or take into consideration whether securities
of those customers are held by the Company.
4. Assistance. The Investment Adviser may employ or contract with other
persons to assist it in the performance of this Agreement (herein, a
'Sub-Adviser'); provided, however, that the retention of any Sub-Adviser shall
be approved as may be required by the 1940 Act. A Sub-Adviser may perform under
the supervision of the Investment Adviser any or all services described under
Section 3. Sub-Advisers may include other investment advisory or management
firms and officers or employees who are employed by both the Investment Adviser
and the Company. The fees or other compensation of any Sub-Adviser shall be paid
by the Investment Adviser and no obligation may be incurred on the Company's
behalf to any such person.
In the event that the Investment Adviser appoints a Sub-Adviser, the
Investment Adviser will review, monitor, and report to the Company's Board of
Trustees on the performance and investment procedures of any such Sub-Adviser;
assist and consult with any Sub-Adviser in connection with the Fund's continuous
investment program; and approve lists of foreign countries which may be
recommended by any Sub-Adviser for investment by the Fund.
5. Services Not Exclusive. The investment management services furnished by
the Investment Adviser hereunder are not to be deemed exclusive, and the
Investment Adviser shall be free to furnish similar services to others so long
as its services under this Agreement are not impaired thereby.
6. Books and Records. In compliance with the requirements of Rule 31a-3
under the 1940 Act, the Investment Adviser hereby agrees that all records which
it maintains for the Company are the property of the Company and further agrees
to surrender promptly to the Company any of such records upon the Company's
request. The Investment Adviser further agrees to preserve for the periods
prescribed by Rule 31a-2 under the 1940 Act the records required to be
maintained by Rule 31a-1 under the 1940 Act.
7. Expenses. During the term of this Agreement, the Investment Adviser will
pay all expenses incurred by it in connection with its activities under this
Agreement other than the cost of securities (including brokerage commissions, if
any) purchased for the Company.
8. Compensation. For the services provided and the expenses assumed
pursuant to this Agreement, each Fund will pay the Investment Adviser and the
Investment Adviser will accept as full compensation therefor a fee equal to the
lesser of (i) the fee computed daily and paid monthly at the applicable annual
rate set forth on Schedule A hereto, or (ii) such fee as may from time to time
be agreed upon in writing by the Company and the Investment Adviser in advance
of the period to which the fee relates. Each Fund's obligation to pay the
above-described fee to the Investment Adviser will begin as of the date of the
initial public sale of shares in that Fund.
If in any fiscal year the aggregate expenses of any Fund (as defined under
the securities regulations of any state having jurisdiction over the Company)
exceed the expense limitations of any such state, the Investment Adviser will
reimburse such Fund for a portion of such excess expenses equal to such excess
times the ratio of the fees otherwise payable by such Fund to the Investment
Adviser hereunder to the sum of the aggregate fees otherwise payable by the Fund
to the Investment Adviser hereunder and to SEI Financial Management Corporation
under the Administration Agreement between SEI Financial Management Corporation
and the Company. The obligation of the Investment Adviser to reimburse the Funds
hereunder is limited in any fiscal year to the amount of its fee hereunder for
such fiscal year, provided, however, that notwithstanding the foregoing, the
Investment
D-3
<PAGE>
Adviser shall reimburse the Funds for such proportion of such excess expenses
regardless of the amount of fees paid to it during such fiscal year to the
extent that the securities regulations of any state having jurisdiction over the
Company so require. Such expense reimbursement, if any, will be estimated daily
and reconciled and paid on a monthly basis.
The fee attributable to each Fund shall be the several (and not joint or
joint and several) obligation of each such Fund.
9. Limitation of Liability. The Investment Adviser shall not be liable for
any error of judgment or mistake of law or for any loss suffered by any Fund in
connection with the performance of this Agreement, except a loss resulting from
a breach of fiduciary duty with respect to the receipt of compensation for
services or a loss resulting from willful misfeasance, bad faith or gross
negligence on the part of the Investment Adviser in the performance of its
duties or from reckless disregard by it of its obligations and duties under this
Agreement.
10. Duration and Termination. This Agreement will become effective as to a
Fund as of the date first written above, provided that it shall have been
approved by vote of a majority of the outstanding voting securities of such Fund
in accordance with the requirements under the 1940 Act, and, unless sooner
terminated as provided herein, shall continue in effect for two years after such
effective date. Thereafter, if not terminated, this Agreement shall continue in
effect as to each Fund for successive yearly periods, provided that such
continuance is specifically approved at least annually (a) by the vote of a
majority of those members of the Company's Board of Trustees who are not parties
to this Agreement or interested persons of any party to this Agreement, cast in
person at a meeting called for the purpose of voting on such approval, and (b)
by the vote of a majority of the Company's Board of Trustees or by the vote of a
majority of the outstanding voting securities of such Fund. Notwithstanding the
foregoing, this Agreement may be terminated as to a particular Fund at any time
on 60 days' written notice, without the payment of any penalty, by the Company
(by vote of the Company's Board of Trustees or by vote of a majority of the
outstanding voting securities of such Fund) or by the investment Adviser. This
Agreement will immediately terminate in the event of its assignment. (As used in
this Agreement, the terms 'majority of the outstanding voting securities,'
'interested persons' and 'assignment' shall have the meaning given to such terms
by the 1940 Act.)
11. Amendment of this Agreement. No provision of this Agreement may be
changed, discharged or terminated orally, but only by an instrument in writing
signed by the party against which enforcement of the change, discharge or
termination is sought.
12. Miscellaneous. The captions in this Agreement are included for
convenience of reference only and in no way define or delimit any of the
provisions hereof or otherwise affect their construction or effect. If any
provision of this Agreement shall be held or made invalid by a court decision,
statute, rule or otherwise, the remainder of this Agreement shall not be
affected thereby. This Agreement shall be binding upon and shall inure to the
benefit of the parties hereto and their respective successors and shall be
governed by the law of the Commonwealth of Pennsylvania.
The names 'Conestoga Family of Funds' and 'Trustees of Conestoga Family of
Funds' refer respectively to the Trust created and the Trustees, as trustees but
not individually or personally, acting from time to time under a Declaration of
Trust dated August 1, 1989 which is hereby referred to and a copy of which is on
file at the office of the State Secretary of The Commonwealth of Massachusetts
and at the principal office of the Trust. The obligations of 'Conestoga Family
of Funds' entered into in the name or on behalf thereof by any of the Trustees,
representatives or agents are made not individually, but in such capacities, and
are not binding upon any of the Trustees, shareholders or representatives of the
Trust personally, but bind only the Trust Property, and all persons dealing with
any class of shares of the Trust must look solely to the Trust Property
belonging to such class for the enforcement of any claims against the Trust.
IN WITNESS WHEREOF, the parties hereto have caused this instrument to be
executed by their duly authorized officers designated below as of the day and
year first above written.
CONESTOGA FAMILY OF FUNDS
Seal By: s/
------------------------
Title:
D-4
<PAGE>
MERIDIAN INVESTMENT COMPANY
Seal By: s/
------------------------
Title:
D-5
<PAGE>
SCHEDULE A
TO THE
INVESTMENT ADVISORY AGREEMENT
BETWEEN CONESTOGA FAMILY OF FUNDS AND
MERIDIAN INVESTMENT COMPANY
DATED ______________, 1996
<TABLE>
<CAPTION>
NAME OF FUND COMPENSATION*
- ------------------------------------------------------ ---------------
<S> <C>
Cash Management Fund.................................. 0.40%
Tax-Free Fund......................................... 0.40%
U.S. Treasury Securities Fund......................... 0.40%
Equity Fund........................................... 0.74%
Special Equity Fund................................... 1.50%
Bond Fund............................................. 0.74%
Intermediate Income Fund.............................. 0.74%
Pennsylvania Tax-Free Bond Fund....................... 0.74%
Short-Term Income Fund................................ 0.74%
Balanced Fund......................................... 0.75%
International Equity Fund............................. 1.00%
</TABLE>
CONESTOGA FAMILY OF FUNDS
By: s/
------------------------
Title:
MERIDIAN INVESTMENT COMPANY
By: s/
------------------------
Title:
- ------------------
* All fees are stated as an annual rate based upon the Fund's average daily net
assets and are computed daily and payable monthly.
D-6
<PAGE>
FORM OF
INTERIM SUB-ADVISORY AGREEMENT
AGREEMENT made as of _______________, 1996 between Meridian Investment
Company or its successor (the 'Adviser') and Marvin and Palmer Associates, Inc.
(the 'Sub-Adviser').
WHEREAS, Conestoga Family of Funds (the 'Company') is registered as an
open-end diversified, management investment company under the Investment Company
Act of 1940, as amended ('1940 Act'); and
WHEREAS, the Adviser desires to retain the Sub-Adviser to furnish
investment advisory services to the Company's International Equity Fund (the
'Fund') and the Sub-Adviser represents that it is willing and possesses legal
authority to so furnish such services;
NOW, THEREFORE, in consideration of the premises and mutual covenants
herein contained, it is agreed between the parties hereto as follows:
1. Appointment. The Advisor hereby appoints the Sub-Advisor to act as
Sub-adviser to the Fund for the period and on the terms set forth in this
Agreement. The Sub-Adviser accepts such appointment and agrees to furnish the
services herein set forth for the compensation herein provided.
2. Delivery of Documents. The Adviser has furnished the Sub-Adviser with
copies properly certified or authenticated of each of the following:
(a) the Company's Agreement and Declaration of Trust, as executed on
August 1, 1989 and as filed with the Secretary of State of the Commonwealth
of Massachusetts on August 2, 1989, and all amendments thereto or
restatements thereof;
(b) the Company's Code of Regulations and any amendments thereto;
(c) resolutions of the Company's Board of Trustees authorizing the
appointment of the Sub-Adviser, approving this Agreement, and establishing
the investment objective, policies and restrictions of the Fund;
(d) the Company's Notification of Registration on Form N-8A under the
1940 Act as filed with the Securities and Exchange Commission on August 9,
1989 and any amendments thereto;
(e) the amendments to the Company's Registration Statement on Form
N-1A under the Securities Act of 1933, as amended ('1933 Act'), (File No.
33-30431) and under the 1940 Act relating to the Fund as filed with the
Securities and Exchange Commission and all amendments thereto; and
(f) the Fund's most recent prospectuses and Statement of Additional
Information (such prospectuses and Statement of Additional Information, as
presently in effect, and all amendments and supplements thereto are herein
collectively called the 'Prospectus').
The Adviser will furnish the Sub-Adviser from time to time with copies of
all amendments of or supplements to the foregoing.
3. Duties of Sub-Adviser. Subject to the supervision of the Company's Board
of Trustees, the Sub-Adviser will assist the Adviser in providing a continuous
investment program for the Fund, including investment research and management
with respect to all securities and investments and cash equivalents of the Fund.
The Sub-Adviser will provide the services under this Agreement in accordance
with the Fund's investment objective, policies, and restrictions as stated in
the Prospectus and resolutions of the Company's Board of Trustees.
Without limiting the generality of the foregoing, Sub-Adviser further
agrees that it will:
(a) prepare, subject to the Adviser's approval, lists of foreign
countries for investment by the Fund and determine from time to time what
securities and other investments will be purchased,
D-7
<PAGE>
retained or sold for the Fund, including, with the assistance of the
Adviser, the Fund's investments in futures and forward currency contracts;
(b) manage in consultation with the Adviser the Fund's temporary
investments in securities;
(c) manage the Fund's overall cash position, and determine from time
to time what portion of the Fund's assets will be held in different
currencies;
(d) provide the Adviser with foreign broker research, a quarterly
review of international economic and investment developments, and
occasional analyses on international investment issues;
(e) attend regular business and investment-related meetings with the
Company's Board of Trustees and the Adviser if requested to do so by the
Company and/or the Adviser; and
(f) maintain books and records with respect to the securities
transactions for the Fund, furnish to the Adviser and the Company's Board
of Trustees such periodic and special reports as they may request with
respect to the Fund, and provide in advance to the Adviser all reports to
the Company's Board of Trustees for examination and review within a
reasonable time prior to the Company's Board meetings.
4. Covenants by Sub-Adviser. Sub-Adviser agrees with respect to the
services provided to the Fund that it:
(a) will use the same skill and care in providing such services as it
uses in providing services to other accounts for which it has investment
responsibilities, and will conform with all applicable Rules and
Regulations of the Securities and Exchange Commission ('SEC Regulations')
and in addition will conduct its activities under this Agreement in
accordance with any applicable regulations of any governmental authority
pertaining to the investment advisory activities of the Sub-Adviser;
(b) will telecopy trade information to the Adviser on the first
business day following the day of the trade and cause broker confirmations
to be sent directly to the Adviser; and
(c) will treat confidentially and as proprietary information of the
Company all records and other information relative to the Fund and prior,
present or potential shareholders, and will not use such records and
information for any purpose other than performance of its responsibilities
and duties hereunder (except after prior notification to and approval in
writing by the Company, which approval may not be withheld where
Sub-Adviser would be exposed to civil or criminal contempt proceedings for
failure to comply, when requested to divulge such information by duly
constituted authorities, or when so requested by the Company).
5. Services Not Exclusive.
(a) The services furnished by Sub-Adviser hereunder are deemed not to
be exclusive, and nothing in this Agreement shall (i) prevent Sub-Adviser
or any affiliated person (as defined in the 1940 Act) of Sub-Adviser from
acting as investment adviser or manager for any other person or persons,
including other management investment companies with investment objectives
and policies the same as or similar to those of the Fund or (ii) limit or
restrict Sub-Adviser or any such affiliated person from buying, selling or
trading any securities or other investments (including any securities or
other investments which the Fund is eligible to buy) for its or their own
accounts or for the accounts of others for whom it or they may be acting;
provided, however, that Sub-Adviser agrees that it will not undertake any
activities which, in its reasonable judgment, will adversely affect the
performance of its obligations to the Fund under this Agreement.
(b) Nothing contained herein, however, shall prohibit Sub-Adviser from
advertising or soliciting the public generally with respect to other
products or services, regardless of whether such advertisement or
solicitation may include prior, present or potential shareholders of the
Company.
D-8
<PAGE>
6. Portfolio Transactions. Investment decisions for the Fund shall be made
by Sub-Adviser independently from those for any other investment companies and
accounts advised or managed by Sub-Adviser. The Fund and such investment
companies and accounts may, however, invest in the same securities. When a
purchase or sale of the same security is made at substantially the same time on
behalf of the Fund and/or another investment company or account, the transaction
will be averaged as to price, and available investments allocated as to amount,
in a manner which Sub-Adviser believes to be equitable to the Fund and such
other investment company or account. In some instances, this investment
procedure may adversely affect the price paid or received by the Fund or the
size of the position obtained or sold by the Fund. To the extent permitted by
law, Sub-Adviser may aggregate the securities to be sold or purchased for the
Fund with those to be sold or purchased for other investment companies or
accounts in order to obtain best execution.
Sub-Adviser shall place orders for the purchase and sale of portfolio
securities and will solicit broker-dealers to execute transactions in accordance
with the Fund's policies and restrictions regarding brokerage allocations.
Sub-Adviser shall place orders pursuant to its investment determination for the
Fund either directly with the issuer or with any broker or dealer selected by
Sub-Adviser. In executing portfolio transactions and selecting brokers or
dealers, Sub-Adviser shall use its reasonable best efforts to seek the most
favorable execution of orders, after taking into account all factors Sub-Adviser
deems relevant, including the breadth of the market in the security, the price
of the security, the financial condition and execution capability of the broker
or dealer, and the reasonableness of the commission, if any, both for the
specific transaction and on a continuing basis. Consistent with this obligation,
Sub-Adviser may, to the extent permitted by law, purchase and sell portfolio
securities to and from brokers and dealers who provide brokerage and research
services (within the meaning of Section 28(e) of the Securities Exchange Act of
1934) to or for the benefit of the Fund and/or other accounts over which
Sub-Adviser or any of its affiliates exercises investment discretion.
Sub-Adviser is authorized to pay to a broker or dealer who provides such
brokerage and research services a commission for executing a portfolio
transaction for the Fund which is in excess of the amount of commission another
broker or dealer would have charged for effecting that transaction if
Sub-Adviser determines in good faith that such commission was reasonable in
relation to the value of the brokerage and research services provided by such
broker or dealer, viewed in terms of either that particular transaction or Sub-
Adviser's overall responsibilities to the Fund and to the Company. In no
instance will portfolio securities be purchased from or sold to Sub-Adviser, or
the Fund's principal underwriter, or any affiliated person thereof except as
permitted by SEC Regulations.
7. Books and Records. In compliance with the requirements of Rule 31a-3
under the 1940 Act, Sub-Adviser acknowledges that all records which it maintains
for the Company are the property of the Company and agrees to surrender promptly
to the Company any of such records upon the Company's request, provided, that
Sub-Adviser may retain copies thereof at its own expense. Sub-Adviser further
agrees to preserve for the periods prescribed by Rule 31a-2 under the 1940 Act
the records required to be maintained by Rule 31a-1 under the 1940 Act.
8. Expenses. During the term of this Agreement, Sub-Adviser will pay all
expenses incurred by it in connection with its activities under this Agreement
other than the cost of securities, commodities and other investments (including
brokerage commissions and other transaction charges, if any) purchased for the
Fund.
9. Compensation. For the services provided by the Sub-Adviser pursuant to
this Agreement, the Adviser will pay to the Sub-Adviser a fee, payable monthly,
at the annual rates of seventy-five one-hundredths of one percent (0.75%) of the
average of the first $100,000,000 of the daily net assets of the Fund, seventy
one-hundredths of one percent (0.70%) of the average of the next $100,000,000 of
such assets, sixty-five one-hundredths of one percent (0.65%) of the average of
the next $100,000,000 of such assets, and sixty one-hundredths of one percent
(0.60%) of the average of such assets in excess of $300,000,000. If this
Agreement shall become effective subsequent to the first day of a month, or
shall terminate before the last day of a month, the Sub-Adviser's compensation
for such fraction of the month shall be determined by applying the foregoing
percentages to the average daily net asset value
D-9
<PAGE>
of the Fund during such fraction of a month and in the proportion that such
fraction of a month bears to the entire month.
10. Limitation of Liability. The Sub-Adviser shall not be liable for any
error of judgment or mistake of law or for any loss suffered by the Fund or the
Adviser in connection with the performance of this Agreement, except a loss
resulting from a breach of fiduciary duty with respect to the receipt of
compensation for services or a loss resulting from willful misfeasance, bad
faith or gross negligence on the part of the Sub-Adviser in the performance of
its duties or from reckless disregard by it of its obligations and duties under
this Agreement.
The Sub-Adviser agrees to indemnify the Adviser with respect to any loss,
liability, judgment, cost or penalty which the Fund or the Adviser may directly
or indirectly suffer or incur in any way arising out of or in connection with
any material breach of this Agreement by the Sub-Adviser. The Adviser agrees to
indemnify the Sub-Adviser with respect to any loss, liability, judgment, cost or
penalty which the Sub-Adviser may directly or indirectly suffer or incur in any
way arising out of the performance of its duties under this Agreement as
provided in the following paragraph.
The Sub-Adviser shall give the Adviser the benefit of its best judgment and
effort in rendering services hereunder, but the Sub-Adviser shall not be liable
for any act or omission or for any loss sustained by the Adviser in connection
with the matters to which this Agreement relates, except a loss resulting from
willful misfeasance, bad faith or gross negligence in the performance of its
duties, or by reason of its reckless disregard of its obligations and duties,
under this Agreement. The Sub-Adviser shall be entitled to full indemnification
from the Adviser for any loss, liability, judgment, cost or penalty arising from
(a) any act by any person or entity (including the Adviser) for which the Sub-
Adviser was not involved directly in either the act itself or the decision
making process leading up to such act, (b) any act by the Sub-Adviser taken upon
the written instructions of the Adviser or (c) the performance of the
Sub-Adviser's duties under this Agreement; provided, however, the Sub-Adviser
shall not be entitled to indemnity under clause (c) of this sentence for any
loss, liability, judgment, cost or penalty resulting from willful misfeasance,
bad faith or negligence in the performance of its duties, or by reason of its
reckless disregard of its obligations and duties, under this Agreement.
11. Duration and Termination. This Agreement will become effective as to
the Fund as of the date first written above, provided that it shall have been
approved by vote of a majority of the outstanding voting securities of the Fund
in accordance with the requirements under the 1940 Act, and, unless sooner
terminated as provided herein, shall continue in effect for two years after such
effective date. Thereafter, if not terminated, this Agreement shall continue in
effect for successive yearly periods, provided that such continuance is
specifically approved at least annually (a) by the vote of a majority of those
members of the Company's Board of Trustees who are not parties to this
Agreement, cast in person at a meeting called for the purpose of voting on such
approval, and (b) by the vote of a majority of the Company's Board of Trustees
or by the vote of a majority of the outstanding voting securities of the Fund.
Notwithstanding the foregoing, this Agreement may be terminated at any time on
60 days' written notice, without the payment of any penalty, by the Company (by
vote of the Company's Board of Trustees or by vote of a majority of the
outstanding voting securities of the Fund), by the Adviser, or by the
Sub-Adviser. This Agreement will immediately terminate in the event of its
assignment. (As used in this Agreement, the terms 'majority of the outstanding
voting securities,' 'interested persons' and 'assignment' shall have the meaning
given to such terms by the 1940 Act.)
12. Amendment of this Agreement. No provision of this Agreement may be
changed, discharged or terminated orally, but only by an instrument in writing
signed by the party against which enforcement of the change, discharge or
termination is sought. No amendment of this Agreement shall be effective with
respect to the Fund until approved by the vote of a majority of the outstanding
voting securities of the Fund.
13. Miscellaneous. The captions in this Agreement are included for
convenience of reference only and in no way define or delimit any of the
provisions hereof or otherwise affect their construction or effect. If any
provision of this Agreement shall be held or made invalid by a court decision,
statute,
D-10
<PAGE>
rule or otherwise, the remainder of this Agreement shall not be affected
thereby. This Agreement shall be binding upon and shall inure to the benefit of
the parties hereto and their respective successors and shall be governed by the
law of the State of Delaware.
IN WITNESS WHEREOF, the parties hereto have caused this instrument to be
executed by their duly authorized officers designated below as of the day and
year first above written.
MERIDIAN INVESTMENT COMPANY
By: s/
------------------------
Title:
MARVIN AND PALMER ASSOCIATES, INC.
By: s/
------------------------
Title:
D-11
<PAGE>
PART B
<PAGE>
CONESTOGA FAMILY OF FUNDS
680 East Swedesford Road
Wayne, Pennsylvania 19087-1658
COREFUNDS, INC.
680 East Swedesford Road
Wayne, Pennsylvania 19087-1658
STATEMENT OF ADDITIONAL INFORMATION
(1996 Special Meeting of Shareholders of
Conestoga Family of Funds)
This Statement of Additional Information is not a prospectus but should
be read in conjunction with the Combined Proxy Statement/Prospectus dated
February 6, 1996 for the Special Meeting of Shareholders of Conestoga Family of
Funds, to be held
on March 22, 1996. Copies of the Combined Proxy Statement/Prospectus may be
obtained at no charge by calling The Conestoga Family of Funds at
1-800-344-2716.
Unless otherwise indicated, capitalized terms used herein and not
otherwise defined have the same meanings as are given to them in the Combined
Proxy Statement/Prospectus.
Further information about Institutional and Individual Shares of the
Existing CoreFunds Portfolios is contained in and incorporated by reference to
CoreFunds' Statement of Additional Information dated November 1, 1995, a copy of
which is included herewith. The audited financial statements and related
independent accountant's report for the Existing CoreFunds Portfolios contained
in the Annual Report dated June 30, 1995, are hereby incorporated herein by
reference. No other parts of the Annual Reports are incorporated by reference
herein.
Further information about Institutional and Retail Shares of the
Conestoga Portfolios is contained in and incorporated by reference to
Conestoga's Statement of Additional Information dated May 1, 1995 (as revised
through November 3, 1995), copies of which are included herewith. The audited
financial statements and related independent accountant's report for Conestoga
contained in the Annual Report dated October 31, 1995 are included herein. No
other parts of the Annual Report are incorporated by reference herein.
The date of this Statement of Additional Information is February 6,
1996.
C-2
<PAGE>
TABLE OF CONTENTS
Page
General Information............................................. 3
Pro Forma Financial Statements.................................. PFS-1
Audited Financial Statements for the
Conestoga Portfolios for the year ended
October 31, 1995.......................................... FS-
C-3
<PAGE>
GENERAL INFORMATION
The Shareholders of the Conestoga Family of Funds ("Conestoga") are
being asked to approve or disapprove an Agreement and Plan of Reorganization
(the "Reorganization Agreement") dated as of February 8, 1996 between
Conestoga and CoreFunds, Inc. ("CoreFunds"), and the transactions contemplated
thereby. The Reorganization Agreement contemplates the transfer of substantially
all of the assets and liabilities of Conestoga's Cash Management Fund, Tax-Free
Fund, U.S. Treasury Securities Fund, Equity Fund, Special Equity Fund, Bond
Fund, Intermediate Income Fund, Pennsylvania Tax-Free Bond Fund, Balanced Fund,
Short-Term Income Fund and International Equity Fund to corresponding CoreFunds
Portfolios in exchange for full and fractional shares representing interests in
such corresponding CoreFunds Portfolios. The shares issued by CoreFunds will
have an aggregate net asset value equal to the aggregate net asset value of the
shares of the respective Conestoga Portfolios that are outstanding immediately
before the Effective Time of the Reorganization.
Following the exchange, the Conestoga Portfolios will make a
liquidating distribution of corresponding CoreFunds Portfolios shares to their
shareholders. Each shareholder owning shares of a particular Conestoga Portfolio
at the Effective Time of the Reorganization will receive shares of the
corresponding CoreFunds Portfolio of equal value, plus the right to receive any
unpaid dividends and distributions that were declared before the Effective Time
of the Reorganization on Conestoga Portfolio shares. Upon completion of the
Reorganization, Conestoga will be terminated under state law and deregistered
under the Investment Company Act of 1940.
The Special Meeting of Shareholders of Conestoga to consider the
Reorganization Agreement and the related transactions will be held at 10:00 a.m.
Eastern time on March 22, 1996 at The Wilmington Hilton, 630 Naamans Road,
Wilmington, Delaware. For further information about the transaction, see the
Combined Proxy
Statement/Prospectus.
Banking laws and regulations currently prohibit a bank holding company
registered under the Bank Holding Company Act of 1956, as amended, or any bank
or non-bank affiliate thereof from sponsoring, organizing, controlling, or
distributing the shares of a registered, open-end investment company
continuously engaged in the issuance of its shares, and prohibit banks generally
from issuing, underwriting, selling, or distributing securities such as shares
of the CoreFunds Portfolios, but do not prohibit such a bank holding company or
its affiliates or banks generally from acting as investment adviser, transfer
agent, or custodian to such an investment company or from purchasing shares of
such a
C-4
<PAGE>
company as agent for and upon the order of customers. CoreStates Advisers and
financial intermediaries which agree to provide shareholder support services
that are banks or bank affiliates are subject to such banking laws and
regulations. Should legislative, judicial, or administrative action prohibit or
restrict the activities of such companies in connection with their services to
the CoreFunds Portfolios, CoreFunds might be required to alter materially or
discontinue its arrangement with such companies and change its method of
operation. It is anticipated, however, that any resulting change in CoreFunds'
method of operation would not affect a CoreFunds Portfolio's net asset value per
share or result in financial loss to any shareholder.
C-5
<PAGE>
CoreFund Cash Reserve Fund
Conestoga Cash Management Fund
Pro-forma Schedule of Investments
31-Oct-95
<TABLE>
<CAPTION>
CoreFund Conestoga Pro-forma Combined
Maturity Coupon
Security Description Date Rate Par Value Par Value Par Value
<S> <C> <C> <C> <C> <C> <C> <C> <C>
GOVERNMENT SECURITIES
U.S. TREASURY BILLS
UNITED STATES TREASURY BILL 1/11/96 5.41 3,000,000 2,967,991 3,000,000 2,967,991
UNITED STATES TREASURY BILL 7/25/96 5.54 5,000,000 4,794,558 5,000,000 4,794,558
U.S. AGENCY BONDS
FEDERAL HOME LOAN MORTGAGE ASSOCIATION 11/21/95 5.56 5,000,000 4,984,556 5,000,000 4,984,556
FEDERAL NATIONAL MORTGAGE ASSOCIATION 12/4/95 5.42 10,000,000 9,950,317 10,000,000 9,950,317
FEDERAL NATIONAL MORTGAGE ASSOCIATION 12/5/95 5.52 10,000,000 9,947,867 10,000,000 9,947,867
FEDERAL NATIONAL MORTGAGE ASSOCIATION 12/6/95 5.64 20,000,000 19,891,694 20,000,000 19,891,694
FEDERAL NATIONAL MORTGAGE ASSOCIATION 1/4/96 5.59 5,000,000 4,950,311 5,000,000 4,950,311
FEDERAL HOME LOAN BANK 1/17/96 5.49 3,000,000 2,964,773 3,000,000 2,964,773
FEDERAL NATIONAL MORTGAGE ASSOCIATION 2/20/96 5.58 5,000,000 4,913,975 5,000,000 4,913,975
FLOATING RATE AGENCIES
FEDERAL NATIONAL MORTGAGE ASSOCIATION 11/1/95 5.55 10,000,000 10,000,000 10,000,000 10,000,000
STUDENT LOAN MARKETING ASSOCOATION 1/11/96 5.65 5,000,000 5,000,000 5,000,000 5,000,000
CORPORATE SECURITIES
CORPORATE BONDS
AMERICAN EXPRESS CENTURIAN BANK 11/7/95 5.87 10,000,000 10,000,000 10,000,000 10,000,000
ASSET BACKED SECURITIES
CASE EQUIPMENT LOAN TRUST 1995-B CLASS A1 9/15/96 5.83 2,047,541 2,047,541 2,047,541 2,047,541
DOMESTIC CD'S
NATIONAL WESTMINSTER BANK 12/11/95 5.77 5,000,000 5,000,000 5,000,000 5,000,000
EURO CD'S
HARRIS TRUST & SAVINGS BANK 1/17/96 5.79 10,000,000 10,000,132 10,000,000 10,000,132
PRIVATE PLACEMENT
ELI LILLY 1/16/96 5.82 3,000,000 2,963,140 3,000,000 2,963,140
CAISSE DES DEPOTS ET CONSIGNATIONS 1/16/96 5.64 5,000,000 4,940,467 5,000,000 4,940,467
DOMESTIC CP
AIG FUNDING 11/1/95 6.04 3,000,000 3,000,000 3,000,000 3,000,000
AMERICAN EXPRESS 11/1/95 5.70 5,000,000 5,000,000 5,000,000 5,000,000
NEW CENTER ASSET TRUST 11/1/95 5.90 25,000,000 25,000,000 25,000,000 25,000,000
SARA LEE 11/2/95 5.80 5,000,000 4,999,194 5,000,000 4,999,194
PEPSI 11/3/95 5.67 5,000,000 4,998,425 5,000,000 4,998,425
ABBEY NATIONAL BANK 11/7/95 5.67 10,000,000 9,990,550 10,000,000 9,990,550
METROPOLITAN LIFE FUNDING INCORPORATED 11/8/95 5.72 10,884,000 10,871,895 10,884,000 10,871,895
SARA LEE 11/8/95 5.71 5,000,000 4,994,449 5,000,000 4,994,449
AIG FUNDING INCORPORATED 11/9/95 5.70 10,000,000 9,987,333 10,000,000 9,987,333
COCA-COLA COMPANY 11/9/95 5.68 10,000,000 9,987,378 10,000,000 9,987,378
DUPONT (E.I.DE NEMOURS) & COMPANY 11/9/95 5.67 10,000,000 9,987,400 10,000,000 9,987,400
ASSET SECURITIZATION CO-OP CORPORATION 11/10/95 5.74 15,000,000 14,978,475 15,000,000 14,978,475
RAYTHEON CORPORATION 11/13/95 5.66 10,000,000 9,981,133 10,000,000 9,981,133
MERRILL LYNCH & COMPANY 11/15/95 5.72 10,000,000 9,977,756 10,000,000 9,977,756
ASSET SECURITIZATION CO-OP CORPORATION 11/16/95 5.69 3,150,000 3,142,532 3,150,000 3,142,532
GENERAL ELECTRIC CAPITAL CORPORATION 11/16/95 5.67 4,000,000 3,990,550 4,000,000 3,990,550
AT&T CORPORATION 11/17/95 5.65 10,000,000 9,974,889 10,000,000 9,974,889
CAISSE DES DEPOTS EN CONSIGNATION 11/20/95 5.70 10,000,000 9,969,917 10,000,000 9,969,917
CORPORATE ASSET FUNDING COMPANY 11/21/95 5.67 15,000,000 14,952,750 15,000,000 14,952,750
TOYS-R-US 11/21/95 5.69 15,000,000 14,952,583 15,000,000 14,952,583
CANADIAN IMPERIAL BANK OF COMMERCE 11/22/95 5.72 10,000,000 9,966,633 10,000,000 9,966,633
HEWLETT-PACKARD COMPANY 11/28/95 5.63 10,000,000 9,957,775 10,000,000 9,957,775
BARCLAYS BANK OF CANADA 11/30/95 5.67 10,000,000 9,954,325 10,000,000 9,954,325
JC PENNY 11/30/95 5.71 5,000,000 4,977,001 5,000,000 4,977,001
CAISSE DES DEPOTS EN CONSIGNATION 12/4/95 5.69 10,000,000 9,947,842 10,000,000 9,947,842
BANC ONE FUNDING CORPORATION 12/5/95 5.65 5,000,000 4,973,319 5,000,000 4,973,319
DUPONT (E.I.DE NEMOURS) & COMPANY 12/5/95 5.64 5,000,000 4,973,367 5,000,000 4,973,367
MERRILL LYNCH & COMPANY 12/6/95 5.65 5,000,000 4,972,535 5,000,000 4,972,535
ARCO COAL AUSTRALIA 12/7/95 5.67 4,524,000 4,498,349 4,524,000 4,498,349
FORD MOTOR CREDIT CORPORATION 12/8/95 5.68 10,000,000 9,941,622 10,000,000 9,941,622
NATIONAL AUSTRALIA FUNDING 12/14/95 5.70 10,000,000 9,931,917 10,000,000 9,931,917
PITNEY BOWES CREDIT CORPORATION 12/14/95 5.58 10,000,000 9,933,350 10,000,000 9,933,350
COCA-COLA COMPANY 12/15/95 5.68 10,000,000 9,930,578 10,000,000 9,930,578
GENERAL ELECTRIC CAPITAL CORPORATION 12/18/95 5.68 10,900,000 10,819,170 10,900,000 10,819,170
SWEDISH EXPORT CREDIT CORPORATION 12/18/95 5.58 5,000,000 4,963,575 5,000,000 4,963,575
INTEL CORPORATION 12/22/95 5.67 25,000,000 24,799,188 25,000,000 24,799,188
SARA LEE CORPORATION 12/27/95 5.68 10,000,000 9,911,644 10,000,000 9,911,644
DEUTSCHE BANK FINANCIAL 1/5/96 5.72 5,000,000 4,948,361 5,000,000 4,948,361
ABBEY NATIONAL 1/8/96 5.59 5,000,000 4,947,206 5,000,000 4,947,206
INTERNATIONAL LEASE FINANCE 1/8/96 5.71 5,000,000 4,946,072 5,000,000 4,946,072
PROVINCE OF QUEBEC 1/9/96 5.62 10,000,000 9,892,283 10,000,000 9,892,283
AMERICAN EXPRESS 1/12/96 5.69 5,000,000 4,943,100 5,000,000 4,943,100
PROVINCE OF ALBERTA 1/12/96 5.55 3,000,000 2,966,700 3,000,000 2,966,700
SCHERRING-PLOUGH CORPORATION 1/16/96 5.55 10,000,000 9,882,833 10,000,000 9,882,833
CIT GROUP HOLDINGS 1/17/96 5.65 10,000,000 9,879,153 10,000,000 9,879,153
TORONTO DOMINION 1/17/96 5.66 5,000,000 4,939,469 5,000,000 4,939,469
INTERNATIONAL LEASE FINANCE 1/22/96 5.63 5,000,000 4,935,881 5,000,000 4,935,881
ASSOCIATES CORPORATION 1/23/96 5.70 5,000,000 4,934,292 5,000,000 4,934,292
BRITISH GAS 1/24/96 5.67 10,000,000 9,867,700 10,000,000 9,867,700
PROVINCE OF ALBERTA 1/25/96 5.67 5,000,000 4,933,063 5,000,000 4,933,063
AT&T CORPORATION 1/31/96 5.67 10,000,000 9,856,675 10,000,000 9,856,675
NATIONAL RURAL UTILITY CORPORATION 2/9/96 5.65 9,250,000 9,104,826 9,250,000 9,104,826
GENERAL ELECTRIC CAPITAL CORPORATION 2/12/96 5.66 5,000,000 4,919,031 5,000,000 4,919,031
PROVINCE OF BRITISH COLUMBIA 2/12/96 5.56 6,000,000 5,904,553 6,000,000 5,904,553
TRANSAMERICA FINANCE 2/15/96 5.62 5,000,000 4,917,261 5,000,000 4,917,261
GENERAL ELECTRIC CAPITAL CORPORATION 2/16/96 5.65 11,954,000 11,753,256 11,954,000 11,753,256
ALCATEL-ALSTHOM INCORPORATED 2/21/96 5.64 10,000,000 9,824,533 10,000,000 9,824,533
AMERITECH CAPITAL CORPORATION 3/5/96 5.63 16,000,000 15,687,222 16,000,000 15,687,222
PROVINCE OF QUEBEC 3/6/96 5.58 10,000,000 9,804,700 10,000,000 9,804,700
GOLDMAN SACHS GROUP L.P. 3/18/96 5.62 10,000,000 9,784,567 10,000,000 9,784,567
TORONTO DOMINION 3/19/96 5.49 5,000,000 4,894,013 5,000,000 4,894,013
BANK NOTE
FCC NATIONAL BANK 11/1/96 5.65 4,000,000 3,997,280 4,000,000 3,997,280
FCC NATIONAL BANK 8/21/96 5.90 5,000,000 4,996,151 5,000,000 4,996,151
CASH EQUIVALENTS
TIME DEPOSITS
BANQUE PARIBAS 11/1/95 5.88 25,000,000 25,000,000 25,000,000 25,000,000
SUMITOMO BANK 11/1/95 5.88 25,000,000 25,000,000 25,000,000 25,000,000
MASTER NOTES
ASSOCIATES CORPORATION OF NORTH AMERICA 11/1/95 5.71 1,120 1,120 1,120 1,120
STUDENT LOAN MARKETING ASSOCIATION 11/1/95 5.60 3,819,000 3,819,000 3,819,000 3,819,000
REPURCHASE AGREEMENTS
HONG KONG SHANGHAI BANK CORPORATION 11/1/95 5.85 35,000,000 35,000,000 35,000,000 35,000,000
MERRILL LYNCH 11/1/95 5.85 46,165,900 46,165,900 46,165,900 46,165,900
MORGAN STANLEY 11/1/95 5.85 35,000,000 35,000,000 35,000,000 35,000,000
SWISS BANK 11/1/95 5.95 16,834,000 16,834,000 16,834,000 16,834,000
---------- ---------- ---------- ----------- ---------- ----------
TOTALS 595,363,661 591,845,176 244,165,900 242,941,744 839,529,561 834,786,921
=========== =========== =========== =========== =========== ==========
</TABLE>
<PAGE>
CoreFund Treasury Reserve Fund
Conestoga US Treasury Securities Fund
Pro-Forma Combined Schedule of Investments
October 31, 1995
(Unaudited)
<TABLE>
<CAPTION>
Core Fund Conestoga Pro-forma Combined
Security Description Maturity Coupon Par Value Par Value Par Value
<S> <C> <C> <C> <C> <C> <C>
U.S. GOVERNMENT SECURITIES
U.S. TREASURY BILLS
UNITED STATES TREASURY BILL 11/9/95 5.660-5.720 5,000,000 4,993,711 10,000,000 9,987,267 15,000,000 14,980,978
UNITED STATES TREASURY BILL 11/16/95 5.715-6.620 8,000,000 7,979,819 8,000,000 7,979,819
UNITED STATES TREASURY BILL 11/24/95 5.365 5,000,000 4,982,862 5,000,000 4,982,862
UNITED STATES TREASURY BILL 12/7/95 5.405 5,000,000 4,972,975 5,000,000 4,972,975
UNITED STATES TREASURY BILL 12/14/95 5.330 5,000,000 4,968,168 5,000,000 4,968,168
UNITED STATES TREASURY BILL 12/21/95 5.400-5.415 5,000,000 4,962,397 20,000,000 19,850,000 25,000,000 24,812,397
UNITED STATES TREASURY BILL 1/4/96 5.340-5.445 5,000,000 4,951,600 25,000,000 24,762,667 30,000,000 29,714,267
UNITED STATES TREASURY BILL 1/11/96 5.310-5.830 5,000,000 4,946,257 30,000,000 29,673,598 35,000,000 34,619,855
UNITED STATES TREASURY BILL 1/18/96 5.370 5,000,000 4,941,825 5,000,000 4,941,825
UNITED STATES TREASURY BILL 2/1/96 5.470 5,000,000 4,930,106 5,000,000 4,930,106
UNITED STATES TREASURY BILL 2/8/96 5.290-5.780 10,000,000 9,854,319 10,000,000 9,850,950 20,000,000 19,705,269
UNITED STATES TREASURY BILL 2/15/96 5.355 5,000,000 4,921,163 5,000,000 4,921,163
UNITED STATES TREASURY BILL 2/22/96 5.290 7,000,000 6,883,767 7,000,000 6,883,767
UNITED STATES TREASURY BILL 3/7/96 5.300-5.340 11,000,000 10,793,360 15,000,000 14,719,542 26,000,000 25,512,902
UNITED STATES TREASURY BILL 3/14/96 5.290 10,000,000 9,803,094 10,000,000 9,803,094
UNITED STATES TREASURY BILL 3/14/96 5.310 8,700,000 8,528,045 8,700,000 8,528,045
UNITED STATES TREASURY BILL 3/21/96 5.310 10,000,000 9,792,025 10,000,000 9,792,025
UNITED STATES TREASURY BILL 4/4/96 5.310-6.020 10,000,000 9,767,607 20,000,000 19,532,202 30,000,000 29,299,809
UNITED STATES TREASURY BILL 4/11/96 5.320 5,500,000 5,368,330 5,500,000 5,368,330
UNITED STATES TREASURY BILL 4/18/96 5.300 10,000,000 9,751,194 10,000,000 9,751,194
UNITED STATES TREASURY BILL 5/2/96 5.475-5.540 5,000,000 4,860,844 10,000,000 9,718,383 15,000,000 14,579,227
UNITED STATES TREASURY BILL 7/25/96 5.540 5,000,000 4,794,558 5,000,000 4,794,558
U.S. TREASURY NOTES
UNITED STATES TREASURY NOTE 11/30/95 4.250 20,000,000 19,974,139 20,000,000 19,974,139
UNITED STATES TREASURY NOTE 2/29/96 7.500 10,000,000 10,061,505 10,000,000 10,061,505
UNITED STATES TREASURY NOTE 4/30/96 5.500 10,000,000 9,979,648 10,000,000 9,979,648
UNITED STATES TREASURY NOTE 4/30/96 7.625 10,000,000 10,095,545 10,000,000 10,095,545
U.S. TREASURY STRIPS
UNITED STATES TREASURY STRIP 11/15/95 10,000,000 9,978,950 10,000,000 9,978,950
UNITED STATES TREASURY STRIP 5/15/96 5,000,000 4,852,920 5,000,000 4,852,920
UNITED STATES TREASURY STRIP 5/15/96 6,000,000 5,810,047 6,000,000 5,810,047
UNITED STATES TREASURY STRIP 5/15/96 5,000,000 4,854,447 5,000,000 4,854,447
REPURCHASE AGREEMENTS
AUBREY LANSTON 11/1/95 5.850 51,000,000 51,000,000 51,000,000 51,000,000
HONG KONG SHANGHAI BANK 11/1/95 5.850 31,000,000 31,000,000 31,000,000 31,000,000
NATIONS BANK 11/1/95 5.875 55,000,000 55,000,000 55,000,000 55,000,000
SANWA BANK 11/1/95 5.850 40,000,000 40,000,000 40,000,000 40,000,000
SWISS BANK 11/1/95 5.950 17,848,000 17,848,000 17,848,000 17,848,000
REPUBLIC BANK OF NEW YORK 11/1/95 5.850 42,000,000 42,000,000 42,000,000 42,000,000
MORGAN STANLEY 11/1/95 5.850 39,000,000 39,000,000 39,000,000 39,000,000
FIRST NATIONAL BANK OF CHICAGO 11/1/95 5.850 33,000,000 33,000,000 33,000,000 33,000,000
BZW 11/1/95 5.850 50,000,000 50,000,000 50,000,000 50,000,000
MERRILL TRI-PARTY 11/1/95 5.850 49,571,400 49,571,400 49,571,400 49,571,400
MORGAN STANLEY 11/1/95 5.850 85,000,000 85,000,000 85,000,000 85,000,000
HSBC 11/1/95 5.850 85,000,000 85,000,000 85,000,000 85,000,000
----------- ----------- ----------- ----------- ----------- -----------
TOTALS 495,048,000 492,594,075 449,571,400 447,275,157 944,619,400 939,869,233
=========== =========== =========== =========== =========== ===========
</TABLE>
<PAGE>
CoreFund Value Equity
Conestoga Equity Fund
Pro-forma Schedule of Investments
31-Oct-95
<TABLE>
<CAPTION>
CoreFund Conestoga Pro-forma Combined
Market Market Market
Security Description Shares Value Shares Value Shares Value
<S> <C> <C> <C> <C> <C> <C>
COMMON STOCKS
BUILDING AND CONSTRUCTION
OWENS CORNING FIBERGLASS CORPORATION 46,910 1,987,811 46,910 1,987,811
OWENS - ILLINOIS INCORPORATED 119,455 1,508,119 119,455 1,508,119
SHERWIN WILLIAMS COMPANY 14,500 545,563 14,500 545,563
STANLEY WORKS 20,800 993,200 20,800 993,200
CHEMICALS AND DRUGS -- --
AMERICAN HOME PRODUCTS 14,000 1,240,750 14,000 1,240,750
CAREMARK INTERNATIONAL INCORPORATED 60,000 1,237,500 23,200 478,500 83,200 1,716,000
CARTER-WALLACE INCORPORATED 55,300 580,650 55,300 580,650
COLUMBIA/HCA HEALTHCARE CORPORATION 25,000 1,228,125 25,000 1,228,125
CORAM HEALTHCARE CORPORATION 100,000 400,000 100,000 400,000
DOW CHEMICAL COMPANY 25,525 1,751,653 25,525 1,751,653
ELAN CORPORATION 35,000 1,404,375 111,100 4,457,888 146,100 5,862,263
ELI LILLY AND COMPANY 8,000 773,000 8,000 773,000
FIRST ALERT INCORPORATED 33,800 523,900 33,800 523,900
FMC CORPORATION 11,500 823,688 11,500 823,688
FOUNDATION HEALTH CORPORATION 53,704 2,275,707 53,704 2,275,707
HERCULES INCORPORATED 5,100 272,213 5,100 272,213
HUMANA INCORPORATED 122,300 2,583,588 122,300 2,583,588
IMC GLOBAL, INCORPORATED 36,600 2,562,000 36,600 2,562,000
MERCK AND COMPANY INCORPORATED 15,000 862,500 45,805 2,633,788 60,805 3,496,288
MONSANTO COMPANY 32,500 3,404,375 32,500 3,404,375
PRAXAIR INCORPORATED 155,000 4,185,000 155,000 4,185,000
UNITED STATES SURGICAL CORPORATION 37,557 920,147 37,557 920,147
UPJOHN COMPANY 15,900 806,925 15,900 806,925
CONSUMER PRODUCTS -- --
BED BATH & BEYOND INCORPORATED 7,600 237,500 7,600 237,500
BURLINGTON INDUSTRIES INCORPORATED 49,771 553,702 49,771 553,702
CML GROUP INCORPORATED 275,000 1,581,250 275,000 1,581,250
GENERAL ELECTRIC COMPANY 180,000 11,385,000 180,000 11,385,000
HASBRO INCORPORATED 50,000 1,525,000 50,000 1,525,000
HEILIG-MEYERS COMPANY 44,800 823,200 44,800 823,200
IBP INCORPORATED 38,200 2,287,225 38,200 2,287,225
INTERNATIONAL PAPER COMPANY 50,000 1,850,000 50,000 1,850,000
KELLWOOD COMPANY 49,800 933,750 49,800 933,750
KIMBERLY CLARK CORPORATION 10,000 726,250 10,000 726,250
MGM GRAND INCORPORATED 43,870 1,047,396 43,870 1,047,396
NEWS CORPORATION -- PREFERRED SHARES ADR 72,915 1,330,699 72,915 1,330,699
PHILIP MORRIS COMPANIES INCORPORATED 173,860 14,691,170 173,860 14,691,170
SCOTT PAPER 6,000 319,500 6,000 319,500
DURABLE GOODS -- --
ALLIED SIGNAL INCORPORATED 24,500 1,041,250 84,775 3,602,938 109,275 4,644,188
APPLE COMPUTER INCORPORATED 94,000 3,413,375 94,000 3,413,375
AUTOTOTE CORPORATION CLASS A 90,230 270,690 90,230 270,690
BEVERLY ENTERPRISES INCORPORATED 136,600 1,605,050 136,600 1,605,050
BOEING COMPANY 11,200 735,000 27,310 1,792,219 38,510 2,527,219
BOMBAY COMPANY 50,000 293,750 50,000 293,750
BRUNSWICK CORPORATION 80,800 1,575,600 80,800 1,575,600
BURLINGTON NORTHERN SANTA FE 30,000 2,516,250 30,000 2,516,250
CASE EQUIPMENT CORPORATION 55,000 2,096,875 55,000 2,096,875
CATERPILLAR INCORPORATED 33,700 1,891,413 33,700 1,891,413
CELLULAR COMMUNICATIONS PREFERRED 23,866 1,279,814 23,866 1,279,814
CELLULAR COMMUNICATIONS -- CLASS A 24,773 1,328,452 24,773 1,328,452
COMMUNITY PSYCHIATRIC 48,400 526,350 48,400 526,350
COMPAQ COMPUTER CORPORATION 57,500 3,205,625 57,500 3,205,625
COMPUTER ASSOCIATES INTERNATIONAL INC 52,500 2,887,500 52,500 2,887,500
DARDEN RESTAURANTS INCORPORATED 619,000 7,041,125 619,000 7,041,125
DEERE AND COMPANY 40,000 3,575,000 40,000 3,575,000
DIGITAL EQUIPMENT CORPORATION 84,750 4,587,094 84,750 4,587,094
FHP INTERNATIONAL CORPORATION 45,000 1,091,250 45,000 1,091,250
FLIGHT SAFETY INTERNATIONAL INCORPORATED 20,000 955,000 20,000 955,000
FORD MOTOR COMPANY 205,000 5,893,750 205,000 5,893,750
FRANKLIN RESOURCES, INCORPORATED 12,000 609,000 12,000 609,000
GENERAL INSTRUMENT CORPORATION 51,800 984,200 51,800 984,200
GOODYEAR TIRE AND RUBBER COMPANY 245,000 9,310,000 245,000 9,310,000
HARNISCHFEGER INDUSTRIES 40,000 1,260,000 40,000 1,260,000
HEWLETT PACKARD COMPANY 14,330 1,327,316 14,330 1,327,316
INTEL CORPORATION 73,400 5,128,825 73,400 5,128,825
INTERNATIONAL BUSINESS MACHINES CORPORATION 98,000 9,530,500 98,000 9,530,500
INTERNATIONAL GAME TECHNOLOGY 146,358 1,701,412 146,358 1,701,412
LOCKHEED MARTIN CORPORATION 25,401 1,730,443 25,401 1,730,443
LORAL CORPORATION 25,000 740,625 25,000 740,625
LOWE'S COMPANIES INCORPORATED 159,200 4,298,400 159,200 4,298,400
MAGNA INTERNATIONAL, CLASS A 27,500 1,189,375 27,500 1,189,375
MANPOWER INCORPORATED 116,000 3,146,500 116,000 3,146,500
MAYTAG CORPORATION 85,800 1,630,200 85,800 1,630,200
MCDONNELL DOUGLAS CORPORATION 21,717 1,775,365 21,717 1,775,365
MICHAEL FOODS INCORPORATED 3,726 45,178 3,726 45,178
MICRON TECHNOLOGY INCORPORATED 24,500 1,730,313 24,500 1,730,313
MOTOROLA INCORPORATED 32,175 2,111,484 32,175 2,111,484
MYLAN LABORATORIES 63,100 1,198,900 63,100 1,198,900
NABISCO HOLDINGS CORP -- CLASS A 179,500 4,824,063 179,500 4,824,063
NATIONAL SEMICONDUCTOR CORPORATION 76,000 1,852,500 76,000 1,852,500
NOVELL INCORPORATED 56,435 931,178 56,435 931,178
PEP BOYS -- MANNY MOE AND JACK 100,000 2,187,500 100,000 2,187,500
POTASH CORPORATION OF SASKATCHEWAN 49,400 3,439,475 49,400 3,439,475
PRESIDENT CASINOS INCORPORATED 31,325 95,933 31,325 95,933
PYXIS CORPORATION 24,839 313,592 24,839 313,592
QUALCOMM INCORPORATED 65,000 2,502,500 65,000 2,502,500
RALLY'S HAMBURGERS INCORPORATED 18,426 34,549 18,426 34,549
RJR NABISCO HOLDINGS CORPORATION 256,160 7,876,920 256,160 7,876,920
ROCKWELL INTERNATIONAL CORPORATION 18,000 801,000 18,000 801,000
SBC COMMUNICATIONS INC 80,000 4,470,000 80,000 4,470,000
SUNDSTRAND CORPORATION 10,300 630,875 10,300 630,875
TEXAS INSTRUMENTS INCOPORATED 13,100 894,075 13,100 894,075
TEXTRON INCOPORATED 30,000 2,062,500 30,000 2,062,500
TRANSPORT HOLDINGS INC CL-A 625 24,531 625 24,531
TRIPOS INCORPORATED 1 7 1 7
UNITED TECHNOLOGIES CORPORATION 16,500 1,464,375 16,500 1,464,375
UNIVERSAL CORPORATION -- VA 21,770 457,170 21,770 457,170
VICORP RESTAURANTS INCORPORATED 61,534 676,874 61,534 676,874
VLSI TECHNOLOGY INC. 40,000 940,000 40,000 940,000
VONS COMPANY 23,000 583,625 23,000 583,625
WEBB DEL E CORPORATION 105,000 2,178,750 105,000 2,178,750
WESTERN ATLAS INC. 15,300 671,288 15,300 671,288
WESTINGHOUSE ELECTRIC CORPORATION 235,000 3,319,375 235,000 3,319,375
XEROX CORPORATION 13,000 1,686,750 13,000 1,686,750
FINANCIAL -- --
AETNA LIFE AND CASUALTY COMPANY 30,000 2,111,250 30,000 2,111,250
BANK OF BOSTON CORPORATION 74,000 3,293,000 74,000 3,293,000
BANKAMERICA CORPORATION 196,900 11,321,750 196,900 11,321,750
CHASE MANHATTAN CORPORATION 206,600 11,776,200 206,600 11,776,200
CHEMICAL BANKING CORPORATION 103,000 5,858,125 103,000 5,858,125
CIGNA CORPORATION 30,000 2,973,750 30,000 2,973,750
CITICORP INCORPORATED 99,000 6,422,625 99,000 6,422,625
DEAN WITTER DISCOVER & COMPANY 89,013 4,428,397 89,013 4,428,397
EQUITABLE COMPANIES INC. 195,500 4,154,375 195,500 4,154,375
FLEET FINANCIAL GROUP 55,000 2,131,250 55,000 2,131,250
HOUSEHOLD INTERNATIONAL INCORPORATED 38,000 2,137,500 38,000 2,137,500
MBNA CORPORATION 62,900 2,319,438 62,900 2,319,438
MERRILL LYNCH AND COMPANY 8,000 444,000 8,000 444,000
PAINE WEBBER GROUP INCORPORATED 35,000 770,000 35,000 770,000
PARK NATIONAL CORPORATION 8,000 362,000 8,000 362,000
PNC BANK CORPORATION 50,000 1,312,500 50,000 1,312,500
PROGRESSIVE CORPORATION OHIO 15,000 622,500 15,000 622,500
THE TRAVELERS GROUP, INC 125,000 6,312,500 125,000 6,312,500
UNITED HEALTHCARE CORPORATION 9,850 523,281 9,850 523,281
METALS AND MINING -- --
COLLECTIBLES & PRECIOUS METAL -- --
BIRMINGHAM STEEL CORPORATION 8,070 123,068 8,070 123,068
JAN BELL MARKETING 80,480 271,620 80,480 271,620
PHELPS DODGE CORPORATION 46,600 2,953,275 46,600 2,953,275
USX CORPORATION -- U.S. STEEL GROUP 100,100 2,990,488 100,100 2,990,488
OIL-ENERGY -- --
ANADARKO PETROLEUM CORPORATION 37,600 1,630,900 37,600 1,630,900
ASHLAND INCORPORATED -- NEW 100,000 3,162,500 100,000 3,162,500
ATLANTIC RICHFIELD COMPANY 7,000 747,250 7,000 747,250
BAKER HUGHES INCORPORATED 90,000 1,766,250 90,000 1,766,250
BRITISH PETROLEUM PLC 92,000 8,119,000 92,000 8,119,000
DIAMOND SHAMROCK INCORPORATED 31,750 817,563 31,750 817,563
ENRON CORPORATION 10,000 343,750 85,000 2,921,875 95,000 3,265,625
MCDERMOTT INTERNATIONAL INCORPORATED 30,635 486,331 30,635 486,331
MOBIL CORPORATION 78,600 7,918,950 78,600 7,918,950
REPSOL S.A. 161,500 4,784,438 161,500 4,784,438
ROYAL DUTCH PETROLEUM COMPANY 53,550 6,579,956 53,550 6,579,956
TOSCO CORPORATION 57,700 1,990,650 57,700 1,990,650
RETAIL -- --
BORDER GROUP INCORPORATED 187,000 3,202,375 187,000 3,202,375
CIRCUIT CITY STORES 30,900 1,031,288 30,900 1,031,288
FRUIT OF THE LOOM 75,000 1,303,125 75,000 1,303,125
KROGER COMPANY 169,505 5,657,229 169,505 5,657,229
SEARS ROEBUCK AND COMPANY 28,200 958,800 28,200 958,800
WENDY'S INTERNATIONAL INCORPORATED 40,000 795,000 40,000 795,000
UTILITIES
BROWNING FERRIS INDUSTRIES 125,000 3,640,625 125,000 3,640,625
CENTRAL AND SOUTH WEST CORPORATION 124,200 3,322,350 124,200 3,322,350
CONSOLIDATED EDISON COMPANY 142,000 4,313,250 142,000 4,313,250
MCI COMMUNICATIONS CORPORATION 178,475 4,450,720 178,475 4,450,720
PACIFIC GAS AND ELECTRIC COMPANY 120,800 3,548,500 120,800 3,548,500
PECO ENERGY COMPANY 200,000 5,850,000 200,000 5,850,000
SCECORP 425,000 7,225,000 425,000 7,225,000
WORLDCOM INCORPORATED 350,100 11,422,013 350,100 11,422,013
MISCELLANEOUS -- --
BUENOS AIRES EMBOTELLADO-ADR 27,355 625,746 27,355 625,746
CONRAIL INCORPORATED 10,000 687,500 10,000 687,500
CSX CORPORATION 28,600 2,395,250 28,600 2,395,250
ITT CORPORATION 40,000 4,900,000 40,000 4,900,000
NOVACARE CORPORATION 25,964 162,275 25,964 162,275
YPF SOCIEDAD ANONIMA 72,385 1,239,593 72,385 1,239,593
AMERICAN DEPOSITORY RECEIPT -- --
PHILIPS ELECTRONICS 75,000 2,896,875 75,000 2,896,875
TEVA PHARMACEUTICAL INDUSTRIES LIMITED 32,672 1,282,376 32,672 1,282,376
CORPORATE BONDS -- --
DOMESTIC CP -- --
AMERICAN EXPRESS 3,336,000 3,336,000 3,336,000 3,336,000
CASH EQUIVALENTS -- --
REPURCHASE AGREEMENTS -- --
SWISS BANK 355,000 355,000 355,000 355,000
HONG KONG SHANGHAI BANK CORPORATION 355,000 355,000 355,000 355,000
--------- ---------- ---------- ----------- ---------- -----------
TOTALS 1,703,401 33,961,457 14,371,601 385,182,148 16,075,002 419,143,605
========= ========== ========== =========== ========== ===========
</TABLE>
<PAGE>
CoreFund Tax-Free Reserve Fund
Conestoga Tax-Free Fund
Pro-form Combined Schedule of Investments
31-Oct-95
<TABLE>
<CAPTION>
CoreFund Conestoga Pro-forma Combined
Security Description Maturity Date Coupon Rate Par Market Value Par Market Value Par Market Value
<S> <C> <C> <C> <C> <C> <C> <C> <C>
ANTICIPATION NOTES
RHODE ISLAND STATE 6/28/96 4.50 3,000,000 $3,016,679 3,000,000 $3,016,679
TEXAS STATE 8/30/96 4.75 1,000,000 $1,005,577 1,000,000 1,005,577
TEXAS STATE 8/30/96 4.75 1,000,000 1,005,985 1,000,000 1,005,985
PRE-REFUNDED SECURITIES - -
EASTERN MUNICIPAL AGENCY,
NORTH CAROLINA* 11/1/95 7.75 2,000,000 2,069,515 2,000,000 2,069,515
PIEDMONT, SOUTH CAROLINA* 11/1/95 9.70 500,000 519,510 500,000 519,510
GENERAL OBLIGATIONS - -
HAWAII STATE 2/1/96 3.85 750,000 750,265 750,000 750,265
MASSACHUSETTS STATE* 11/1/95 3.70 600,000 600,000 600,000 600,000
MANCHESTER, NEW HAMSHIRE 11/1/96 5.50 1,945,000 1,976,178 1,945,000 1,976,178
OREGON STATE* 11/1/95 4.20 500,000 500,000 500,000 500,000
SAN ANTONIO, TEXAS* 11/1/04 8.00 1,700,000 1,700,000 1,700,000 1,700,000
TAX EXEMPT COMMERCIAL PAPER - -
VALDEZ, ALASKA 1/16/96 3.80 2,000,000 2,000,000 2,000,000 2,000,000
VALDEZ, ALASKA 1/31/96 3.75 1,200,000 1,200,000 1,200,000 1,200,000
MONTGOMERY, ALABAMA 1/11/96 3.75 2,000,000 2,000,000 2,000,000 2,000,000
ALABAMA HOUSING 11/9/95 3.80 500,000 500,000 500,000 500,000
ALABAMA HOUSING 12/1/95 3.65 2,000,000 2,000,000 2,000,000 2,000,000
MESA MUNICIPAL DEVELOPEMENT,
ARIZONA 12/6/95 3.80 3,000,000 3,000,000 3,000,000 3,000,000
FLAGSTAFF, ARIZONA 12/5/95 3.50 250,000 250,000 250,000 250,000
SUNSHINE STATE, FLORIDA 12/1/95 3.90 1,200,000 1,200,000 1,200,000 1,200,000
BURKE COUNTY, GEORGIA 12/7/95 3.75 2,400,000 2,400,000 2,400,000 2,400,000
ST COUNTY HONOLULU HAWAII 12/5/95 3.80 1,500,000 1,500,000 1,500,000 1,500,000
SULLIVAN, INDIANA 12/11/95 3.75 300,000 300,000 300,000 300,000
JASPER COUNTY, INDIANA 1/9/96 3.80 500,000 500,000 500,000 500,000
JASPER COUNTY, INDIANA 1/10/96 3.80 690,000 690,000 690,000 690,000
JASPER COUNTY, INDIANA 1/12/95 3.80 700,000 700,000 700,000 700,000
SULLIVAN, INDIANA 2/9/96 3.90 600,000 600,000 600,000 600,000
SULLIVAN, INDIANA 2/1/96 3.85 1,000,000 1,000,000 1,000,000 1,000,000
BURLINGTON, KANSAS 12/13/95 3.85 1,500,000 1,500,000 1,500,000 1,500,000
BURLINGTON, KANSAS 11/15/95 3.75 1,450,000 1,450,000 1,450,000 1,450,000
BURLINGTON, KANSAS 12/6/95 3.85 2,000,000 2,000,000 2,000,000 2,000,000
BURLINGTON, KANSAS 2/9/96 3.90 400,000 400,000 400,000 400,000
BURLINGTON, KANSAS 11/28/95 3.90 1,000,000 1,000,000 1,000,000 1,000,000
JEFFERSON COUNTY, KENTUCKY 11/20/95 3.80 2,200,000 2,200,000 2,200,000 2,200,000
ROCHESTER, MINNESOTA 11/9/95 3.15 1,100,000 1,100,000 1,100,000 1,100,000
ROCHESTER MINNESOTA 1/22/96 3.80 1,500,000 1,500,000 1,500,000 1,500,000
INDEPENDENCE MS WASTE 11/3/95 3.50 2,000,000 2,000,000 2,000,000 2,000,000
DELTA COUNTY, MISSOURI 11/21/95 3.75 1,300,000 1,300,000 1,300,000 1,300,000
MISSOURI STATE 11/21/95 3.85 1,500,000 1,500,000 1,500,000 1,500,000
NORTH CAROLINA MUNICIPAL POWER 1/24/96 3.75 2,000,000 2,000,000 2,000,000 2,000,000
OHIO STATE AIR QUALITY 11/6/95 3.70 3,000,000 3,000,000 3,000,000 3,000,000
DELAWARE COUNTY, PENNSYLVANIA 11/2/95 3.60 1,500,000 1,500,000 1,500,000 1,500,000
MONTGOMERY COUNTY, PENNSYLVANIA 12/7/95 3.80 300,000 300,000 300,000 300,000
BEAVER COUNTY, PENNSYLVANIA 1/24/96 3.75 2,000,000 2,000,000 2,000,000 2,000,000
TEXAS A & M 12/8/95 3.80 1,500,000 1,500,000 1,500,000 1,500,000
DALLS/FT. WORTH, TEXAS 11/1/95 3.60 1,900,000 1,900,000 1,900,000 1,900,000
CHESAPEAKE, VIRGINIA 11/6/95 3.60 1,000,000 1,000,000 1,000,000 1,000,000
PENNINSULA PORTS, VIRGINIA 11/7/95 3.65 1,000,000 1,000,000 1,000,000 1,000,000
SEATTLE LIGHT & POWER 11/8/95 3.50 1,000,000 1,000,000 1,000,000 1,000,000
SEATTLE LIGHT & POWER, WASHINGTON 11/9/95 3.65 1,000,000 1,000,000 1,000,000 1,000,000
CONVERSE, WYOMING 11/6/95 3.50 1,000,000 1,000,000 1,000,000 1,000,000
GILLETTE COUNTY, WYOMING 11/17/95 3.70 1,000,000 1,000,000 1,000,000 1,000,000
LINCOLN COUNTY, WYOMING 11/21/95 3.70 1,400,000 1,400,000 1,400,000 1,400,000
SWEETWATER COUNTY, WYOMING 12/8/95 3.65 2,500,000 2,500,000 2,500,000 2,500,000
REVENUE BONDS - -
ALABAMA STATE* 11/1/95 3.85 900,000 900,000 900,000 900,000
MCINTOSH, ALABAMA* 11/1/95 4.00 400,000 400,000 400,000 400,000
STEVENSON, ALABAMA* 11/1/95 3.90 600,000 600,000 600,000 600,000
WINFIELD, ALABAMA* 11/1/95 3.85 1,800,000 1,800,000 1,800,000 1,800,000
SANTA CLARA, CALIFORNIA* 11/1/95 3.70 370,000 370,000 370,000 370,000
COLORADO STATE* 11/2/95 3.90 1,955,000 1,955,000 1,955,000 1,955,000
WILMINGTON, DELAWARE* 11/1/95 3.90 100,000 100,000 100,000 100,000
WILMINGTON, DELEWARE* 11/1/95 3.90 100,000 100,000 100,000 100,000
DISTRICT OF COLUMBIA* 11/1/95 3.95 2,835,000 2,835,000 2,835,000 2,835,000
DADE COUNTY, FLORIDA* 11/1/95 4.15 1,200,000 1,200,000 1,200,000 1,200,000
HILLSBOROUGH, FLORIDA* 11/1/95 4.00 700,000 700,000 700,000 700,000
CHICAGO, ILLINOIS* 11/1/95 3.90 1,200,000 1,200,000 1,200,000 1,200,000
DES MOINES, IOWA* 11/1/95 3.90 400,000 400,000 400,000 400,000
ILLINOIS STATE* 11/1/95 4.00 700,000 700,000 700,000 700,000
GARY, INDIANA* 11/15/95 3.90 1,600,000 1,600,000 1,600,000 1,600,000
HAMMOND, INDIANA* 11/1/95 3.90 200,000 200,000 200,000 200,000
WICHITA, KANSAS* 11/1/95 4.15 100,000 100,000 100,000 100,000
LOUISIANA STATE* 11/1/95 3.90 1,565,000 1,565,000 1,565,000 1,565,000
PARISH OF DESOTA, LOUISIANA* 11/1/95 3.80 700,000 700,000 700,000 700,000
JEFFERSON PARISH, LOUISIANA* 11/1/95 3.95 800,000 800,000 800,000 800,000
CORNELL TOWNSHIP, MICHIGAN* 11/1/95 3.80 200,000 200,000 200,000 200,000
DELTA COUNTY, MICHIGAN* 11/1/95 4.00 1,700,000 1,700,000 1,700,000 1,700,000
MICHIGAN STATE* 11/1/95 3.90 100,000 100,000 100,000 100,000
MICHIGAN STATE* 11/1/95 3.90 1,500,000 1,500,000 1,500,000 1,500,000
ROBBINSDALE, MINNESOTA* 11/1/95 4.00 1,100,000 1,100,000 1,100,000 1,100,000
ROBINSDALE, MINNISOTA* 11/1/95 4.00 1,200,000 1,200,000 1,200,000 1,200,000
SAINT LOUIS PARK, MINNESOTA* 11/1/95 3.80 400,000 400,000 400,000 400,000
MISSOURI STATE 6/1/96 4.00 750,000 750,000 750,000 750,000
KANSAS CITY, MISSOURI* 11/1/95 4.00 700,000 700,000 700,000 700,000
JACKSON COUNTY, MISSISSIPPI* 11/1/95 3.90 1,000,000 1,000,000 1,000,000 1,000,000
PERRY COUNTY, MISSISSIPPI* 11/1/95 3.95 800,000 800,000 800,000 800,000
JACKSON COUNTY, MISSISSIPPI* 11/1/95 3.90 300,000 300,000 300,000 300,000
BILLINGS, MONTANA* 11/1/95 3.95 600,000 600,000 600,000 600,000
FORSYTH, MONTANA* 11/1/95 3.85 600,000 600,000 600,000 600,000
FORSYTH, MONTANA* 11/1/95 3.85 100,000 100,000 100,000 100,000
FORSYTH, MONTANA* 11/1/95 3.85 1,000,000 1,000,000 1,000,000 1,000,000
FORSYTH, MONTANA* 11/1/95 3.85 600,000 600,000 600,000 600,000
FORSYTH, MONTANA* 11/1/95 3.85 200,000 200,000 200,000 200,000
WAKE COUNTY, NORTH CAROLINA* 11/1/95 3.85 400,000 400,000 400,000 400,000
NEVADA STATE* 11/1/95 4.20 500,000 500,000 500,000 500,000
NEW YORK, NEW YORK* 11/1/95 4.00 1,000,000 1,000,000 1,000,000 1,000,000
NEW YORK, NEW YORK* 11/1/95 4.00 300,000 300,000 300,000 300,000
OHIO STATE* 11/1/95 4.00 2,000,000 2,000,000 2,000,000 2,000,000
OHIO STATE* 11/1/95 3.80 100,000 100,000 100,000 100,000
PORT OF PORTLAND, OREGON* 11/1/95 3.90 200,000 200,000 200,000 200,000
PORT OF ST. HELENS, OREGAN* 11/1/95 3.95 1,800,000 1,800,000 1,800,000 1,800,000
PORT ST. HELENS OREGON* 11/1/95 3.95 400,000 400,000 400,000 400,000
UMATILLA COUNTY, OREGON* 11/1/95 3.90 100,000 100,000 100,000 100,000
ALLEGHANY COUNTY, PENNSYLVANIA* 11/2/95 3.85 355,000 355,000 355,000 355,000
ALLEGHENY COUNTY, PENNSYLVANIA* 11/1/95 3.85 1,150,000 1,150,000 1,150,000 1,150,000
BEAVER COUNTY, PENNSYLVANIA* 11/1/95 3.90 100,000 100,000 100,000 100,000
SCHUYKILL COUNTY, PENNSYLVANIA* 11/1/95 4.20 300,000 300,000 300,000 300,000
LEHIGH COUNTY, PENNSYLVANIA* 11/1/95 3.90 300,000 300,000 300,000 300,000
PENNSYLVANIA STATE 11/1/96 4.25 1,560,000 1,567,551 1,560,000 1,567,551
PENNSYLVANIA STATE* 11/1/95 4.00 1,100,000 1,100,000 1,100,000 1,100,000
LANGHORNE, PENNSYLVANIA* 11/1/95 3.80 100,000 100,000 100,000 100,000
WASHINGTON COUNTY, PENNSYLVANIA* 11/1/95 4.00 2,255,000 2,255,000 2,255,000 2,255,000
RHODE ISLAND STATE* 11/1/95 3.95 1,000,000 1,000,000 1,000,000 1,000,000
RICHLAND COUNTY, SOUTH CAROLINA* 11/1/95 4.30 450,000 450,000 450,000 450,000
YORK COUNTY, SOUTH CAROLINA* 11/1/95 3.95 400,000 400,000 400,000 400,000
RAPID CITY, SOUTH DAKOTA* 11/1/95 3.80 765,000 765,000 765,000 765,000
SULLIVAN COUNTY, TENNESSEE* 11/1/95 3.90 1,300,000 1,300,000 1,300,000 1,300,000
CAMP COUNTY, TEXAS* 11/1/95 4.10 500,000 500,000 500,000 500,000
HARRIS COUNTY, TEXAS* 11/1/95 4.00 1,100,000 1,100,000 1,100,000 1,100,000
TEXAS PORT DEVELOPMENT
CORPORATION* 11/1/95 3.85 1,300,000 1,300,000 1,300,000 1,300,000
GRAPEVINE, TEXAS* 11/1/95 3.90 100,000 100,000 100,000 100,000
GRAPEVINE, TEXAS INDUSTRIAL
DEVELOPMENT REVENUE* 11/1/95 3.90 600,000 600,000 600,000 600,000
GRAPEVINE TEXAS* 11/1/95 3.90 100,000 100,000 100,000 100,000
GRAPEVINE, TEXAS* 11/1/95 3.70 800,000 800,000 800,000 800,000
MONTGOMERY COUNTY, TEXAS* 11/1/95 3.95 100,000 100,000 100,000 100,000
NUECES COUNTY, TEXAS* 11/1/95 3.95 1,675,000 1,675,000 1,675,000 1,675,000
PENINSULA, VIRGINIA* 11/1/95 3.80 100,000 100,000 100,000 100,000
VERMONT STATE* 11/1/95 3.90 1,400,000 1,400,000 1,400,000 1,400,000
LAC DU FLAMBEAU, WISCONSIN* 11/1/95 3.85 800,000 800,000 800,000 800,000
WEST VIRGINIA STATE* 11/1/95 4.15 400,000 400,000 400,000 400,000
LINCOLN COUNTY, WYOMING* 11/1/95 4.00 200,000 200,000 200,000 200,000
LINCOLN COUNTY, WYOMING* 11/1/95 4.00 500,000 500,000 500,000 500,000
LINCOLN COUNTY WYOMING* 11/1/95 3.90 1,300,000 1,300,000 1,300,000 1,300,000
SUBLETTE COUNTY, WYOMING* 11/1/95 3.90 200,000 200,000 200,000 200,000
UINTA COUNTY, WYOMING* 11/1/95 3.90 1,800,000 1,800,000 1,800,000 1,800,000
---------- ---------- ---------- ---------- ----------- --------------
TOTALS 71,215,000 71,290,183 61,655,000 61,736,077 132,870,000 133,026,260.27
========== ========== ========== ========== =========== ==============
</TABLE>
* Variable rate security. Rate shown reflects the rate
that was in effect at October 31, 1995.
<PAGE>
CoreFund Intermediate Bond Fund
Conestoga Intermediate Income Fund
Pro-Forma Schedule of Investments
October 31, 1995
(Unaudited)
<TABLE>
<CAPTION>
Core Fund Conestoga Pro-forma Combined
Security Description Maturity Coupon Par Value Par Value Par Value
<S> <C> <C> <C> <C> <C> <C> <C> <C>
U.S. GOVERNMENT SECURITIES
U.S. TREASURY NOTES
UNITED STATES TREASURY NOTE 1/31/97 7.500 4,110,000 4,202,434 4,110,000 4,202,434
UNITED STATES TREASURY NOTE 5/15/97 6.500 7,010,000 7,098,396 7,010,000 7,098,396
UNITED STATES TREASURY NOTE 5/15/97 8.500 700,000 729,190 700,000 729,190
UNITED STATES TREASURY NOTE 7/15/97 8.500 8,670,000 9,067,953 8,670,000 9,067,953
UNITED STATES TREASURY NOTE 8/15/97 6.500 6,890,000 6,989,836 6,890,000 6,989,836
UNITED STATES TREASURY NOTE 8/31/97 6.000 6,575,000 6,617,277 6,575,000 6,617,277
UNITED STATES TREASURY NOTE 11/15/97 7.375 4,000,000 4,130,920 2,420,000 2,499,207 6,420,000 6,630,127
UNITED STATES TREASURY NOTE 2/15/98 8.125 145,000 152,520 145,000 152,520
UNITED STATES TREASURY NOTE 5/15/98 9.000 4,050,000 4,363,551 4,050,000 4,363,551
UNITED STATES TREASURY NOTE 8/15/98 9.250 10,580,000 11,531,248 10,580,000 11,531,248
UNITED STATES TREASURY NOTE 5/31/99 6.750 2,215,000 2,284,197 2,215,000 2,284,197
UNITED STATES TREASURY NOTE 9/30/99 7.125 7,015,000 7,335,796 7,015,000 7,335,796
UNITED STATES TREASURY NOTE 10/15/99 6.000 2,200,000 2,217,556 2,200,000 2,217,556
UNITED STATES TREASURY NOTE 10/31/99 7.500 6,270,000 6,645,573 6,270,000 6,645,573
UNITED STATES TREASURY NOTE 11/30/99 7.750 230,000 246,010 230,000 246,010
UNITED STATES TREASURY NOTE 1/31/00 7.750 3,315,000 3,552,818 3,315,000 3,552,818
UNITED STATES TREASURY NOTE 5/31/00 6.250 1,000,000 1,017,200 1,000,000 1,017,200
UNITED STATES TREASURY NOTE 9/30/00 6.125 2,000,000 2,026,080 2,000,000 2,026,080
UNITED STATES TREASURY NOTE 11/15/01 7.500 14,690,000 15,882,828 14,690,000 15,882,828
UNITED STATES TREASURY NOTE 2/15/05 7.500 2,360,000 2,602,207 2,360,000 2,602,207
UNITED STATES TREASURY NOTE 8/15/05 6.500 3,000,000 3,105,300 3,000,000 3,105,300
CORPORATE SECURITIES
ASSET BACKED SECURITIES
ADVANTA CMO 10/25/09 4.900 1,675,257 1,573,871 1,675,257 1,573,871
BANC ONE CREDIT CARD MASTER
TRUST 1994-A 12/15/98 7.150 1,675,000 1,703,559 1,675,000 1,703,559
CASE EQUIPMENT LOAN TRUST 9/15/00 5.950 1,000,000 1,001,600 1,000,000 1,001,600
DAIMLER-BENZ GRANTOR TRUST
1993-A-A 10/15/98 3.900 610,288 601,927 610,288 601,927
DISCOVER CARD MASTER TRUST I 4/16/02 6.065 2,000,000 2,000,600 2,000,000 2,000,600
FORD CREDIT GRANTOR TRUST 5/15/99 6.350 1,255,289 1,260,511 1,255,289 1,260,511
PREMIER AUTO TRUST 9/15/97 6.375 15,451 15,472 15,451 15,472
PREMIER AUTO TRUST 2/4/98 7.850 2,000,000 2,057,200 2,000,000 2,057,200
PREMIER AUTO TRUST 5/2/98 6.450 1,625,000 1,638,569 1,625,000 1,638,569
PREMIER AUTO TRUST 9/4/98 7.850 870,000 894,882 870,000 894,882
SEARS CREDIT ACCOUNT MASTER
TRUST 10/15/04 7.000 3,000,000 3,103,800 3,000,000 3,103,800
STANDARD CREDIT CARD MASTER
TRUST 6/7/00 6.750 2,000,000 2,035,320 2,000,000 2,035,320
CORPORATE BONDS
AMERICAN EXPRESS MASTER TRUST 8/15/99 7.150 1,000,000 1,030,700 1,000,000 1,030,700
ASSOCIATES CORPORATION NA 8/15/98 6.375 1,500,000 1,509,375 1,500,000 1,509,375
BEAR STEARNS CO. 10/1/05 6.875 710,000 709,113 710,000 709,113
CARTER HOLT HARVEY LTD. 12/1/04 8.875 1,120,000 1,276,800 1,120,000 1,276,800
CHASE MANHATTEN BANK 8/1/05 6.500 695,000 677,625 695,000 677,625
CHRYSLER CORPORATION 8/1/99 10.400 1,095,000 1,162,069 1,095,000 1,162,069
CSR AMERICA INCORPORATED 7/21/05 6.875 1,670,000 1,692,963 1,670,000 1,692,963
DEAN WITTER DISCOVER 3/1/98 6.000 1,250,000 1,248,438 1,250,000 1,248,438
FIRST NATIONAL BANK OF BOSTON 9/15/04 8.000 2,000,000 2,150,000 2,000,000 2,150,000
FORD MOTOR CREDIT CORPORATION 8/15/97 6.800 1,000,000 1,013,750 1,000,000 1,013,750
GREAT LAKES POWER INCORPORATED 12/1/99 8.900 990,000 1,053,113 990,000 1,053,113
JOHN DEERE CAPITAL CORPORATION 9/2/96 4.625 1,500,000 1,484,460 1,500,000 1,484,460
LEHMAN BOTHERS INCORPORATED 10/15/00 9.875 2,000,000 2,262,500 2,000,000 2,262,500
NORWEST FINANCIAL INCORPORATED 2/15/97 6.250 1,500,000 1,507,500 1,500,000 1,507,500
PENN POWER AND LIGHT 5/1/02 7.750 1,280,000 1,358,400 1,280,000 1,358,400
PROVIDENT BANK 6/15/96 5.000 225,000 224,156 225,000 224,156
PROVINCE OF ONTARIO 8/4/05 7.000 1,000,000 1,026,250 1,000,000 1,026,250
SYSTEM ENERGY RESOURCES 9/1/96 10.500 725,000 751,281 725,000 751,281
TRANSCONT GAS 1/15/97 8.125 1,055,000 1,076,100 1,055,000 1,076,100
CORPORATE NOTES
CAPITAL ONE BANK 2/27/98 8.125 800,000 833,000 800,000 833,000
COLONIAL NATIONAL BANK 8/1/03 7.000 1,595,000 1,608,956 1,595,000 1,608,956
SANTANDER FINANCE 4/15/05 7.875 1,625,000 1,734,688 1,625,000 1,734,688
TELE-COMMUN INCORPORATED 1/15/03 8.250 1,600,000 1,672,000 1,600,000 1,672,000
DOMESTIC CP
AMERICAN EXPRESS 11/1/95 5.750 1,567,000 1,567,000 1,567,000 1,567,000
MEDIUM TERM NOTES
ASSOCIATES CORPORATION 5/6/96 4.730 1,000,000 994,900 1,000,000 994,900
BHP FINANCIAL LIMITED 11/1/00 5.625 1,730,000 1,660,800 1,730,000 1,660,800
FIRST USA BANK 9/12/96 6.880 655,000 660,731 655,000 660,731
FLEET FINANCIAL GROUP 7/9/97 7.180 160,000 162,800 160,000 162,800
INTERNATIONAL LEASE CORPORATION 11/14/96 7.830 1,345,000 1,370,528 1,345,000 1,370,528
KN ENERGY INCORPORATED 2/1/96 9.940 300,000 302,625 300,000 302,625
PAINE WEBBER 1/20/04 6.730 750,000 731,250 750,000 731,250
PAINE WEBBER GROUP 9/17/97 6.630 160,000 160,800 160,000 160,800
PHILLIP MORRIS 12/12/95 6.500 250,000 250,000 250,000 250,000
UNITED AIR LINES 12/1/97 6.750 2,435,000 2,425,869 2,435,000 2,425,869
YANKEE BONDS
KOREA DEVELOPMENT BANK 5/1/00 6.250 1,000,000 993,750 1,000,000 993,750
LAIDLAW INCORPORATED 4/15/05 7.875 1,490,000 1,584,988 1,490,000 1,584,988
NORANDA INCORPORATED 6/1/03 8.000 775,000 829,250 775,000 829,250
CMO'S & REMICS
FHLMC 5/15/05 6.500 1,755,000 1,689,082 1,755,000 1,689,082
FHLMC 3/15/07 6.750 1,755,000 1,780,325 1,755,000 1,780,325
FHLMC REMIC 10/15/00 6.500 1,233,257 1,216,460 1,233,257 1,216,460
FHLMC REMIC 11/15/08 6.250 757,299 756,882 757,299 756,882
FHLMC REMIC 2/15/16 6.000 1,725,000 1,712,718 1,725,000 1,712,718
FHLMC REMIC 4/15/18 7.250 205,000 205,482 205,000 205,482
FNMA REMIC 10/25/98 5.500 1,900,000 1,849,479 1,900,000 1,849,479
FNMA REMIC 2/25/03 5.750 1,140,000 1,123,037 1,140,000 1,123,037
FNMA REMIC 1/25/18 7.000 300,000 301,881 300,000 301,881
FNMA REMIC 11/25/20 6.500 947,061 943,168 947,061 943,168
FHLMC MORTGAGES
FHLMC 11/1/08 5.500 2,228,485 2,137,942 2,228,485 2,137,942
FNMA MORTGAGES
FNMA 12/22/97 6.260 3,000,000 3,014,550 3,000,000 3,014,550
FNMA 4/1/07 8.000 506,034 521,215 506,034 521,215
FNMA 7/1/10 6.500 1,808,932 1,794,786 1,808,932 1,794,786
FNMA 10/1/10 6.500 1,360,000 1,349,365 1,360,000 1,349,365
GNMA MORTGAGES
GNMA 9/15/16 9.500 86,079 91,997 86,079 91,997
GNMA 12/15/16 9.500 61,186 65,393 61,186 65,393
GNMA 6/15/20 9.500 77,287 82,601 77,287 82,601
GNMA 7/15/22 8.000 608,706 626,967 608,706 626,967
GNMA 8/15/24 8.500 3,376,150 3,516,463 3,376,150 3,516,463
GNMA 5/15/25 8.000 968,532 997,588 968,532 997,588
REPURCHASE AGREEMENTS
SANWA BANK 11/1/95 5.850 3,427,000 3,427,000 3,427,000 3,427,000
---------- ---------- ----------- ----------- ----------- -----------
TOTALS 56,405,293 57,046,248 131,543,999 137,102,062 187,949,292 194,148,310
========== ========== =========== =========== =========== ===========
</TABLE>
<PAGE>
CoreFund PA Municipal Bond Fund
Conestoga PA Tax-Free Bond Fund
Pro-Forma Combined Schedule of Investments
October 31, 1995
(Unaudited)
<TABLE>
<CAPTION>
Core Fund Conestoga Pro-forma Combined
Security Description Maturity Coupon Par Value Par Value Par Value
<S> <C> <C> <C> <C> <C> <C> <C> <C>
MUNICIPAL BONDS
GENERAL OBLIGATIONS
ABINGTON, PENNSYLVANIA 5/15/20 5.625 100,000 98,000 100,000 98,000
ALLEGHENY COUNTY, PENNSYLVANIA 9/15/10 5.875 60,000 62,175 60,000 62,175
ALLEGHENY COUNTY, PENNSYLVANIA 9/15/13 5.875 100,000 102,375 100,000 102,375
BEDFORD, PENNSYLVANIA 4/15/24 6.200 25,000 25,688 25,000 25,688
CENTRAL BUCKS, PA. 2/1/03 6.600 175,000 190,750 175,000 190,750
CHESTER COUNTY, PENNSYLVANIA 11/15/16 5.625 100,000 98,750 100,000 98,750
CRAWFORD, PENNSYLVANIA 2/15/05 7.000 100,000 115,625 100,000 115,625
DAUPHIN COUNTY, PENNSYLVANIA 8/1/07 5.450 200,000 204,000 200,000 204,000
DELAWARE COUNTY, PENNSYLVANIA 12/1/98 7.100 170,000 175,569 170,000 175,569
DELAWARE COUNTY, PENNSYLVANIA 10/1/15 5.500 75,000 74,063 75,000 74,063
HAMPDEN TOWNSHIP, PENNSYLVANIA 4/1/03 5.350 140,000 145,250 140,000 145,250
HEMPFIELD, PENNSYLVANIA 10/15/14 5.300 250,000 240,625 250,000 240,625
KEYSTONE, PENNSYLVANIA 9/1/06 4.750 240,000 230,700 240,000 230,700
LOWER MERION TOWNSHIP, PENNSYLVANIA 8/1/05 5.625 100,000 104,625 100,000 104,625
MANHEIM, PENNSYLVANIA 5/15/14 6.100 100,000 102,750 100,000 102,750
MONTGOMERY COUNTY, PENNSYLVANIA 10/15/11 5.750 175,000 178,719 175,000 178,719
NAZARETH, PENNSYLVANIA 11/15/12 5.500 200,000 197,822 200,000 197,822
PENNSYLVANIA STATE 9/1/00 6.250 150,000 153,896 150,000 153,896
PENNSYLVANIA STATE 7/1/05 6.000 25,000 26,875 25,000 26,875
PENNSYLVANIA STATE 7/1/11 6.250 60,000 64,650 60,000 64,650
PITTSBURGH, PENNSYLVANIA 9/1/17 6.125 25,000 25,781 25,000 25,781
ROSE TREE/MEDIA, PENNSYLVANIA 2/15/10 5.350 150,000 149,625 150,000 149,625
SENECA VALLEY, PENNSYLVANIA 2/15/15 5.850 105,000 105,919 105,000 105,919
YORK, PENNSYLVANIA 3/1/07 5.600 75,000 76,688 75,000 76,688
REVENUE BONDS
ALLEGHENY COUNTY, PENNSYLVANIA 4/1/01 6.450 200,000 219,000 200,000 219,000
ALLEGHENY COUNTY, PENNSYLVANIA 10/1/03 5.800 140,000 146,300 140,000 146,300
ALLEGHENY COUNTY, PENNSYLVANIA 2/1/07 5.700 15,000 14,925 15,000 14,925
ALLEGHENY COUNTY, PENNSYLVANIA 12/1/09 7.450 130,000 143,163 130,000 143,163
ALLEGHENY COUNTY, PENNSYLVANIA 11/1/12 6.000 25,000 25,688 25,000 25,688
ALLENTOWN, PENNSYLVANIA 7/15/96 5.650 100,000 101,148 100,000 101,148
BERKS COUNTY, PENNSYLVANIA 10/1/06 5.600 65,000 67,438 65,000 67,438
CENTER CITY DISTRICT, PENNSYLVANIA 12/1/08 5.600 60,000 61,800 60,000 61,800
DELAWARE COUNTY, PENNSYLVANIA 8/1/08 5.400 200,000 202,750 200,000 202,750
DOVER TOWNSHIP, PENNSYLVANIA 5/1/12 6.250 20,000 21,250 20,000 21,250
ERIE COUNTY, PENNSYLVANIA 11/1/96 5.850 100,000 101,981 100,000 101,981
GETTYSBURG, PENNSYLVANIA 11/1/95 3.950 100,000 100,000 100,000 100,000
GETTYSBURG, PENNSYLVANIA 2/15/97 5.300 250,000 253,750 250,000 253,750
HARRISBURG, PENNSYLVANIA 9/1/13 5.875 200,000 201,250 200,000 201,250
LEHIGH COUNTY, PENNSYLVANIA 11/1/95 3.850 200,000 200,000 200,000 200,000
LEHIGH COUNTY, PENNSYLVANIA 11/1/21 6.400 25,000 26,344 25,000 26,344
LOWER BURRELL, PENNSYLVANIA 2/1/16 5.125 250,000 233,750 250,000 233,750
LOWER SALFORD TOWNSHIP, PENNSYLVANIA 11/15/20 5.500 100,000 95,750 100,000 95,750
MILLCREEK TOWNSHIP, PENNSYLVANIA 11/1/06 6.000 150,000 159,000 150,000 159,000
MONTGOMERY COUNTY, PENNSYLVANIA 6/1/14 5.125 250,000 231,563 250,000 231,563
NORTH PENN, PENNSYLVANIA 11/1/05 5.800 90,000 94,613 90,000 94,613
NORTH PENN, PENNSYLVANIA 11/1/22 6.200 25,000 25,719 25,000 25,719
NORTH WALES, PENNSYLVANIA 11/1/10 6.750 100,000 114,875 100,000 114,875
NORTH WALES, PENNSYLVANIA 11/1/20 5.600 20,000 19,575 20,000 19,575
NORTHAMPTON COUNTY, PENNSYLVANIA 11/15/18 5.750 150,000 150,375 150,000 150,375
PENNSYLVANIA STATE 9/1/97 6.300 200,000 206,500 200,000 206,500
PENNSYLVANIA STATE 12/1/99 5.100 250,000 257,188 250,000 257,188
PENNSYLVANIA STATE 12/1/01 5.350 250,000 260,313 250,000 260,313
PENNSYLVANIA STATE 1/1/05 6.000 25,000 27,063 25,000 27,063
PENNSYLVANIA STATE 3/1/05 6.150 145,000 156,781 145,000 156,781
PENNSYLVANIA STATE 3/1/05 6.150 40,000 43,250 40,000 43,250
PENNSYLVANIA STATE 12/1/06 5.800 75,000 79,594 75,000 79,594
PENNSYLVANIA STATE 12/1/08 5.900 125,000 130,781 125,000 130,781
PENNSYLVANIA STATE 7/1/09 5.800 250,000 260,625 250,000 260,625
PENNSYLVANIA STATE 12/15/09 6.000 225,000 232,313 225,000 232,313
PENNSYLVANIA STATE 1/1/10 6.000 100,000 104,125 100,000 104,125
PENNSYLVANIA STATE 1/1/12 6.000 100,000 102,875 100,000 102,875
PENNSYLVANIA STATE 7/1/12 6.400 300,000 305,250 300,000 305,250
PENNSYLVANIA STATE 9/1/13 5.850 100,000 102,250 100,000 102,250
PENNSYLVANIA STATE 9/1/16 6.700 75,000 84,938 75,000 84,938
PENNSYLVANIA STATE 10/1/17 5.450 200,000 182,500 200,000 182,500
PENNSYLVANIA STATE HIGHER EDUCATION 7/1/19 6.000 150,000 151,313 150,000 151,313
PHILADELPHIA, PENNSYLVANIA 8/1/03 4.600 250,000 246,563 250,000 246,563
PHILADELPHIA, PENNSYLVANIA 2/15/14 5.250 250,000 235,625 250,000 235,625
PITTSBURGH, PENNSYLVANIA 6/1/21 6.125 115,000 118,738 115,000 118,738
QUAKERTOWN, PENNSYLVANIA 11/1/95 3.750 100,000 100,000 100,000 100,000
SCRANTON-LACKAWANNA, PENNSYLVANIA 3/1/03 6.150 150,000 159,563 150,000 159,563
VENANGO, PENNSYLVANIA 11/1/95 4.600 200,000 200,000 200,000 200,000
WAYNE COUNTY, PENNSYLVANIA 10/1/07 5.350 190,000 185,963 190,000 185,963
--------- --------- --------- --------- --------- ---------
TOTALS 2,930,000 3,045,275 6,800,000 6,851,753 9,730,000 9,897,028
========= ========= ========= ========= ========= =========
</TABLE>
<PAGE>
CoreFund Balanced Fund
Conestoga Balanced Fund
Pro-Forma Combined Schedule of Investments
October 31, 1995
(Unaudited)
<TABLE>
<CAPTION>
CoreFunds Conestoga Pro-Forma Combined
Security Description Maturity Coupon Shares/Par Value Shares/Par Value Shares/Par Value
<S> <C> <C> <C> <C> <C> <C> <C> <C>
COMMON STOCK
AETNA LIFE AND CASUALTY COMPANY 1,200 84,450 1,200 84,450
ALLIED SIGNAL INCORPORATED 3,800 161,500 3,800 161,500
ALLSTATE CORPORATION 462 16,979 462 16,979
ALLTEL CORPORATION 15,000 459,375 15,000 459,375
AMERICAN ELECTRIC POWER INC 1,800 68,625 1,800 68,625
AMERICAN EXPRESS COMPANY 20,000 812,500 20,000 812,500
AMERICAN HOME PRODUCTS 10,000 886,250 10,000 886,250
AMERICAN INTERNATIONAL GROUP INC 6,000 506,250 6,000 506,250
AMGEN INCORPORATED 13,600 652,800 13,600 652,800
AMOCO CORPORATION 7,500 479,063 7,500 479,063
AMPHENOL CORPORATION - CLASS A 30,000 648,750 30,000 648,750
AMSOUTH BANCORP 20,000 797,500 20,000 797,500
APPLE COMPUTER INCORPORATED 3,600 130,725 3,600 130,725
ASHLAND INCORPORATED-NEW 3,500 110,688 3,500 110,688
ATLANTIC RICHFIELD COMPANY 5,875 627,156 5,875 627,156
BAKER HUGHES INCORPORATED 24,000 471,000 3,000 58,875 27,000 529,875
BANK OF BOSTON CORPORATION 2,600 115,700 2,600 115,700
BANKAMERICA CORPORATION 8,300 477,250 8,300 477,250
BARNETT BANKS INCORPORATED 11,000 607,750 11,000 607,750
BELLSOUTH CORPORATION 8,000 612,000 8,000 612,000
BEVERLY ENTERPRISES INCORPORATED 5,100 59,925 5,100 59,925
BIRMINGHAM STEEL CORPORATION 300 4,575 300 4,575
BOEING COMPANY 1,500 98,438 1,500 98,438
BORDER GROUP INCORPORATED 1,000 17,125 1,000 17,125
BRITISH PETROLEUM PLC 4,000 353,000 4,000 353,000
BROWNING FERRIS INDUSTRIES 4,500 131,063 4,500 131,063
BURLINGTON INDUSTRIES INCORPORATED 1,900 21,138 1,900 21,138
BURLINGTON NORTHERN SANTA FE 1,100 92,263 1,100 92,263
BURLINGTON RESOURCES INCORPORATED 12,500 450,000 12,500 450,000
CAREMARK INTERNATIONAL INCORPORATED 900 18,563 900 18,563
CASE EQUIPMENT CORPORATION 2,500 95,313 2,500 95,313
CATERPILLAR INCORPORATED 1,200 67,350 1,200 67,350
CCB FINANCIAL CORP. 12,000 594,000 12,000 594,000
CELLULAR COMMUNICATIONS-CLASS A 2,000 107,250 2,000 107,250
CENTRAL AND SOUTH WEST CORPORATION 4,100 109,675 4,100 109,675
CHASE MANHATTAN CORPORATION 7,800 444,600 7,800 444,600
CHEMICAL BANKING CORPORATION 4,400 250,250 4,400 250,250
CHEVRON CORPORATION 10,000 467,500 10,000 467,500
CHIRON CORPORATION 3,767 342,797 3,767 342,797
CHUBB CORPORATION 10,000 898,750 10,000 898,750
CIGNA CORPORATION 1,200 118,950 1,200 118,950
CISCO SYSTEMS INCORPORATED 9,100 705,250 9,100 705,250
CITICORP INCORPORATED 3,500 227,063 3,500 227,063
CML GROUP INCORPORATED 9,000 51,750 9,000 51,750
COCA COLA COMPANY 7,600 546,250 7,600 546,250
COMCAST CORPORATION 42,522 760,081 42,522 760,081
COMMUNITY PSYCHIATRIC 1,500 16,313 1,500 16,313
COMPAQ COMPUTER CORPORATION 2,000 111,500 2,000 111,500
COMPUTER ASSOCIATES INTERNATIONAL INC 2,400 132,000 2,400 132,000
CONAGRA INCORPORATED 12,000 463,500 12,000 463,500
CONRAIL INCORPORATED 8,300 570,625 8,300 570,625
CON EDISON COMPANY NEW YORK INC 5,400 164,025 5,400 164,025
CSX CORPORATION 1,200 100,500 1,200 100,500
DARDEN RESTAURANTS INCORPORATED 17,300 196,788 17,300 196,788
DEAN WITTER DISCOVER & COMPANY 3,700 184,075 3,700 184,075
DEERE AND COMPANY 1,800 160,875 1,800 160,875
DIAMOND SHAMROCK INCORPORATED 1,400 36,050 1,400 36,050
DIGITAL EQUIPMENT CORPORATION 3,500 189,438 3,500 189,438
DOW CHEMICAL COMPANY 900 61,763 900 61,763
ELAN CORPORATION 3,900 156,488 3,900 156,488
EMERSON ELECTRIC COMPANY 5,750 409,688 5,750 409,688
ENRON CORPORATION 3,500 120,313 3,500 120,313
EQUITABLE COMPANIES INC. 7,300 155,125 7,300 155,125
EXXON CORPORATION 10,300 786,663 10,300 786,663
FEDERAL NATIONAL MORTGAGE ASSOCIATION 7,200 755,100 7,200 755,100
FHP INTERNATIONAL CORPORATION 1,500 36,375 1,500 36,375
FIRST ALERT INCORPORATED 1,200 18,600 1,200 18,600
FIRST DATA CORPORATION 7,000 462,875 7,000 462,875
FIRST VIRGINIA BANKS INC. 10,000 408,750 10,000 408,750
FLEET FINANCIAL GROUP 2,000 77,500 2,000 77,500
FORD MOTOR COMPANY 7,700 221,375 7,700 221,375
FOUNDATION HEALTH CORPORATION 1,600 67,800 1,600 67,800
FRONTIER CORPORATION 30,000 810,000 30,000 810,000
FRUIT OF THE LOOM 3,000 52,125 3,000 52,125
GENERAL ELECTRIC COMPANY 10,000 632,500 7,200 455,400 17,200 1,087,900
GENERAL MOTORS CORPORATION, CLASS E 10,000 471,250 10,000 471,250
GENERAL RE CORPORATION 5,000 724,375 5,000 724,375
GILLETTE COMPANY 10,600 512,775 10,600 512,775
GLAXO PLC 30,400 824,600 30,400 824,600
GLENAYRE TECHNOLOGIES INCORPORATED 16,350 1,050,485 16,350 1,050,485
GOODYEAR TIRE AND RUBBER COMPANY 9,700 368,600 9,700 368,600
HEALTH MANAGEMENT ASSOCIATION - CL A 19,575 420,863 19,575 420,863
HEALTH SYSTEMS INTERNATIONAL INC., CLASS A 700 21,263 700 21,263
HERCULES INCORPORATED 1,900 101,413 1,900 101,413
HEWLETT PACKARD COMPANY 7,400 685,425 800 74,100 8,200 759,525
HONEYWELL INCORPORATED 17,000 714,000 17,000 714,000
HOUSEHOLD INTERNATIONAL INCORPORATED 1,400 78,750 1,400 78,750
HUBBELL INCORPORATED 10,000 602,500 10,000 602,500
HUMANA INCORPORATED 1,500 31,688 1,500 31,688
IBP INCORPORATED 1,900 113,763 1,900 113,763
IMC GLOBAL, INCORPORATED 1,700 119,000 1,700 119,000
INTEL CORPORATION 3,100 216,613 3,100 216,613
INTERNATIONAL BUSINESS MACHINES CORPORATION 4,000 389,000 4,000 389,000
INTERNATIONAL GAME TECHNOLOGY 5,400 62,775 5,400 62,775
INTERNATIONAL PAPER COMPANY 1,800 66,600 1,800 66,600
INTUIT INCORPORATION 10,000 720,000 10,000 720,000
ITT CORPORATION 1,500 183,750 1,500 183,750
J P MORGAN AND COMPANY INCORPORATED 10,000 771,250 10,000 771,250
JOHNSON AND JOHNSON 6,600 537,900 6,600 537,900
KROGER COMPANY 7,200 240,300 7,200 240,300
LCI INTERNATIONAL INCORPORATED 40,000 720,000 40,000 720,000
LINEAR TECHNOLOGY CORPORATION 20,000 875,000 20,000 875,000
LORAL CORPORATION 24,000 711,000 24,000 711,000
LOWE'S COMPANIES INCORPORATED 6,500 175,500 6,500 175,500
MAGNA INTERNATIONAL, CLASS A 1,000 43,250 1,000 43,250
MALLINCKRODT GROUP INCORPORATED 15,000 521,250 15,000 521,250
MANPOWER INCORPORATED 4,000 108,500 4,000 108,500
MAYTAG CORPORATION 2,700 51,300 2,700 51,300
MBNA CORPORATION 2,500 92,188 2,500 92,188
MCDERMOTT INTERNATIONAL INCORPORATED 1,300 20,638 1,300 20,638
MCDONNELL DOUGLAS CORPORATION 900 73,575 900 73,575
MCI COMMUNICATIONS CORPORATION 6,500 162,094 6,500 162,094
MERCK AND COMPANY INCORPORATED 11,600 667,000 1,600 92,000 13,200 759,000
MGM GRAND INCORPORATED 1,800 42,975 1,800 42,975
MICRON TECHNOLOGY INCORPORATED 900 63,563 900 63,563
MIRAGE RESORTS, INCORPORATED 20,000 655,000 20,000 655,000
MOBIL CORPORATION 5,100 513,825 3,200 322,400 8,300 836,225
MONSANTO COMPANY 1,200 125,700 1,200 125,700
MOTOROLA INCORPORATED 11,600 761,250 1,300 85,313 12,900 846,563
MYLAN LABORATORIES 2,500 47,500 2,500 47,500
NABISCO HOLDINGS CORP-CLASS A 8,000 215,000 8,000 215,000
NATIONAL SEMICONDUCTOR CORPORATION 3,200 78,000 3,200 78,000
NEWS CORPORATION- PREFERRED SHARES ADR 3,200 58,400 3,200 58,400
NOVACARE CORPORATION 2,300 14,375 2,300 14,375
NOVELL INCORPORATED 2,252 37,158 2,252 37,158
ORACLE SYSTEMS CORPORATION 15,300 667,463 15,300 667,463
OWENS CORNING FIBERGLASS CORPORATION 1,200 50,850 1,200 50,850
OWENS-ILLINOIS INCORPORATED 5,300 66,913 5,300 66,913
PACIFIC GAS AND ELECTRIC COMPANY 4,200 123,375 4,200 123,375
PAYCHEX INCORPORATED 15,000 650,625 15,000 650,625
PECO ENERGY COMPANY 8,500 248,625 8,500 248,625
PEOPLESOFT INCORPORATED 5,000 430,000 5,000 430,000
PEP BOYS-MANNY MOE AND JACK 3,500 76,563 3,500 76,563
PEPSICO INCORPORATED 8,000 422,000 8,000 422,000
PHELPS DODGE CORPORATION 1,900 120,413 1,900 120,413
PHILIP MORRIS COMPANIES INCORPORATED 6,700 566,150 6,700 566,150
PHILIPS ELECTRONICS 2,700 104,288 2,700 104,288
POTASH CORPORATION OF SASKATCHEWAN 1,700 118,363 1,700 118,363
PRAXAIR INCORPORATED 6,500 175,500 6,500 175,500
PROCTER AND GAMBLE COMPANY 5,275 427,275 5,275 427,275
PUBLIC SERVICE ENTERPRISE GROUP INCORPORATED 26,900 790,188 26,900 790,188
PYXIS CORPORATION 1,000 12,625 1,000 12,625
QUALCOMM INCORPORATED 10,000 385,000 2,500 96,250 12,500 481,250
REPSOL S.A. 7,100 210,338 7,100 210,338
RJR NABISCO HOLDINGS CORPORATION 10,300 316,725 10,300 316,725
ROYAL DUTCH PETROLEUM COMPANY 2,200 270,325 2,200 270,325
SARA LEE CORPORATION 13,300 390,688 13,300 390,688
SBC COMMUNICATIONS INC 3,000 167,625 3,000 167,625
SBC TELECOMMUNICATIONS INCORPORATED 10,000 558,750 10,000 558,750
SCECORP 14,300 243,100 14,300 243,100
SCHERING PLOUGH CORPORATION 17,000 911,625 17,000 911,625
SCOTT PAPER 11,800 628,350 11,800 628,350
SMITH KLINE BEECHAM PUBLIC LIMITED COMPANY 16,000 830,000 16,000 830,000
TEVA PHARMACEUTICAL INDUSTRIES LIMITED 1,400 54,950 1,400 54,950
TEXAS INSTRUMENTS INCOPORATED 1,800 122,850 1,800 122,850
TEXTRON INCOPORATED 1,000 68,750 1,000 68,750
THE TRAVELERS GROUP, INC 5,000 252,500 5,000 252,500
TOSCO CORPORATION 2,300 79,350 2,300 79,350
TRANSPORT HOLDINGS INC CL-A 25 981 25 981
U.S. ROBOTICS INCORPORATED 9,200 851,000 9,200 851,000
UNITED HEALTHCARE CORPORATION 500 26,563 500 26,563
UNITED STATES SURGICAL CORPORATION 1,700 41,650 1,700 41,650
UNITED TECHNOLOGIES CORPORATION 900 79,875 900 79,875
UNIVERSAL CORPORATION- VA 900 18,900 900 18,900
USX CORPORATION - U.S. STEEL GROUP 3,900 116,513 3,900 116,513
VICORP RESTAURANTS INCORPORATED 2,200 24,200 2,200 24,200
VLSI TECHNOLOGY INC. 1,500 35,250 1,500 35,250
VONS COMPANY 1,500 38,063 1,500 38,063
WARNER LAMBERT COMPANY 10,000 851,250 10,000 851,250
WEBB DEL E CORPORATION 5,400 112,050 5,400 112,050
WELLS FARGO AND COMPANY 2,000 420,250 2,000 420,250
WESTINGHOUSE ELECTRIC CORPORATION 7,500 105,938 7,500 105,938
WORLDCOM INCORPORATED 15,000 489,375 14,300 466,538 29,300 955,913
XEROX CORPORATION 500 64,875 500 64,875
YPF SOCIEDAD ANONIMA 2,700 46,238 2,700 46,238
PREFERRED STOCKS
GENERAL MOTORS CORPORATION, SERIES C PFD-CV 6,500 435,500 6,500 435,500
U.S. TREASURY BONDS
UNITED STATES TREASURY BOND 5/15/16 7.25 500,000 547,855 500,000 547,855
UNITED STATES TREASURY BOND 5/15/17 8.75 1,040,000 1,319,947 1,040,000 1,319,947
UNITED STATES TREASURY BOND 2/15/23 7.13 500,000 544,725 500,000 544,725
UNITED STATES TREASURY BOND 2/15/23 7.63 80,000 92,831 80,000 92,831
UNITED STATES TREASURY BOND 8/15/23 6.25 500,000 488,675 500,000 488,675
U.S. TREASURY NOTES
UNITED STATES TREASURY NOTE 1/31/96 4.00 1,000,000 996,220 1,000,000 996,220
UNITED STATES TREASURY NOTE 5/15/96 7.38 700,000 706,587 700,000 706,587
UNITED STATES TREASURY NOTE 5/31/96 5.88 2,000,000 2,003,320 2,000,000 2,003,320
UNITED STATES TREASURY NOTE 8/31/96 7.25 500,000 506,525 500,000 506,525
UNITED STATES TREASURY NOTE 9/30/96 6.50 2,500,000 2,519,575 2,500,000 2,519,575
UNITED STATES TREASURY NOTE 1/31/97 7.50 950,000 971,366 950,000 971,366
UNITED STATES TREASURY NOTE 5/15/97 8.50 85,000 88,545 85,000 88,545
UNITED STATES TREASURY NOTE 5/15/97 6.50 645,000 653,133 645,000 653,133
UNITED STATES TREASURY NOTE 11/15/97 7.38 1,645,000 1,698,819 1,645,000 1,698,819
UNITED STATES TREASURY NOTE 12/31/97 6.00 500,000 503,770 500,000 503,770
UNITED STATES TREASURY NOTE 2/15/98 8.13 355,000 373,410 355,000 373,410
UNITED STATES TREASURY NOTE 3/31/98 5.13 500,000 493,895 500,000 493,895
UNITED STATES TREASURY NOTE 5/15/98 9.00 815,000 878,097 815,000 878,097
UNITED STATES TREASURY NOTE 8/15/98 9.25 430,000 468,661 430,000 468,661
UNITED STATES TREASURY NOTE 11/15/98 8.88 1,105,000 1,201,257 1,105,000 1,201,257
UNITED STATES TREASURY NOTE 5/31/99 6.75 1,215,000 1,252,957 1,215,000 1,252,957
UNITED STATES TREASURY NOTE 9/30/99 7.13 600,000 627,438 600,000 627,438
UNITED STATES TREASURY NOTE 10/15/99 6.00 500,000 503,990 500,000 503,990
UNITED STATES TREASURY NOTE 10/31/99 7.50 970,000 1,028,103 970,000 1,028,103
UNITED STATES TREASURY NOTE 1/15/00 6.38 500,000 510,590 500,000 510,590
UNITED STATES TREASURY NOTE 11/15/01 7.50 1,275,000 1,378,530 1,275,000 1,378,530
UNITED STATES TREASURY NOTE 8/15/05 6.50 500,000 517,550 500,000 517,550
UNITED STATES TREASURY NOTE 2/15/16 9.25 510,000 673,430 510,000 673,430
U.S. TREASURY BILLS
UNITED STATES TREASURY BILL 12/14/95 7.14 1,000,000 993,650 1,000,000 993,650
GNMA MORTGAGES
GOVERNMENT NATIONAL MORTGAGE ASSOCIATION 10/15/19 9.00 233,908 245,821 233,908 245,821
GOVERNMENT NATIONAL MORTGAGE ASSOCIATION 12/15/22 7.50 750,858 761,415 750,858 761,415
GOVERNMENT NATIONAL MORTGAGE ASSOCIATION 7/15/23 7.00 386,093 383,799 386,093 383,799
GOVERNMENT NATIONAL MORTGAGE ASSOCIATION 7/15/25 7.50 714,832 727,563 714,832 727,563
GOVERNMENT NATIONAL MORTGAGE ASSOCIATION 8/15/25 7.00 499,580 496,612 499,580 496,612
FHLMC MORTGAGES
FEDERAL HOME LOAN MORTGAGE CORPORATION 1/28/00 6.44 500,000 508,750 500,000 508,750
FEDERAL HOME LOAN MORTGAGE CORPORATION 11/1/08 5.50 853,310 818,640 853,310 818,640
FEDERAL HOME LOAN MORTGAGE CORPORATION 11/1/08 5.50 35,831 34,375 35,831 34,375
FEDERAL HOME LOAN MORTGAGE CORPORATION 9/1/25 7.00 350,000 347,484 350,000 347,484
FNMA MORTGAGES
FEDERAL NATIONAL MORTGAGE ASSOCIATION 7/1/10 6.50 288,056 285,804 288,056 285,804
FEDERAL NATIONAL MORTGAGE ASSOCIATION 2/1/23 8.00 175,892 180,399 175,892 180,399
FEDERAL NATIONAL MORTGAGE ASSOCIATION 5/1/25 7.50 159,134 160,873 159,134 160,873
FEDERAL NATIONAL MORTGAGE ASSOCIATION 7/1/25 7.50 174,544 176,452 174,544 176,452
CMO'S & REMICS
FEDERAL HOME LOAN MORTGAGE CORPORATION 5/1/08 6.00 837,340 817,972 837,340 817,972
FEDERAL HOME LOAN MORTGAGE CORPORATION 8/1/10 7.00 138,629 139,797 138,629 139,797
CORPORATE BONDS
BEAR STEARNS CO. 10/1/05 6.88 175,000 174,781 175,000 174,781
BELLSOUTH CORPORATION 2/1/05 7.00 500,000 518,750 500,000 518,750
CARTER HOLT HARVEY LTD. 4/15/15 8.38 85,000 94,456 85,000 94,456
CHASE MANHATTEN BANK 8/1/05 6.50 100,000 97,500 100,000 97,500
COCA-COLA COMPANY 7/15/03 6.00 1,000,000 976,250 1,000,000 976,250
DAYTON HUDSON CORPORATION 12/1/22 8.50 500,000 525,000 500,000 525,000
FIRST BANK SYSTEM 9/15/07 6.88 500,000 500,625 500,000 500,625
FIRST NATIONWIDE 10/1/06 10.00 50,000 58,938 50,000 58,938
FORD MOTOR CREDIT CORPORATION 4/15/00 6.38 500,000 500,625 500,000 500,625
FORD MOTOR CREDIT CORPORATION 1/15/03 7.50 1,000,000 1,048,750 1,000,000 1,048,750
FORD MOTOR CREDIT CORPORATION 11/8/00 6.25 500,000 497,500 500,000 497,500
MANUFACTURERS & TRADERS 7/1/05 7.00 165,000 165,000 165,000 165,000
MERRILL LYNCH AND COMPANY 4/27/08 7.00 250,000 252,500 250,000 252,500
NIAGARA MHWK POWER 4/1/22 8.75 80,000 75,600 80,000 75,600
PROVIDENT BANK 1/15/04 6.38 160,000 156,400 160,000 156,400
TORONTO-DOMNION BANK-NY 10/15/08 6.15 140,000 131,250 140,000 131,250
U.S. BANCORP 10/15/05 6.75 500,000 497,500 500,000 497,500
CONVERTIBLE BONDS
AAB-GLOBAL BD 5/31/05 7.25 250,000 259,688 250,000 259,688
BROWNING-FERRIS CV 8/15/12 6.25 425,000 420,750 425,000 420,750
ORYX ENERGY COMPANY CV 5/15/14 7.50 400,000 345,000 400,000 345,000
TIME WARNER INCORPORATED 1/10/15 8.75 216,800 224,659 216,800 224,659
CORPORATE NOTES
AHMANSON H. F. 9/1/04 7.88 185,000 196,563 185,000 196,563
CAPITAL ONE BANK 2/27/98 8.13 90,000 93,713 90,000 93,713
CHEMICAL BANK 11/1/08 6.13 230,000 213,613 230,000 213,613
LEHMAN BROTHERS HOLDINGS 9/15/03 7.13 175,000 176,094 175,000 176,094
SANTANDER FINANCE 4/15/05 7.88 100,000 106,750 100,000 106,750
TCI COMMUNICATIONS INCORPORATED 8/1/15 8.75 90,000 95,963 90,000 95,963
TELE-COMMUN INCORPORATED 1/15/03 8.25 100,000 104,500 100,000 104,500
UNITED AIR LINES 5/1/04 10.67 320,000 377,200 320,000 377,200
ASSET BACKED SECURITIES
PREMIER AUTO TRUST 9/4/98 7.85 110,000 113,146 110,000 113,146
CORPORATE CMO'S
PRUDENTIAL HOME MORTGAGE SECURITIES 10/25/24 7.00 235,000 229,717 235,000 229,717
YANKEE BONDS
CSR FINANCE LTD 7/21/25 7.70 200,000 207,750 200,000 207,750
LAIDLAW INCORPORATED 4/15/25 8.75 75,000 86,344 75,000 86,344
NORANDA INCORPORATED 6/1/03 8.00 100,000 107,000 100,000 107,000
QUEBEC PROVINCE 7/15/23 7.50 280,000 280,700 280,000 280,700
DOMESTIC CP - -
AMERICAN EXPRESS 11/1/95 5.75 4,030,000 4,030,000 4,030,000 4,030,000
MEDIUM TERM NOTES - -
BELL ATLANTIC CORPORATION 4/27/98 5.47 500,000 492,500 500,000 492,500
REPURCHASE AGREEMENTS
AUBREY LANSTON 11/1/95 5.85 1,337,000 1,337,000 1,337,000 1,337,000
HONG KONG SHANGHAI BANK 11/1/95 5.85 1,336,000 1,336,000 1,336,000 1,336,000
SANWA BANK 11/1/95 5.88 1,336,000 1,336,000 1,336,000 1,336,000
NATIONS BANK 11/1/95 5.85 1,336,000 1,336,000 1,336,000 1,336,000
---------- ---------- ---------- ---------- ---------- -----------
TOTALS 27,723,141 68,183,144 22,733,519 38,356,565 50,456,660 106,539,709
========== ========== ========== ========== ========== ===========
</TABLE>
<PAGE>
CoreFund International Growth Fund
Conestoga International Equity Fund
Pro-forma Combined Schedule of Investments
31-Oct-95
<TABLE>
<CAPTION>
CoreFund Conestoga Fund Pro-forma Combined
Security Description Shares Market Value Shares Market Value Shares Market Value
<S> <C> <C> <C> <C> <C> <C>
ARGENTINA
BANCO FRANCES DEL RIO 2,200.00 48,125.00 2,200.00 48,125.00
BUENOS AIRES EMBOTELLADORA 5,200.00 118,950.00 5,200.00 118,950.00
CAPEX - GDS 12,500.00 153,125.00 12,500.00 153,125.00
COMMERCIAL DEL PLATA SA 19,000.00 38,380.00 19,000.00 38,380.00
COMPANIA NAVIERA PEREZ 36,700.00 161,847.00 36,700.00 161,847.00
CORP CEMENTERA ARGENTINA 6,500.00 27,950.00 6,500.00 27,950.00
IRSA GDR 1,400.00 29,400.00 1,400.00 29,400.00
YPF SOCIEDAD ANONIMA ADS 5,400.00 92,475.00 5,400.00 92,475.00
AUSTRALIA
BROKEN HILL PROPRIETARY 121,770.00 1,648,698.29 121,770.00 1,648,698.29
NEWSCORP 21,000.00 105,863.54 21,000.00 105,863.54
QANTAS AIRWAYS 313,000.00 552,969.84 313,000.00 552,969.84
AUSTRIA
OEST ELEKTRIZATSWITS 'A' 5,047.00 308,458.94 5,047.00 308,458.94
VIENNA INTERNATIONAL AIRPORT 9,500.00 610,364.68 9,500.00 610,364.68
BELGIUM
KREDIETBANK 2,600.00 652,471.48 2,600.00 652,471.48
BRAZIL
CEMIG - ADR 12,100.00 263,780.00 12,100.00 263,780.00
COMPANIA VALE RIO DOCE ADR 11,200.00 453,712.00 11,200.00 453,712.00
ELETROBRAS - ADR 23,500.00 331,937.50 23,500.00 331,937.50
RHODIA-STER - GDR 20,097.00 261,461.97 20,097.00 261,461.97
TELEBRAS ADR 13,450.00 541,894.66 13,450.00 541,894.66
USIMINAS - ADR 18,600.00 172,050.00 18,600.00 172,050.00
CHILE
MADECO ADR 9,630.00 239,546.25 9,630.00 239,546.25
MADERAS Y SINTECTICOS SOCIEDAD ADR 12,500.00 223,437.50 12,500.00 223,437.50
SANTA ISABEL ADR 1,100.00 24,887.50 1,100.00 24,887.50
SOCIEDAD QUIMICA Y MINERA ADR 4,861.00 210,845.88 4,861.00 210,845.88
COLOMBIA
CEMENTOS DIAMANTE - GDS 18,800.00 319,600.00 18,800.00 319,600.00
ECUADOR
LA CEMENTO NACIONAL-GDR 832.00 174,720.00 832.00 174,720.00
FINLAND
NOKIA AB 'A' 8,400.00 481,040.70 8,400.00 481,040.70
FRANCE
AXA 18,500.00 1,027,840.85 800.00 44,447.17 19,300.00 1,072,288.02
BANCAIRE 350.00 36,299.48 350.00 36,299.48
BUSINESS OBJECTS 1,300.00 56,225.00 1,300.00 56,225.00
CASTORAMA 165.00 26,765.88 165.00 26,765.88
CIE DE SAINT GOBAIN 87.00 10,375.58 87.00 10,375.58
ELF AQUITAINE 10,466.00 712,934.03 10,466.00 712,934.03
IMETAL SA 3,887.00 457,995.70 3,887.00 457,995.70
L'OREAL 4,800.00 1,173,366.06 4,800.00 1,173,366.06
PEUGEOT 7,500.00 977,293.65 7,500.00 977,293.65
SCHNEIDER (SPIE BATIGN) 25,600.00 987,656.75 25,600.00 987,656.75
SEITA 22,000.00 765,060.86 22,000.00 765,060.86
SGS-THOMSON ADR 1,500.00 67,875.00 1,500.00 67,875.00
GERMANY
HOECHST 2,198.00 573,323.38 2,198.00 573,323.38
MANNESMANN 4,300.00 1,411,940.30 4,300.00 1,411,940.30
SAP PFD 1,250.00 191,453.45 1,250.00 191,453.45
VEBA 40,000.00 1,638,379.53 2,250.00 92,158.85 42,250.00 1,730,538.38
HONG KONG
AMOY PROPERTIES 1,062,000.00 1,023,372.83 1,062,000.00 1,023,372.83
CHEUNG KONG 11,000.00 62,034.35 11,000.00 62,034.35
CHINA LIGHT & POWER 200,000.00 1,065,811.26 200,000.00 1,065,811.26
CITIC PACIFIC 230,000.00 718,452.50 20,800.00 64,973.10 250,800.00 783,425.60
FIRST PACIFIC 266,000.00 306,213.78 266,000.00 306,213.78
HSBC HOLDINGS 151,501.00 2,204,555.89 15,200.00 221,181.71 166,701.00 2,425,737.60
HUTCHISON WHAMPOA 265,000.00 1,460,187.29 12,000.00 66,121.69 277,000.00 1,526,308.98
SUN HUNG KAI PROPERTIES 8,000.00 63,896.94 8,000.00 63,896.94
SWIRE PACIFIC 'A' 207,000.00 1,552,928.39 207,000.00 1,552,928.39
INDIA
EAST INDIA HOTELS GDS 1,400.00 24,150.00 1,400.00 24,150.00
I.T.C. LIMITED ADR 4,100.00 35,875.00 4,100.00 35,875.00
RANBAXY LABORATORIES GDR 1,000.00 22,370.00 1,000.00 22,370.00
INDONESIA
INDOSAT ADR 4,000.00 132,500.00 4,000.00 132,500.00
IRELAND
ELAN 1,300.00 52,162.50 1,300.00 52,162.50
ISRAEL
ECI TELECOM 1,800.00 34,200.00 1,800.00 34,200.00
ITALY
ASSICURAZIONI GENERALI 2,200.00 51,305.71 2,200.00 51,305.71
FALCK 12,200.00 27,961.21 12,200.00 27,961.21
GUCCI GROUP ADR 3,100.00 93,000.00 3,100.00 93,000.00
GUCCI GROUP ADR 900.00 38,812.50 900.00 38,812.50
MEDIOBANCA 4,000.00 26,742.00 4,000.00 26,742.00
RINASCENTE 162,000.00 961,016.95 162,000.00 961,016.95
TELECOM ITALIA MOBILE SPA 635,000.00 1,066,305.71 71,500.00 120,064.34 706,500.00 1,186,370.05
JAPAN
ADVANTEST 4,000.00 226,828.31 4,000.00 226,828.31
ALPINE ELECTRONICS 4,000.00 55,533.83 4,000.00 55,533.83
AMANO CORPORATION (6436.T) 47,000.00 569,808.37 47,000.00 569,808.37
ASAHI CHEMICAL INDUSTRIES 198,000.00 1,389,949.16 198,000.00 1,389,949.16
ASAHI DIAMOND INDUSTRIAL 43,000.00 550,743.06 43,000.00 550,743.06
BEST DENKI 2,000.00 28,744.62 2,000.00 28,744.62
BRIDGESTONE 3,000.00 41,650.37 3,000.00 41,650.37
CANON 93,000.00 1,591,220.18 6,000.00 102,659.37 99,000.00 1,693,879.55
CANON SALES 1,000.00 23,660.54 1,000.00 23,660.54
DAIFUKU CO. LTD. 43,000.00 512,905.75 43,000.00 512,905.75
DAIWA SECURITIES 7,000.00 82,127.49 7,000.00 82,127.49
DDI 147.00 1,191,464.61 32.00 259,366.45 179.00 1,450,831.06
EIDEN SAKAKIYA 27,000.00 314,137.66 27,000.00 314,137.66
FANUC 2,000.00 86,624.95 2,000.00 86,624.95
HIROSE ELECTRIC 1,050.00 67,036.57 1,050.00 67,036.57
HITACHI 163,000.00 1,673,347.67 163,000.00 1,673,347.67
HITACHI METALS 112,000.00 1,379,741.89 112,000.00 1,379,741.89
ITO YOKADO 22,000.00 1,202,385.61 3,000.00 163,961.67 25,000.00 1,366,347.28
ITOCHU 236,000.00 1,398,279.23 236,000.00 1,398,279.23
KAMIGUMI COMPANY 102,000.00 922,467.74 102,000.00 922,467.74
KEYENCE 500.00 61,595.62 500.00 61,595.62
KIRIN BEVERAGE 35,000.00 530,406.73 35,000.00 530,406.73
KOA 5,000.00 81,149.78 5,000.00 81,149.78
KOKUSAI ELECTRIC 5,000.00 113,903.01 5,000.00 113,903.01
KOMATSU 6,000.00 46,930.00 6,000.00 46,930.00
KUBOTA 6,000.00 37,192.02 6,000.00 37,192.02
KURARAY NO. 4 WARRANTS 1/13/98 360.00 112,500.00 360.00 112,500.00
KURITA WATER 1,000.00 27,864.69 1,000.00 27,864.69
KYOCERA 21,000.00 1,720,570.98 4,000.00 327,727.81 25,000.00 2,048,298.79
MABUCHI MOTOR 9,000.00 544,681.27 9,000.00 544,681.27
MAKITA 2,000.00 31,091.12 2,000.00 31,091.12
MARUI COMPANY 44,000.00 761,439.19 2,000.00 34,610.87 46,000.00 796,050.06
MASPRO DENKOH (6749.T) 14,400.00 204,145.48 14,400.00 204,145.48
MATSUSHITA ELECTRIC 3,000.00 42,530.31 3,000.00 42,530.31
MITS BNK(CNV) 3%,11/30/02 1,100,000.00 1,145,375.00 1,100,000.00 1,145,375.00
MITSUBISHI ELECTRIC 5,000.00 37,348.46 5,000.00 37,348.46
MITSUBISHI ESTATE 7,000.00 74,599.14 7,000.00 74,599.14
MITSUBISHI HEAVY INDUSTRIES 254,000.00 1,959,386.00 254,000.00 1,959,386.00
MITSUBISHI TRUST & BANKING 2,000.00 27,962.46 2,000.00 27,962.46
MITSUI FUDOSAN 101,000.00 1,155,357.84 5,000.00 57,195.93 106,000.00 1,212,553.77
MURATA 4,000.00 140,398.90 4,000.00 140,398.90
NEC 20,000.00 263,981.23 20,000.00 263,981.23
NIKON 10,000.00 142,745.40 10,000.00 142,745.40
NIPPON EXPRESS 154,000.00 1,249,706.69 154,000.00 1,249,706.69
NIPPON SYSTEM DEVELOPMENT (9759.OS) 17,000.00 207,763.00 17,000.00 207,763.00
NIPPON TELEGRAPH & TELEPHONE 4.00 32,811.89 4.00 32,811.89
NISSAN MOTORS 7,000.00 47,223.31 7,000.00 47,223.31
NOMURA SECURITIES 77,000.00 1,407,802.11 6,000.00 109,698.87 83,000.00 1,517,500.98
NTT DATA COMMUNICATIONS 3.00 75,087.99 3.00 75,087.99
ORGANO CO. LTD. 40,000.00 410,637.47 40,000.00 410,637.47
RISO KAGAKU CORPORATION 6,100.00 491,435.28 6,100.00 491,435.28
ROHM COMPANY 32,000.00 1,942,901.84 32,000.00 1,942,901.84
SANKYO 61,000.00 1,341,904.58 1,000.00 21,998.44 62,000.00 1,363,903.02
SANWA BANK 3,000.00 51,036.37 3,000.00 51,036.37
SEKISUI WARRANTS 155.00 205,375.00 155.00 205,375.00
SHARP 7,000.00 97,184.20 7,000.00 97,184.20
SHIMACHU 17,000.00 448,768.09 17,000.00 448,768.09
SHIN ETSU CHEMICAL 66,000.00 1,348,650.76 66,000.00 1,348,650.76
SONY 24,000.00 1,079,389.91 1,000.00 44,974.58 25,000.00 1,124,364.49
SUMITOMO BANK 3,000.00 53,089.56 3,000.00 53,089.56
SUMITOMO ELECTRIC 109,000.00 1,257,528.35 109,000.00 1,257,528.35
SUMITOMO FORESTRY 88,000.00 1,238,951.90 88,000.00 1,238,951.90
SUMITOMO TRUST & BANKING 110,000.00 1,269,065.31 4,000.00 46,147.83 114,000.00 1,315,213.14
TAISHO PHARMACEUTICAL 21,000.00 379,839.66 21,000.00 379,839.66
TAKEDA CHEMICAL INDUSTRIES 2,000.00 28,158.00 2,000.00 28,158.00
TDK 1,000.00 51,525.22 1,000.00 51,525.22
TOCHIGI FUJI INDUSTRIAL 41,000.00 284,610.87 41,000.00 284,610.87
TOKIO MARINE & FIRE INSURANCE 123,000.00 1,262,710.21 123,000.00 1,262,710.21
TOKYO ELECTRONICS 4,000.00 173,640.99 4,000.00 173,640.99
TORAY 6,000.00 37,485.33 6,000.00 37,485.33
TOYOTA MOTOR 4,000.00 74,305.83 4,000.00 74,305.83
USHIO 2,000.00 22,682.83 2,000.00 22,682.83
YAMANOUCHI PHARMACEUTICAL 3,000.00 66,875.24 3,000.00 66,875.24
LUXEMBOURG
MILLICOM INTERNATIONAL 6,800.00 224,400.00 500.00 16,500.00 7,300.00 240,900.00
MALAYSIA
ARAB-MALAYSIAN MERCHANT BANK 106,000.00 1,314,308.21 12,000.00 148,789.61 118,000.00 1,463,097.82
EDARAN OTOMOBIL 80,000.00 629,797.28 80,000.00 629,797.28
GENTING BERHAD 157,000.00 1,353,395.00 157,000.00 1,353,395.00
MALAYAN BANKING 10,000.00 80,692.78 10,000.00 80,692.78
NEW STRAITS TIMES PRESS 20,000.00 62,979.73 20,000.00 62,979.73
RESORTS WORLD BERHAD 88,000.00 429,521.75 88,000.00 429,521.75
SIME DARBY MALAYSIA 20,000.00 49,990.16 20,000.00 49,990.16
TECHNOLOGY RESOURCES 44,000.00 111,710.29 44,000.00 111,710.29
UNITED ENGINEERS 150,000.00 932,887.23 9,000.00 55,973.23 159,000.00 988,860.46
MEXICO
BUFETE INDUSTRIAL ADR 1,600.00 21,400.00 1,600.00 21,400.00
CEMEX SA DE CV A"" 5,300.00 16,440.51 5,300.00 16,440.51
CIFRA, S.A. (CFRAY.OB) 35,000.00 37,449.99 35,000.00 37,449.99
EMPRESAS ICA SOCIEDAD CONTROLADORA ADR 16,000.00 152,000.00 16,000.00 152,000.00
GRUPO CARSO SA ADR 15,500.00 151,125.00 2,500.00 24,375.00 18,000.00 175,500.00
GRUPO FINANCIERO BANAMEX, SERIES B 75,000.00 129,603.40 75,000.00 129,603.40
GRUPO FINANCIERO BANAMEX, SERIES B 11,000.00 19,008.50 11,000.00 19,008.50
GRUPO FINANCIERO BANAMEX, SERIES L 550.00 906.80 550.00 906.80
GRUPO FINANCIERO INBURSA B"" 20,000.00 54,674.22 20,000.00 54,674.22
GRUPO IND ALFA SERIES A" NPV (CPO)" 13,000.00 152,832.86 13,000.00 152,832.86
GRUPO IUSACELL, 1,400.00 16,625.00 1,400.00 16,625.00
GRUPO MODELO SA SERIES C"" 5,000.00 19,192.63 5,000.00 19,192.63
GRUPO POSADAS 52,300.00 16,667.85 52,300.00 16,667.85
GRUPO SYNKRO, CL B 80,000.00 19,600.00 80,000.00 19,600.00
KIMBERLY CLARK, SERIES A 1,700.00 22,369.69 1,700.00 22,369.69
KIMBERLY CLARKE - ADR 5,500.00 144,375.00 5,500.00 144,375.00
NETHERLANDS
ADV SEMICONDUCTOR ENG ADR 700.00 32,812.50 700.00 32,812.50
ASM LITHO HOLDINGS 2,000.00 99,250.00 2,000.00 99,250.00
BAAN 2,300.00 97,750.00 2,300.00 97,750.00
ELSEVIER NV 131,750.00 1,703,231.94 4,500.00 58,174.90 136,250.00 1,761,406.84
GETRONICS 1,000.00 47,718.63 1,000.00 47,718.63
INTERNATIONAL NEDERLANDEN 23,182.00 1,382,399.37 500.00 29,816.22 23,682.00 1,412,215.59
KPN 17,000.00 597,908.75 17,000.00 597,908.75
MADGE NETWORKS 1,900.00 79,562.50 1,900.00 79,562.50
PHILIPS ELECTRONICS 1,800.00 69,581.75 1,800.00 69,581.75
POLYGRAM 14,500.00 905,101.39 1,100.00 68,662.86 15,600.00 973,764.25
WOLTERS KLUWER 500.00 45,500.63 500.00 45,500.63
NEW ZEALAND
TELECOM CORP NEW ZEALAND 1,015.00 67,370.63 1,015.00 67,370.63
NORWAY
HAFSLUND NYCOMED 'B' 1,200.00 33,536.78 1,200.00 33,536.78
PETROLEUM GEO-SERVICES ADR 6,200.00 120,125.00 6,200.00 120,125.00
PERU
BANCO WIESE 6,900.00 45,712.50 6,900.00 45,712.50
PHILIPPINES
SAN MIGUEL, CL B 20,000.00 66,204.77 20,000.00 66,204.77
SINGAPORE
CITY DEVELOPMENTS 7,000.00 43,362.83 7,000.00 43,362.83
CREATIVE TECHNOLOGY 1,100.00 12,787.50 1,100.00 12,787.50
DEVELOPMENT BANK OF SINGAPORE 106,000.00 1,215,716.81 106,000.00 1,215,716.81
FIRST CAPITAL CORPORATION 227,000.00 613,904.42 227,000.00 613,904.42
FLEXTRONICS 1,000.00 23,250.00 1,000.00 23,250.00
JARDINE MATHESON HOLDINGS 156,800.00 956,480.00 156,800.00 956,480.00
SINGAPORE PRESS HOLDINGS F"" 98,400.00 1,539,568.14 2,400.00 37,550.44 100,800.00 1,577,118.58
STRAITS STEAMSHIP LAND 14,000.00 39,249.56 14,000.00 39,249.56
UNITED OVERSEAS BANK 10,600.00 93,054.87 10,600.00 93,054.87
SOUTH AFRICA
ISCOR 140,100.00 142,155.49 140,100.00 142,155.49
MALBAK 50,000.00 332,510.63 50,000.00 332,510.63
MURRAY & ROBERTS 34,500.00 241,258.74 34,500.00 241,258.74
POLIFIN LIMITED 5,250.00 11,301.93 5,250.00 11,301.93
SAFMARINE & RENNIE HOLDING LIMITED 80,000.00 279,720.28 80,000.00 279,720.28
SASOL 35,000.00 302,344.71 35,000.00 302,344.71
SOUTH AFRICAN BREWERY 7,400.00 243,013.85 7,400.00 243,013.85
SOUTH KOREA
KOREA FUND 3,000.00 64,875.00 3,000.00 64,875.00
KOREA MOBILE TELECOM GDR 2,500.00 92,500.00 2,500.00 92,500.00
SAMSUNG ELECTRONICS GDS 4,000.00 256,000.00 4,000.00 256,000.00
SAMSUNG ELECTRONICS GDS NEW 22.00 2,332.00 22.00 2,332.00
SEOUL EXCEL TRUST - IDR 18.00 202,680.00 18.00 202,680.00
SPAIN
BANCO DE SANTANDER 23,000.00 1,003,279.76 23,000.00 1,003,279.76
FCC 5,000.00 353,394.56 5,000.00 353,394.56
REPSOL 19,220.00 574,425.22 19,220.00 574,425.22
SWEDEN
ALLGAN SERIES B 1,600.00 24,224.89 1,600.00 24,224.89
ASEA AB B-F 1,400.00 138,148.18 1,400.00 138,148.18
ASTRA 'B' 5,200.00 188,014.10 5,200.00 188,014.10
AUTOLIV AB 2,200.00 126,276.78 2,200.00 126,276.78
ERICSSON LM TELEPHONE 29,000.00 616,017.36 23,400.00 499,809.38 52,400.00 1,115,826.74
PHARMACIA B 500.00 17,475.67 500.00 17,475.67
STORA KOPPARBERGS 'A' 61,000.00 739,778.24 61,000.00 739,778.24
SWITZERLAND
BBC BROWN BOVERI 65.00 75,422.91 65.00 75,422.91
CIBA GEIGY 125.00 108,259.91 125.00 108,259.91
NESTLE SA REGISTERED 1,470.00 1,541,233.48 1,470.00 1,541,233.48
ROCHE HOLDING 35.00 254,405.29 35.00 254,405.29
ROCHE HOLDING 210.00 1,526,431.72 210.00 1,526,431.72
SANDOZ PHARMACEUTICAL 260.00 214,643.17 260.00 214,643.17
ZURICH VERSICHERUNG 3,150.00 901,982.38 3,150.00 901,982.38
THAILAND
ADVANCED INFO SERVICE 9,000.00 148,807.63 9,000.00 148,807.63
LAND AND HOUSE F"" 2,000.00 32,273.45 2,000.00 32,273.45
THAI MILITARY BANK 335,000.00 1,318,163.75 335,000.00 1,318,163.75
TOTAL ACCESS COMMUNICATIONS ADR 11,000.00 66,550.00 11,000.00 66,550.00
UNITED COMMUNICATIONS 5,000.00 62,798.09 5,000.00 62,798.09
UNITED KINGDOM
ARGYLL GROUP 170,000.00 865,180.97 170,000.00 865,180.97
BARCLAYS BANK 5,200.00 61,065.28 5,200.00 61,065.28
BARRATT DEVELOPMENT 319,000.00 978,125.49 319,000.00 978,125.49
BAT 4,200.00 34,452.35 4,200.00 34,452.35
BRITISH AIRWAYS 109,000.00 783,862.81 109,000.00 783,862.81
BRITISH SKY BROADCASTING ADR 5,500.00 196,625.00 5,500.00 196,625.00
BRITISH TELECOMMUNICATIONS 138,000.00 821,194.88 138,000.00 821,194.88
BTR WARRANTS 265,000.00 314,129.92 265,000.00 314,129.92
COMMERCIAL UNION 5,300.00 51,349.77 5,300.00 51,349.77
DIXONS GROUP 164,000.00 992,761.18 164,000.00 992,761.18
EAST MIDLANDS ELECTRICITY 76,532.00 1,050,545.95 76,532.00 1,050,545.95
GKN 86,000.00 1,096,917.97 86,000.00 1,096,917.97
GLAXO WELLCOME 106,000.00 1,429,919.39 7,200.00 97,126.60 113,200.00 1,527,045.99
GRANADA GROUP 96,000.00 1,025,699.38 96,000.00 1,025,699.38
LADBROKE ORD 10 P 353,000.00 926,157.74 353,000.00 926,157.74
LEX SERVICE 101,833.00 531,134.66 101,833.00 531,134.66
LOGICA 6,100.00 46,181.44 6,100.00 46,181.44
MCKENCHIE 84,000.00 578,852.54 84,000.00 578,852.54
NEXT 12,000.00 77,761.97 12,000.00 77,761.97
NFC 362,000.00 892,555.71 362,000.00 892,555.71
RECKITT & COLEMAN 118,000.00 1,255,160.42 118,000.00 1,255,160.42
REUTERS HOLDINGS 16,200.00 150,554.77 16,200.00 150,554.77
SMITHKLINE BEECHAM 20,500.00 209,957.33 20,500.00 209,957.33
TAKARE 6,000.00 19,440.49 6,000.00 19,440.49
TELE-COMMUNICATIONS - A 7,500.00 169,687.50 7,500.00 169,687.50
TOMKINS 323,000.00 1,273,723.72 323,000.00 1,273,723.72
TSB GROUP 208,000.00 1,226,236.76 208,000.00 1,226,236.76
UNILEVER 64,000.00 1,243,180.02 64,000.00 1,243,180.02
VODAFONE GROUP 26,200.00 108,079.66 26,200.00 108,079.66
WASSALL 168,750.00 725,462.30 168,750.00 725,462.30
WOLSELEY 196,000.00 1,214,351.19 196,000.00 1,214,351.19
WPP GROUP 11,600.00 28,234.55 11,600.00 28,234.55
ZENECA GROUP 8,000.00 149,012.17 8,000.00 149,012.17
UNITED STATES
BARCLAY'S T/D, 4.75& 763,000.00 763,000.00 763,000.00 763,000.00
CLYDESDALE T/D, 5.00% 201,511.21 201,511.21 201,511.21 201,511.21
HIMILAYAN FUND WARRANTS 7,243.00 3,621.50 7,243.00 3,621.50
HIMILAYAN MUTUAL FUND 77,718.00 990,904.50 77,718.00 990,904.50
INDIAN OPPORTUNITIES FND 41,982.73 425,704.88 41,982.73 425,704.88
KOREA PREF SHARE FUND 41,000.00 467,400.00 41,000.00 467,400.00
NEAR EAST OPPORTUNITIES FUND 59,000.00 636,020.00 59,000.00 636,020.00
QUILMES INDUSTRIAL (REG) 2,200.00 38,720.00 2,200.00 38,720.00
TAIWAN OPPORTUNITIES FUND 204,500.00 1,623,730.00 204,500.00 1,623,730.00
USD TIME DEPOSIT 12/11/95 1,028,558.00 1,028,558.00 1,028,558.00 1,028,558.00
------------- -------------- ------------ ------------- ------------- --------------
TOTALS 14,581,107.94 113,133,791.69 2,345,434.00 13,281,387.99 16,926,541.94 126,415,179.68
============= ============== ============ ============= ============= ==============
</TABLE>
<PAGE>
CoreFund Treasury Reserve Fund
Conestoga US Treasury Securities Fund
Pro-Forma Combined Statement of Assets and Liabilities
October 31, 1995
(Unaudited)
<TABLE>
<CAPTION>
CoreFund Conestoga
Treasury US Treasury
Reserve Securities Pro-Forma
Fund Fund Combined
<S> <C> <C> <C>
ASSETS
Investments, @ value (Cost
$492,594,075 and $447,275,157
respectively) $492,594,075 $447,275,157 $939,869,232
Cash 979 93 1,072
Dividends and Interest receivable 409,437 173,647 583,084
Prepaid expenses 20,516 51,788 72,304
------------ ------------ ------------
Total Assets 493,025,007 447,500,685 940,525,692
------------ ------------ ------------
LIABILITIES
Dividends payable 2,148,866 1,917,532 4,066,398
Accrued expenses payable 315,438 324,215 639,653
------------ ------------ ------------
Total Liabilities 2,464,304 2,241,747 4,706,051
------------ ------------ ------------
TOTAL NET ASSETS $490,560,703 $445,258,938 $935,819,641
============ ============ ============
Total Net Assets by Class of Shares
Institutional Class $474,243,922 444,528,715 $918,772,637
Retail Class $ 16,316,781 730,223 $ 17,047,004
------------ ------------ ------------
$490,560,703 $445,258,938 $935,819,641
============ ============ ============
Shares Outstanding
Institutional Class
Pre-combination 474,228,668 444,422,563 N/A
Post-combination 128,487,354 0 128,487,354
Retail Class
Pre-combination 16,316,145 729,856 N/A
Post-combination 17,046,001 0 17,046,001
Net Asset Value, Offering and
Redemption Price Per Share
Institutional Class $ 1.00 $ 1.00 $ 1.00
Retail Class $ 1.00 $ 1.00 $ 1.00
</TABLE>
<PAGE>
CoreFund Cash Reserve Fund
Conestoga Cash Management Fund
Pro-Forma Combined Statement of Assets and Liabilities
October 31, 1995
(Unaudited)
<TABLE>
<CAPTION>
Conestoga
Corefund Cash
Cash Reserve Management Pro-Forma
Fund Fund Combined
<S> <C> <C> <C>
ASSETS
Investments, @ value (Cost
$591,845,176 and $242,941,744
respectively) $591,845,176 $242,941,744 $834,786,920
Cash 0 73 73
Dividends and Interest receivable 357,937 118,748 476,685
Prepaid expenses 0 32,022 32,022
------------ ------------ ------------
Total Assets 592,203,113 243,092,587 835,295,700
------------ ------------ ------------
LIABILITIES
Investment Securities Purchased 0 3,997,280 3,997,280
Dividends payable 2,648,761 1,027,217 3,675,978
Accrued expenses payable 409,070 189,734 598,804
------------ ------------ ------------
Total Liabilities 3,057,831 5,214,231 8,272,062
------------ ------------ ------------
TOTAL NET ASSETS $589,145,282 $237,878,356 $827,023,638
============ ============ ============
Total Net Assets by Class of Shares
Institutional Class $570,032,471 $234,519,918 $804,552,389
Retail Class 19,112,811 3,358,438 22,471,249
------------ ------------ ------------
$589,145,282 $237,878,356 $827,023,638
============ ============ ============
Shares Outstanding
Institutional Class
Pre-combination 570,037,873 234,652,830 N/A
Post-combination 804,690,703 0 804,690,703
Retail Class
Pre-combination 19,113,426 3,361,129 N/A
Post-combination 22,474,555 0 22,474,555
Net Asset Value, Offering and Redemption
Price Per Share
Institutional Class $ 1.00 $ 1.00 $ 1.00
Retail Class $ 1.00 $ 1.00 $ 1.00
</TABLE>
<PAGE>
CoreFund Tax-Free Reserve Fund
Conestoga Tax-Free Fund
Pro-Forma Combined Statement of Assets and Liabilities
October 31, 1995
(Unaudited)
<TABLE>
<CAPTION>
CoreFund
Tax-Free Conestoga
Reserve Tax-Free Pro-Forma
Fund Fund Combined
-------- ---------- ----------
<S> <C> <C> <C>
ASSETS
Investments, @ value (Cost
$71,290,183 and $61,736,077
respectively) $ 71,290,183 $ 61,736,077 $ 133,026,260
Dividends and Interest receivable 310,510 343,207 653,717
Prepaid Expenses 2,141 11,206 13,347
------------- ------------- -------------
Total Assets 71,602,834 62,090,490 133,693,324
------------- ------------- -------------
LIABILITIES
Cash/Cash Overdraft (54,143) (67,747) (13,604)
Dividends payable 179,278 175,826 355,104
Accrued expenses payable 60,170 55,775 115,945
Investment Securities Purchased 1,976,178 0 1,976,178
------------- ------------- -------------
Total Liabilities 2,161,483 299,348 2,460,831
------------- ------------- -------------
TOTAL NET ASSETS $ 69,441,351 $ 61,791,142 $ 131,232,493
============= ============= =============
Total Net Assets by Class of Shares
Institutional Class $ 67,947,223 $ 60,508,879 $ 128,456,102
Retail Class 1,494,128 1,282,263 2,776,391
------------- ------------- -------------
$ 69,441,351 $ 61,791,142 $ 131,232,493
============= ============= =============
Shares Outstanding
Institutional Class
Pre-combination 67,995,424 60,491,930 N/A
Post-combination 128,504,303 0 128,504,303
Retail Class
Pre-combination 1,495,186 1,281,648 N/A
Post-combination 2,776,834 0 2,776,834
Net Asset Value, Offering and Redemption Price Per Share
Institutional Class 1.00 1.00 1.00
Retail Class 1.00 1.00 1.00
</TABLE>
<PAGE>
CoreFund Intermediate Bond Fund
Conestoga Intermediate Income Fund
Pro-Forma Combined Statement of Assets and Liabilities
October 31, 1995
(Unaudited)
<TABLE>
<CAPTION>
CoreFund Conestoga
Intermediate Intermediate Pro-Forma
Bond Fund Income Fund Combined
<S> <C> <C> <C>
ASSETS
Investments, @ value (Cost
$56,462,364 and $135,703,358
respectively) $ 57,046,248 $137,102,062 $194,148,310
Cash 589 4,152 4,741
Dividends and Interest receivable 635,404 2,510,392 3,145,796
Investment securities sold 0 613,081 613,081
Capital shares sold receivable 0 241,195 241,195
Prepaid Expenses 0 78,239 78,239
------------ ------------ ------------
Total Assets 57,682,241 140,549,121 198,231,362
------------ ------------ ------------
LIABILITIES
Investment securities purchased 0 830,408 830,408
Dividends payable 272,457 0 272,457
Other Payables 0 44,793 44,793
Accrued expenses payable 19,793 220,924 220,717
------------ ------------ ------------
Total Liabilities 292,250 1,076,125 1,368,375
------------ ------------ ------------
TOTAL NET ASSETS $ 57,389,991 $139,472,996 $196,862,987
============ ============ ============
Total Net Assets by Class of Shares
Institutional Class $ 55,364,689 $138,243,515 $193,608,204
Retail Class 2,025,303 1,229,481 3,254,784
------------ ------------ ------------
$ 57,389,992 $139,472,996 $196,862,988
============ ============ ============
Shares Outstanding
Institutional Class
Pre-combination $ 5,602,290 $ 12,909,945 N/A
Post-combination $ 19,590,994 $ 0 $ 19,590,994
Retail Class
Pre-combination 204,958 114,722 N/A
Post-combination 329,380 0 329,380
Net Asset Value, Offering and Redemption
Price Per Share
Institutional Class $ 9.88 $ 10.71 $ 9.88
Retail Class $ 9.88 $ 10.72 $ 9.88
Maximum offering price per retail class $ 10.21 $ 10.94 $ 10.21
Maximum sales load imposed on purchases
of retail class of shares 3.25% 2.00% 3.25%
</TABLE>
<PAGE>
CoreFund PA Municipal Bond Fund
Conestoga PA Tax-Free Bond Fund
Pro-Forma Combined Statement of Assets and Liabilities
October 31, 1995
(Unaudited)
<TABLE>
<CAPTION>
CoreFund Conestoga
PA PA
Municipal Bond Tax-Free Bond Pro-Forma
Fund Fund Combined
<S> <C> <C> <C>
ASSETS
Investments, @ value (Cost
$2,917,497 and $6,839,773
respectively) $ 3,045,275 $ 6,851,753 $ 9,897,028
Cash 6,789 103,030 109,819
Dividends and Interest receivable 54,368 86,922 141,290
Capital shares sold receivable 0 39,195 39,195
Prepaid expenses 10,584 2,887 13,471
----------- ----------- -----------
Total Assets 3,117,016 7,083,787 10,200,803
----------- ----------- -----------
LIABILITIES
Capital shares redeemed payable 0 279,486 279,486
Dividends payable 13,272 0 13,272
Accrued expenses payable 7,951 7,974 15,925
----------- ----------- -----------
Total Liabilities 21,223 287,460 308,683
----------- ----------- -----------
TOTAL NET ASSETS $ 3,095,793 $ 6,796,327 $ 9,892,120
=========== =========== ===========
Total Net Assets by Class of Shares
Institutional Class $ 2,789,277 $ 5,976,630 $ 8,765,907
Retail Class 306,516 819,697 1,126,213
----------- ----------- -----------
$ 3,095,793 $ 6,796,327 $ 9,892,120
=========== =========== ===========
Shares Outstanding
Institutional Class
Pre-combination 267,691 584,020 N/A
Post-combination 841,264 0 841,264
Retail Class
Pre-combination 29,416 80,106 N/A
Post-combination 108,082 0 108,082
Net Asset Value, Offering and
Redemption Price Per Share
Institutional Class $ 10.42 $ 10.23 $ 10.42
Retail Class $ 10.42 $ 10.23 $ 10.42
Maximum offering price per retail class $ 10.77 $ 10.44 $ 10.77
Maximum sales load imposed on purchases
of retail class of shares 3.25% 2.00% 3.25%
</TABLE>
<PAGE>
CoreFund Balanced Fund
Conestoga Balanced Fund
Pro-Forma Combined Statement of Assets and Liabilities
October 31, 1995
(Unaudited)
<TABLE>
<CAPTION>
CoreFund Conestoga
Balanced Balanced Pro-Forma
Fund Fund Combined
<S> <C> <C> <C>
ASSETS
Investments, @ value (Cost
$60,380,939 and $37,497,969
respectively) 68,183,144 38,356,565 106,539,709
Cash 250 1,366 1,616
Dividends and Interest receivable 335,296 447,299 782,595
Investment securities sold 0 185,422 185,422
Capital shares sold receivable 0 3,574 3,574
Prepaid expenses 86,812 23,692 110,504
------------ ------------ ------------
Total Assets 68,605,502 39,017,918 107,623,420
------------ ------------ ------------
LIABILITIES
Capital shares redeemed payable 0 699 699
Accrued expenses payable 133,585 39,995 173,580
Other payables 0 2,570 2,570
Investment Securities Purchased 498,350 410,694 909,044
------------ ------------ ------------
Total Liabilities 631,935 453,958 1,085,893
------------ ------------ ------------
TOTAL NET ASSETS $ 67,973,567 $ 38,563,960 $106,537,527
------------ ------------ ------------
Total Net Assets by Class of Shares
Institutional Class $ 65,434,187 $ 38,494,620 $103,928,807
Retail Class 2,539,380 69,340 2,608,720
------------ ------------ ------------
$ 67,973,567 $ 38,563,960 $106,537,527
============ ============ ============
Shares Outstanding
Institutional Class
Pre-combination 5,569,819 3,707,254 N/A
Post-combination 8,845,957 0 8,845,957
Retail Class
Pre-combination 216,129 6,676 N/A
Post-combination 222,030 0 222,030
Net Asset Value, Offering and Redemption
Price Per Share
Institutional Class $ 11.75 $ 10.38 $ 11.75
Retail Class $ 11.75 $ 10.39 $ 11.75
Maximum offering price per retail class $ 12.14 $ 10.60 $ 12.14
Maximum sales load imposed on purchases
of retail class of shares 3.25% 2.00% 3.25%
</TABLE>
<PAGE>
CoreFund International Growth Fund
Conestoga International Equity Fund
Pro-Forma Combined Statement of Assets and Liabilities
October 31, 1995
(Unaudited)
<TABLE>
<CAPTION>
CoreFund Conestoga
International International Pro-Forma
Growth Fund Equity Fund Combined
<S> <C> <C> <C>
ASSETS
Investments, @ value (Cost
$105,859,974 and $12,574,795
respectively) $ 113,133,792 $ 13,281,388 $ 126,415,180
Cash 0 1,410 1,410
Dividends and Interest receivable 456,013 13,377 469,390
Capital shares sold receivable 0 1,482 1,482
Prepaid expenses 0 16,604 16,604
Investment Securities Sold 198,414 242,408 440,822
Income Receivable 0 108 108
Reclaim Receivable 0 723 723
------------- ------------- -------------
Total Assets 113,788,219 13,557,500 127,345,719
------------- ------------- -------------
LIABILITIES
Cash overdraft 41,780 0 41,780
Capital shares redeemed payable 0 470 470
Accrued expenses payable 202,495 35,452 237,947
Investment Securities Purchased 1,138,928 187,000 1,325,928
Unrealized gain (loss) on
currency contracts 138 (46,268) (46,130)
------------- ------------- -------------
Total Liabilities 1,383,341 176,654 1,559,995
------------- ------------- -------------
TOTAL NET ASSETS $ 112,404,878 $ 13,380,846 $ 125,785,724
============= ============= =============
Total Net Assets by Class of Shares
Institutional Class $ 110,471,955 $ 13,372,041 $ 123,843,996
Retail Class 1,932,923 8,805 1,941,728
------------- ------------- -------------
$ 112,404,878 $ 13,380,846 $ 125,785,724
============= ============= =============
Shares Outstanding
Institutional Class
Pre-combination 8,680,307 1,214,983 N/A
Post-combination 9,730,742 0 9,730,742
Retail Class
Pre-combination 152,205 758 N/A
Post-combination 152,898 0 152,898
Net Asset Value, Offering and Redemption
Price Per Share
Institutional Class $ 12.73 $ 11.01 $ 12.73
Retail Class $ 12.70 $ 11.62 $ 12.70
Maximum offering price per retail class $ 13.13 $ 11.85 $ 13.13
Maximum sales load imposed on purchases
of retail class of shares 3.25% 2.00% 3.25%
</TABLE>
<PAGE>
CoreFund Value Equity Fund
Conestoga Equity Fund
Pro-Forma Combined Statement of Assets and Liabilities
Investment Securities Sold
(Unaudited)
<TABLE>
<CAPTION>
CoreFund
Value Conestoga
Equity Equity Pro-Forma
Fund Fund Combined
<S> <C> <C> <C>
ASSETS
Investments, @ value (Cost
$33,122,312 and $368,840,462
respectively) $ 33,961,457 $385,182,148 $419,143,605
Cash 746 0 746
Dividends and Interest receivable 9,548 374,662 384,210
Capital shares sold receivable 40,000 837,388 877,388
Investment Securities Sold 0 7,099,622 7,099,622
Prepaid expenses 42,517 31,456 73,973
------------ ------------ ------------
Total Assets 34,054,268 393,525,276 427,579,544
------------ ------------ ------------
LIABILITIES
Cash overdraft 0 4,739 4,739
Capital shares redeemed payable 85,680 175,502 261,182
Accrued expenses payable 0 507,498 507,498
Investment Securities Purchased 835,881 7,894,617 8,730,498
------------ ------------ ------------
Total Liabilities 921,561 8,582,356 9,503,917
------------ ------------ ------------
TOTAL NET ASSETS $ 33,132,707 $384,942,920 $418,075,627
============ ============ ============
Total Net Assets by Class of Shares
Institutional Class $ 29,688,256 $378,352,322 $408,040,578
Retail Class 3,444,452 6,590,598 10,035,050
------------ ------------ ------------
$ 33,132,708 $384,942,920 $418,075,628
============ ============ ============
Shares Outstanding
Institutional Class
Pre-combination 2,131,045 22,159,807 N/A
Post-combination (1) 23,898,626 0 23,898,626
Retail Class
Pre-combination 246,805 385,955 N/A
Post-combination (2) 587,667 0 587,667
Net Asset Value, Offering and
Redemption Price Per Share
Institutional Class $ 13.93 $ 17.07 $ 17.07
Retail Class $ 13.96 $ 17.08 $ 17.08
Maximum offering price per retail class $ 14.42 $ 17.42 $ 17.65
Maximum sales load imposed on purchases
of retail class of shares 3.25% 2.00% 3.25%
</TABLE>
(1) Reduction in shares due to a 81.59% reverse stock split
(2) Reduction in shares due to a 81.73% reverse stock split
<PAGE>
CoreFund Treasury Reserve Fund
Conestoga US Treasury Securities Fund
Pro-Forma Combined Statement of Operations
For the Twelve Months Ended October 31, 1995
(Unaudited)
<TABLE>
<CAPTION>
Conestoga
CoreFund US Treasury
Treasury Reserve Securities Pro-Forma Pro-Forma
Fund Fund Adjustments Combined
<S> <C> <C> <C> <C>
Investment Income
Interest $28,278,700 $21,000,859 0 $49,279,559
Dividends 0 0 0 0
----------- ----------- -------- -----------
Total Investment Income 28,278,700 21,000,859 0 49,279,559
----------- ----------- -------- -----------
Expenses
Investment Advisory Fees 2,442,549 1,457,258 (487,180) (1) 3,412,627
Administration Fees 1,221,251 670,514 241,127 (1) 2,132,892
Custodian Fees 0 99,751 (99,751) (1) 0
Transfer Agent Fees 166,066 61,098 (56,533) (1) 170,631
Service Fees 0 160,346 (160,346) (1) 0
Distribution Fees 36,652 136,344 (108,012) (1) 64,984
Legal and Audit 85,224 115,539 (81,301) (2) 119,462
Printing 61,344 42,977 (18,043) (2) 86,278
Registration Fees 54,838 62,924 0 117,762
Trustees' Fees and Officers'
Salaries 25,524 24,019 (16,359) (2) 33,184
Organization and Other 109,928 44,923 (92,088) (2) 62,763
----------- ----------- -------- -----------
4,203,376 2,875,693 (878,486) 6,200,583
Less: Fees waived & Expenses
Reimbursed (1,807,526) (608,930) 631,956 (3) (1,784,500)
----------- ----------- -------- -----------
Total Expenses 2,395,850 2,266,763 (246,530) 4,416,083
----------- ----------- -------- -----------
NET INVESTMENT INCOME 25,882,850 18,734,096 246,530 44,863,476
----------- ----------- -------- -----------
Realized and Unrealized Gain (Loss) on
Investments Transactions
Net realized gain (loss) on investment
transactions 15,303 41,347 0 56,650
Change in unrealized appreciation
(depreciation) 0 0 0 0
Net Realized and Unrealized
Gain (Loss) on Investment Transactions 15,303 41,347 0 56,650
----------- ----------- -------- -----------
Net Increase (Decrease) in Net Assets
Resulting from Operations $25,898,153 $18,775,443 $246,530 $44,920,126
=========== =========== ======== ===========
</TABLE>
- -----------------------------------------
(1) Based on the fee structure of the registrant and the assets of
the combined fund.
(2) Adjustments reflect expected savings when the two funds combine.
(3) Reflects pro-forma voluntary waiver of advisory and administration fees.
<PAGE>
CoreFund Cash Reserve Fund
Conestoga Cash Management Fund
Pro-Forma Combined Statement of Operations
For the Twelve Months Ended October 31, 1995
(Unaudited)
<TABLE>
<CAPTION>
Conestoga
CoreFund Cash
Cash Reserve Management Pro-Forma Pro-Forma
Fund Fund Adjustments Combined
<S> <C> <C> <C> <C>
Investment Income
Interest $33,026,315 $11,680,234 0 $44,706,549
Dividends 0 0 0 0
----------- ----------- -------- -----------
Total Investment Income 33,026,315 11,680,234 0 44,706,549
----------- ----------- -------- -----------
Expenses
Investment Advisory Fees 2,792,661 793,531 (557,493) (1) 3,028,699
Administration Fees 1,396,330 365,560 131,047 (1) 1,892,937
Custodian Fees 4 64,305 (64,309) (1) 0
Transfer Agent Fees 193,594 44,325 (86,484) (1) 151,435
Service Fees 0 145,040 (145,040) (1) 0
Distribution Fees 42,711 7,182 1,893 (1) 51,786
Legal and Audit 103,576 64,656 (62,210) (2) 106,022
Printing 73,090 19,867 (16,386) (2) 76,571
Registration Fees 70,060 50,127 0 120,187
Trustees' Fees 31,432 10,790 (12,771) (2) 29,451
Organization and Other 127,376 18,962 (108,484) (2) 37,854
----------- ----------- -------- -----------
4,830,834 1,584,345 (920,237) 5,494,942
Less: Fees waived & Expenses Reimbursed (2,066,500) (459,548) 944,483 (3) (1,581,565)
----------- ----------- -------- -----------
Total Expenses 2,764,334 1,124,797 24,246 3,913,377
----------- ----------- -------- -----------
NET INVESTMENT INCOME 30,261,981 10,555,437 (24,246) 40,793,172
----------- ----------- -------- -----------
Realized and Unrealized Gain (Loss) on
Investments Transactions
Net realized gain (loss) on investment
transactions (9,022) 2,310 0 (6,712)
Change in unrealized appreciation
(depreciation) 0 0 0 0
Net Realized and Unrealized
Gain (Loss) on Investment Transactions (9,022) 2,310 0 (6,712)
----------- ----------- -------- -----------
Net Increase (Decrease) in Net Assets
Resulting from Operations $30,252,959 $10,557,747 ($24,246) $40,786,460
=========== =========== ======== ===========
</TABLE>
- -----------------------------------
(1) Based on the fee structure of the registrant and the assets of
the combined fund.
(2) Adjustments reflect expected savings when the two funds combine.
(3) Reflects pro-forma voluntary waiver of advisory and administration fees.
<PAGE>
CoreFund Tax-Free Reserve Fund
Conestoga Tax-Free Fund
Pro-Forma Combined Statement of Operations
For the Twelve Months Ended October 31, 1995
(Unaudited)
<TABLE>
<CAPTION>
CoreFund
Tax-Free Conestoga
Reserve Tax-Free Pro-Forma Pro-Forma
Fund Fund Adjustments Combined
<S> <C> <C> <C> <C>
Investment Income
Interest $2,858,151 $2,483,931 0 $5,342,082
Dividends 0 0 0 0
---------- ---------- -------- ----------
Total Investment Income 2,858,151 2,483,931 0 5,342,082
---------- ---------- -------- ----------
Expenses
Investment Advisory Fees 374,654 259,383 (74,989) (1) 559,048
Administration Fees 187,327 120,127 41,951) (1) 349,405
Custodian Fees 0 26,780 (26,780) (1) 0
Transfer Agent Fees 25,277 22,836 (20,161) (1) 27,952
Service Fees 0 53,220 (53,220) (1) 0
Distribution Fees 4,849 3,238 1,714 (1) 9,801
Legal and Audit 13,130 17,889 (11,449) (2) 19,570
Printing 8,993 9,231 (4,090) (2) 14,134
Registration Fees 8,180 20,521 0 28,701
Trustees' Fees 3,684 4,340 (2,588) (2) 5,436
Organization and Other 15,184 6,672 (11,059) (2) 10,797
---------- ---------- -------- ----------
641,278 544,237 (160,671) 1,024,844
Less: Fees waived & Expenses Reimbursed (277,267) (248,289) 223,299 (3) (302,257)
---------- ---------- -------- ----------
Total Expenses 364,011 295,948 62,628 722,587
---------- ---------- -------- ----------
NET INVESTMENT INCOME 2,494,140 2,187,983 (62,628) 4,619,495
---------- ---------- -------- ----------
Realized and Unrealized Gain (Loss) on
Investments Transactions
Net realized gain (loss) on investment
transactions (2,150) (3,824) 0 (5,974)
Change in unrealized appreciation
(depreciation) 0 0 0 0
Net Realized and Unrealized
Gain (Loss) on Investment Transactions (2,150) (3,824) 0 (5,974)
---------- ---------- -------- ----------
Net increase (Decrease) in Net Assets
Resulting from Operations $2,491,990 $2,184,159 ($62,628) $4,613,521
========== ========== ======== ==========
</TABLE>
- --------------
(1) Based on the fee structure of the registrant and the assets of
the combined fund.
(2) Adjustments reflect expected savings when the two funds combine.
(3) Reflects pro-forma voluntary waiver of advisory and administration fees.
<PAGE>
CoreFund Intermediate Bond Fund
Conestoga Intermediate Income Fund
Pro-Forma Combined Statement of Operations
For the Twelve Months Ended October 31, 1995
(Unaudited)
<TABLE>
<CAPTION>
Corefund Conestoga
Intermediate Intermediate
Bond Income Pro-Forma Pro-Forma
Fund Fund Adjustments Combined
<S> <C> <C> <C> <C>
Investment Income
Interest $ 3,771,682 $ 4,760,160 0 $ 8,531,842
Dividends 0 0 0 0
------------ ------------ --------- ------------
Total Investment Income 3,771,682 4,760,160 8,531,842
------------ ------------ --------- ------------
Expenses
Investment Advisory Fees 285,898 551,495 (177,242)(1) 660,151
Administration Fees 142,949 129,365 57,761 (1) 330,075
Custodian Fees 4 38,342 (38,346)(1) 0
Transfer Agent Fees 18,718 36,212 (28,524)(1) 26,406
Service Fees 0 14,092 (14,092)(1) 0
Distribution Fees 9,397 3,608 (181)(1) 12,824
Legal and Audit 9,722 25,720 (16,955)(2) 18,487
Printing 5,680 8,926 (1,254)(2) 13,352
Registration Fees 2,592 47,046 0 49,638
Trustees' Fees 3,241 4,277 (2,383)(2) 5,135
Organization and Other 15,561 11,728 (10,762)(2) 16,527
------------ ------------ --------- ------------
493,762 870,811 (231,978) 1,132,595
Less: Fees waived & Expenses
Reimbursed (137,211) (386,232) 77,025 (3) (446,418)
------------ ------------ --------- ------------
Total Expenses 356,551 484,579 (154,953) 686,177
------------ ------------ --------- ------------
NET INVESTMENT INCOME 3,415,131 4,275,581 154,953 7,845,665
------------ ------------ --------- ------------
Realized and Unrealized Gain (Loss)
on Investments Transactions
Net realized gain (loss) on
investment transactions (140,711) 1,152,428 0 1,011,717
Change in unrealized
appreciation (depreciation) 1,945,357 1,825,062 0 3,770,419
Net Realized and Unrealized
Gain (Loss) on Investment
Transactions 1,804,646 2,977,490 0 4,782,136
------------ ------------ --------- ------------
Net Increase (Decrease) in Net
Assets Resulting from Operations $ 5,219,777 $ 7,253,070 $ 154,953 $ 12,627,801
============ ============ ======== ============
</TABLE>
- -------------------------------------
(1) Based on the fee structure of the registrant and the assets of
the combined fund.
(2) Adjustments reflect expected savings when the two funds combine.
(3) Reflects pro-forma voluntary waiver of advisory and administration fees.
<PAGE>
CoreFund PA Municipal Fund
Conestoga PA Tax-Free Bond Fund
Pro-Forma Combined Statement of Operations
For the Twelve Months Ended October 31, 1995
(Unaudited)
<TABLE>
<CAPTION>
CoreFund Conestoga
PA Municipal PA Tax-Free Pro-Forma Pro-Forma
Fund Bond Fund Adjustments Combined
<S> <C> <C> <C> <C>
Investment Income
Interest $ 148,872 $ 323,038 0 $ 471,910
Dividends 0 0 0 0
----------- ----------- ----------- -----------
Total Investment Income 148,872 323,038 0 471,910
----------- ----------- ----------- -----------
Expenses
Investment Advisory Fees 12,760 46,358 (15,017)(1) 44,101
Administration Fees 6,380 11,558 4,112 22,050
Custodian Fees 0 21,079 (21,079)(1) 0
Transfer Agent Fees 1,659 10,885 (10,780)(1) 1,764
Service Fees 0 5,239 (5,239)(1) 0
Distribution Fees 632 1,552 277 2,461
Legal and Audit 893 3,384 (3,042)(2) 1,235
Printing 510 1,728 (1,346)(2) 892
Registration Fees 2,296 699 0 2,995
Trustees' Fees 255 439 (351)(2) 343
Organization and Other 4,177 1,739 (489)(2) 5,427
----------- ----------- ----------- -----------
29,562 104,660 (52,954) 81,268
Less: Fees waived &
Expenses Reimbursed (19,140) (72,626) 25,615 (66,151)
----------- ----------- ----------- -----------
Total Expenses 10,422 32,034 (27,339) 15,117
----------- ----------- ----------- -----------
NET INVESTMENT INCOME 138,450 291,004 27,339 456,793
----------- ----------- ----------- -----------
Realized and Unrealized Gain (Loss)
on Investments Transactions
Net realized gain (loss) on
investment transactions (8,784) (68,029) 0 (76,813)
Change in unrealized
appreciation (depreciation) 215,516 501,514 0 717,030
Net Realized and Unrealized
Gain (Loss) on Investment
Transactions 206,732 433,485 0 640,217
----------- ----------- ----------- -----------
Net Increase (Decrease) in Net
Assets Resulting from Operations $ 345,182 $ 724,489 $ 27,339 $ 1,097,010
=========== =========== =========== ===========
</TABLE>
- ----------------
(1) Based on the fee structure of the registrant and the assets of
the combined fund.
(2) Adjustments reflect expected savings when the two funds combine.
(3) Reflects pro-forma voluntary waiver of advisory and administration fees.
<PAGE>
CoreFund Balanced Fund
Conestoga Balanced Fund
Pro-Forma Combined Statement of Operations
For the Twelve Months Ended October 31, 1995
(Unaudited)
<TABLE>
<CAPTION>
CoreFund Conestoga
Balanced Balanced Pro-Forma Pro-Forma
Fund Fund Adjustments Combined
<S> <C> <C> <C> <C>
Investment Income
Interest $ 1,614,474 $ 426,640 0 $ 2,041,114
Dividends 740,800 104,596 0 845,396
------------ ------------ ------------ ------------
Total Investment Income 2,355,274 531,236 0 2,886,510
------------ ------------ ------------ ------------
Expenses
Investment Advisory Fees 413,868 89,444 (4,256)(1) 499,056
Administration Fees 147,810 20,274 10,150 (1) 178,234
Custodian Fees 0 2,028 (2,028)(1) 0
Transfer Agent Fees 18,528 3,503 (7,772)(1) 14,259
Service Fees 0 0 0 (1) 0
Distribution Fees 5,767 76 (27)(1) 5,816
Legal and Audit 9,806 4,240 (4,063)(2) 9,983
Printing 5,913 1,289 8 (2) 7,210
Registration Fees 8,180 4,254 0 12,434
Trustees' Fees 3,153 954 (1,334)(2) 2,773
Organization and Other 23,349 1,864 (12,320)(2) 12,893
------------ ------------ ------------ ------------
636,374 127,926 (21,642) 742,658
Less: Fees waived & Expenses
Reimbursed (201,060) (30,666) (65,234)(3) (166,492)
------------ ------------ ------------ ------------
Total Expenses 435,314 97,260 43,592 576,166
------------ ------------ ------------ ------------
NET INVESTMENT INCOME 1,919,960 433,976 (43,592) 2,310,344
------------ ------------ ------------ ------------
Realized and Unrealized Gain
(Loss) on Investments
Transactions
Net realized gain (loss) on
investment transactions 1,059,484 285,600 0 1,345,084
Change in unrealized
appreciation (depreciation) 8,452,088 858,609 0 9,310,697
Net Realized and Unrealized
Gain (Loss) on Investment
Transactions 9,511,572 1,144,209 0 10,655,781
------------ ------------ ------------ ------------
Net Increase (Decrease) in Net
Assets Resulting from
Operations $ 11,431,532 $ 1,578,185 ($ 43,592) $ 12,966,125
============ ============ ============ ============
</TABLE>
- ---------------
(1) Based on the fee structure of the registrant and the assets of
the combined fund.
(2) Adjustments reflect expected savings when the two funds combine.
(3) Reflects pro-forma voluntary waiver of advisory and administration fees.
<PAGE>
CoreFund International Growth Fund
Conestoga International Equity Fund
Pro-Forma Combined Statement of Operations
For the Twelve Months Ended October 31, 1995
(Unaudited)
<TABLE>
<CAPTION>
CoreFund Conestoga
International International
Growth Equity Pro-Forma Pro-Forma
Fund Fund Adjustments Combined
------------- ----------- ----------- ----------
<S> <C> <C> <C> <C>
Investment Income
Interest $ 342,672 $ 48,019 0 $ 390,691
Dividends 2,336,765 50,501 0 2,387,266
Net Foreign Tax Withholding (226,079) (6,450) 0 (232,529)
----------- ----------- ----------- -----------
Total Investment Income 2,453,358 92,070 0 2,545,428
----------- ----------- ----------- -----------
Expenses
Investment Advisory Fees 910,487 51,367 (10,277)(1) 951,577
Administration Fees 284,527 8,726 4,115 297,368
Custodian Fees 96,294 16,942 0 (1) 113,236
Transfer Agent Fees 47,866 1,439 (25,516)(1) 23,789
Distribution Fees 4,957 6 (53)(1) 4,910
Legal and Audit 15,247 1,482 (74)(2) 16,655
Printing 13,516 549 (2,036)(2) 12,029
Registration Fees 14,058 5,456 0 19,514
Trustees' Fees 3,998 315 313 4,626
Organization and Other 37,349 11,085 (21,417)(2) 27,017
----------- ----------- ----------- -----------
1,428,299 97,367 (54,945) 1,470,721
Less: Fees waived & Expenses Reimbursed (159,337) (2) 49,525 (109,814)
----------- ----------- ----------- -----------
Total Expenses 1,268,962 97,365 (5,420) 1,360,907
----------- ----------- ----------- -----------
NET INVESTMENT INCOME 1,184,396 (5,295) 5,420 1,184,521
Realized and Unrealized Gain (Loss) from
Investments and Foreign Currency
Net realized gain (loss) from:
Investments 1,163,510 (33,090) 0 1,130,420
Foreign Currency Transactions 1,065,899 233,706 0 1,299,605
Net Increase (Decrease) in unrealized
appreciation or (Depreciation) on:
Investments (6,459,978) 706,593 0 (5,753,385)
Translations of assets and
Liabilities in Foreign Currencies (110,493) 45,762 0 (64,731)
Net Realized and Unrealized Gain (Loss)
from Investments and Foreign Currency (4,341,062) 952,971 (3,388,091)
----------- ----------- ----------- -----------
Net Increase (Decrease) in Net Assets
Resulting from Operations $(3,156,666) $ 947,676 $ 5,420 $(2,203,570)
=========== =========== =========== ===========
</TABLE>
- -----------------------------
(1) Based on the fee structure of the registrant and the assets of
the combined fund.
(2) Adjustments reflect expected savings when the two funds combine.
(3) Reflects pro-forma voluntary waiver of advisory and administration fees.
<PAGE>
CoreFund Value Equity Fund
Conestoga Equity Fund
Pro-Forma Combined Statement of Operations
For the Twelve Months Ended October 31, 1995
(Unaudited)
<TABLE>
<CAPTION>
CoreFund Conestoga
Value Equity Equity Pro-Forma Pro-Forma
Fund Fund Adjustments Combined
<S> <C> <C> <C> <C>
Investment Income
Interest $ 36,914 $ 582,013 0 $ 618,927
Dividends 585,927 4,506,937 0 5,092,864
------------ ------------ ------------ ------------
Total Investment Income 622,841 5,088,950 0 5,711,791
------------ ------------ ------------ ------------
Expenses
Investment Advisory Fees 256,410 1,503,062 3,456 (1) 1,762,928
Administration Fees 85,470 352,407 157,707 (1) 595,584
Custodian Fees 4 71,199 (71,203)(1) 0
Transfer Agent Fees 11,333 85,642 (49,328)(1) 47,647
Service Fees 0 37,965 (37,965)(1) 0
Distribution Fees 10,964 17,151 (2,040)(1) 26,075
Legal and Audit 5,778 48,342 (20,762)(2) 33,358
Printing 3,761 24,590 (4,259)(2) 24,092
Registration Fees 4,257 113,778 0 118,035
Trustees' Fees 1,778 11,514 (4,026)(2) 9,266
Organization and Other 7,277 5,978 (6,574)(2) 6,681
------------ ------------ ------------ ------------
387,032 2,271,628 (34,994) 2,623,666
Less: Fees waived & Expenses Reimbursed (82,024) (107,015) (26,216)(3) (215,255)
------------ ------------ ------------ ------------
Total Expenses 305,008 2,164,613 (61,210) 2,408,411
------------ ------------ ------------ ------------
NET INVESTMENT INCOME 317,833 2,924,337 61,210 3,303,380
------------ ------------ ------------ ------------
Realized and Unrealized Gain (Loss) on
Investments Transactions
Net realized gain (loss) on investment
transactions 4,590,958 28,978,833 0 33,569,791
Change in unrealized appreciation
(depreciation) (2,442,005) 12,893,781 0 10,451,776
Net Realized and Unrealized
Gain (Loss) on Investment Transactions 2,148,953 41,872,614 0 44,021,567
------------ ------------ ------------ ------------
Net Increase (Decrease) in Net Assets
Resulting from Operations $ 2,466,786 $ 44,796,951 $ 61,210 $ 47,324,947
============ ============ ============ ============
</TABLE>
- ---------------------------------
(1) Based on the fee structure of the registrant and the assets of
the combined fund.
(2) Adjustments reflect expected savings when the two funds combine.
(3) Reflects pro-forma voluntary waiver of advisory and administration fees.
<PAGE>
Notes to Pro Forma Financial Statements of CoreFunds, Inc. and
The Conestoga Family of Funds
October 31, 1995
(Unaudited)
1. Basis of Combination
The pro forma combined portfolios of investments and pro forma combined
statements of assets and liabilities reflect the accounts of CoreFunds,
Inc. ("CoreFunds") and The Conestoga Family of Funds ("Conestoga Fund") at
October 31, 1995. The pro forma combined statements of operations reflect
the accounts of CoreFunds and the Conestoga Fund for the twelve months
ended October 31 1995. These combined pro forma financial statements have
been derived from the annual financial statements of Conestoga Fund as of
October 31, 1995, and from the books and records of CoreFunds utilized in
calculating daily net asset values for the twelve months ended October 31, 1995.
The pro forma combined financial statements give effect to the proposed
transfer of the assets and liabilities of Conestoga Fund in exchange for
shares of CoreFunds. The historical cost of investment securities will be
carried forward to the surviving portfolios and the results of operations
of the surviving portfolios for pre-combining periods will not be restated.
The pro forma statements do not reflect the expenses of CoreFunds and
Conestoga Fund in carrying out their obligations under the Agreement and Plan of
Reorganization as these expenses are immaterial to the pro forma financial
statements.
The accompanying pro forma financial statements should be read in
conjunction with the historical financial statements of the CoreFunds and
the Conestoga Fund included or incorporated by reference in the Statement
of Additional Information.
The portfolios affected by the proposed merger are as follows:
CoreFunds Portfolio Conestoga Fund Portfolio
CoreFunds Treasury Reserve Conestoga U.S. Treasury Securities
CoreFunds Cash Reserve Conestoga Cash Management
CoreFunds Tax-Free Reserve Conestoga Tax-Free Income
CoreFunds Intermediate Bond Conestoga Intermediate Income
CoreFunds Pennsylvania Municipal Bond Conestoga Pennsylvania Tax-Free Bond
CoreFunds Balanced Conestoga Balanced
CoreFunds International Growth Conestoga International Equity
CoreFunds Value Equity Conestoga Equity
CoreFunds Bond Conestoga Bond 1
CoreFunds Special Equity Conestoga Special Equity 1
CoreFunds Short-Term Income Conestoga Short Term Income 1
1. Pro forma financial statements not presented because acquired fund is
being merged into an inactive portfolio of the registrant.
<PAGE>
Notes to Pro Forma Financial Statements of CoreFunds, Inc. and
The Conestoga Family of Funds
October 31, 1995
(Unaudited)
2. Shares of Beneficial Interest
The pro forma net asset value per share assumes the issuance on October
31, 1995 of additional shares of CoreFunds to the holders of the Conestoga
Funds in conjunction with the proposed transactions.
3. Pro Forma Operations
The pro forma combined statements of operation assume historical rates of gross
investment income for the investments of each of the CoreFunds and each of the
Conestoga Funds. Accordingly, the combined gross investment income is equal to
the sum of each such funds gross investment income.Certain expenses have been
adjusted to reflect the expected expenses of the combined fund. Pro forma
operating expenses include the actual expenses of each of the CoreFunds and each
of the Conestoga Funds and of the pro forma combined fund adjusted for certain
items.
4. Surviving Entity
The CoreFunds Treasury Reserve Portfolio, Corefunds Cash Reserve Portfolio,
CoreFunds Tax Free Reserve Portfolio, CoreFunds Intermediate Bond Portfolio,
CoreFunds Pennsylvania Municipal Bond Portfolio, CoreFunds Balanced Portfolio,
CoreFunds International Growth Portfolio, will be the surviving entities for
accounting purposes. This determination was based on the following:
o The investment objectives, policies and restrictions of the above
CoreFunds portfolios will be the investment objectives, policies and
restrictions of the surviving portfolios.
o The composition of the surviving portfolio will more closely resemble
the composition of the above CoreFunds portfolios.
The Conestoga Equity Portfolio will be the surviving entity based on the
following:
o The investment objectives, policies and restrictions of the Conestoga
Equity Portfolio will be the investment objectives, policies and
restrictions of the surviving portfolio.
o The composition of the surviving portfolio will more closely resemble
the composition of the Conestoga Equity Portfolio.
o The CoreFunds Value Equity Portfolio is significantly smaller than
Conestoga Equity Portfolio.
<PAGE>
STATEMENT OF NET ASSETS
- --------------------------------------------------------------------------------
The Conestoga Funds--October 31, 1995
Equity Fund
<TABLE>
<CAPTION>
----------------------------------------------------------
Market
Description Shares Value (000)
----------------------------------------------------------
<S> <C> <C>
COMMON STOCK -- 98.5%
AEROSPACE & DEFENSE -- 0.9%
Lockheed Martin 25,401 $ 1,730
McDonnell Douglas 21,717 1,776
------
Total Aerospace & Defense 3,506
------
AIRCRAFT -- 2.3%
Allied Signal 84,775 3,603
Boeing 27,310 1,792
Textron 30,000 2,063
United Technologies 16,500 1,464
------
Total Aircraft 8,922
------
APPAREL/TEXTILES -- 0.5%
Burlington Industries* 49,771 554
Fruit Of The Loom* 75,000 1,303
------
Total Apparel/Textiles 1,857
------
AUTOMOTIVE -- 1.8%
Ford Motor 205,000 5,894
Magna International, Class A 27,500 1,189
------
Total Automotive 7,083
------
BANKS -- 10.0%
Bank Of Boston 74,000 3,293
BankAmerica 196,900 11,322
Chase Manhattan 206,600 11,774
Chemical Banking 103,000 5,858
Citicorp 99,000 6,423
------
Total Banks 38,670
------
BUILDING & CONSTRUCTION -- 0.6%
Webb (Dell E.) 105,000 2,179
------
Total Building & Construction 2,179
------
CHEMICALS -- 3.2%
Dow Chemical 25,525 1,752
Hercules 5,100 272
IMC Global 36,600 2,562
Monsanto 32,500 3,404
Praxair 155,000 4,185
------
Total Chemicals 12,175
------
COMMUNICATIONS EQUIPMENT -- 1.4%
First Alert* 33,800 524
Motorola 32,175 2,111
Qualcomm* 65,000 2,503
------
Total Communications Equipment 5,138
------
COMPUTER SOFTWARE -- 1.4%
Autotote -- Class A* 90,230 271
Computer Associates
International 52,500 2,887
International Game Technology 146,358 1,701
Pyxis* 24,839 314
------
Total Computer Software 5,173
------
COMPUTER AND OFFICE EQUIPMENT -- 3.1%
Hewlett Packard 14,330 1,327
IBM 98,000 9,531
Novell* 56,435 931
------
Total Computer and Office Equipment 11,789
------
<CAPTION>
----------------------------------------------------------
Market
Description Shares Value (000)
----------------------------------------------------------
<S> <C> <C>
COMPUTERS & SERVICES -- 2.9%
Apple Computer 94,000 $ 3,413
Compaq Computer* 57,500 3,206
Digital Equipment* 84,750 4,587
------
Total Computers & Services 11,206
------
CONCRETE & MINERAL PRODUCTS -- 0.5%
Owens Corning Fiberglass* 46,910 1,988
------
Total Concrete & Mineral Products 1,988
------
CONTAINERS & PACKAGING -- 0.4%
Owens-Illinois* 119,455 1,508
------
Total Containers & Packaging 1,508
------
ELECTRICAL SERVICES -- 6.3%
Central & South West 124,200 3,322
Consolidated Edison New York 142,000 4,313
Pacific Gas & Electric 120,800 3,549
Peco Energy 200,000 5,850
SCE 425,000 7,225
------
Total Electrical Services 24,259
------
ELECTRONIC AND OTHER ELECTRICAL EQUIPMENT -- 3.9%
General Electric 180,000 11,385
Philips Electronics ADR 75,000 2,897
Texas Instruments 13,100 894
------
Total Electronic and Other
Electrical Equipment 15,176
------
ENTERTAINMENT -- 0.3%
MGM Grand* 43,870 1,047
President Casinos* 31,325 96
------
Total Entertainment 1,143
------
ENVIRONMENTAL SERVICES -- 1.0%
Browning Ferris Industries 125,000 3,641
------
Total Environmental Services 3,641
------
FINANCIAL SERVICES -- 4.1%
Dean Witter Discover 89,013 4,428
Fleet Financial Group 55,000 2,131
Household International 38,000 2,138
ITT 40,000 4,901
MBNA 62,900 2,319
------
Total Financial Services 15,917
------
FOOD, BEVERAGE & TOBACCO -- 7.9%
Buenos Aires Embotellado-ADR 27,355 626
IBP 38,200 2,287
Nabisco Holdings -- Class A 179,500 4,824
Philip Morris Companies 173,860 14,691
RJR Nabisco Holdings 256,160 7,877
------
Total Food, Beverage & Tobacco 30,305
------
</TABLE>
11
<PAGE>
- -------------------------------------------------------------
<TABLE>
<CAPTION>
----------------------------------------------------------
Market
Description Shares Value (000)
----------------------------------------------------------
<S> <C> <C>
HOUSEHOLD PRODUCTS -- 0.4%
Maytag 85,800 $ 1,630
------
Total Household Products 1,630
------
INSURANCE -- 4.0%
Aetna Life & Casualty 30,000 2,111
Cigna 30,000 2,974
Equitable Companies 195,500 4,154
The Travelers Group 125,000 6,312
Transport Holdings -- Class A* 625 25
------
Total Insurance 15,576
------
MACHINERY -- 3.0%
Baker Hughes 90,000 1,766
Brunswick 80,800 1,576
Case Equipment 55,000 2,097
Caterpillar 33,700 1,891
Deere 40,000 3,575
McDermott International 30,635 486
------
Total Machinery 11,391
------
MEDICAL PRODUCTS & SERVICES -- 2.6%
Beverly Enterprises* 136,600 1,605
Community Psychiatric* 48,400 526
Coram Healthcare* 100,000 400
FHP International* 45,000 1,091
Foundation Health* 53,704 2,276
Humana* 122,300 2,585
Novacare* 25,964 162
United Healthcare 9,850 523
United States Surgical 37,557 920
------
Total Medical Products & Services 10,088
------
METALS & MINING -- 0.9%
Potash of Saskatchewan 49,400 3,439
------
Total Metals & Mining 3,439
------
OIL AND GAS FIELD EXPLORATION SERVICES -- 9.7%
Ashland 100,000 3,163
British Petroleum Plc ADR 92,000 8,118
Diamond Shamrock 31,750 818
Enron 85,000 2,922
Mobil 78,600 7,919
Repsol S.A. ADR 161,500 4,784
Royal Dutch Petroleum 53,550 6,580
Tosco 57,700 1,991
YPF Sociedad Anonima ADR 72,385 1,240
------
Total Oil and Gas Field
Exploration Services 37,535
------
PAPER & PAPER PRODUCTS -- 0.5%
International Paper 50,000 1,850
------
Total Paper & Paper Products 1,850
------
PHARMACEUTICALS -- 2.6%
Caremark International 23,200 479
Elan Public* 111,100 4,457
Merck 45,805 2,634
Mylan Laboratories 63,100 1,199
Teva Pharmaceutical Industries
ADR 32,672 1,282
------
Total Pharmaceuticals 10,051
------
<CAPTION>
----------------------------------------------------------
Market
Description Shares Value (000)
----------------------------------------------------------
<S> <C> <C>
PHOTOGRAPHIC EQUIPMENT & SUPPLIES -- 0.4%
Xerox 13,000 $ 1,687
------
Total Photographic Equipment & Supplies 1,687
------
RAILROADS -- 1.3%
Burlington Northern Santa Fe 30,000 2,517
CSX 28,600 2,395
------
Total Railroads 4,912
------
RESTAURANTS -- 2.0%
Darden Restaurants* 619,000 7,041
Rally's Hamburgers* 18,426 35
Vicorp Restaurants* 61,534 677
------
Total Restaurants 7,753
------
RETAIL -- 4.6%
Bed, Bath & Beyond* 7,600 238
Borders Group* 187,000 3,202
CML Group 275,000 1,581
Kroger* 169,505 5,657
Lowe's 159,200 4,298
Pep Boys 100,000 2,188
Vons* 23,000 584
------
Total Retail 17,748
------
RUBBER & PLASTIC -- 2.4%
Goodyear Tire & Rubber 245,000 9,310
------
Total Rubber & Plastic 9,310
------
SEMI-CONDUCTORS/INSTRUMENTS -- 2.5%
Intel 73,400 5,129
Micron Technology 24,500 1,730
National Semiconductor* 76,000 1,853
VLSI Technology 40,000 940
------
Total Semi-Conductors/Instruments 9,652
------
SERVICES-EMPLOYMENT AGENCIES -- 0.8%
Manpower 116,000 3,147
------
Total Services-Employment Agencies 3,147
------
SPECIALTY MACHINERY -- 0.9%
Westinghouse Electric 235,000 3,319
------
Total Specialty Machinery 3,319
------
STEEL & STEEL WORKS -- 1.6%
Birmingham Steel 8,070 123
Phelps Dodge 46,600 2,953
USX -- U.S. Steel Group 100,100 2,991
------
Total Steel & Steel Works 6,067
------
</TABLE>
12
<PAGE>
STATEMENT OF NET ASSETS
- --------------------------------------------------------------------------------
The Conestoga Funds--October 31, 1995
Equity Fund -- continued
<TABLE>
<CAPTION>
----------------------------------------------------------
Shares/Face Market
Description Amount (000) Value (000)
----------------------------------------------------------
<S> <C> <C>
TELEPHONES & TELECOMMUNICATION -- 5.6%
Cellular Communications -- Class
A* 24,773 $ 1,328
MCI Communications 178,475 4,451
SBC Communications 80,000 4,470
Worldcom* 350,100 11,422
------
Total Telephones & Telecommunication 21,671
------
WHOLESALE -- 0.2%
Jan Bell Marketing* 80,480 272
Michael Foods 3,726 45
Universal -- Va 21,770 457
------
Total Wholesale 774
------
Total Common Stock
(Cost $362,939,414) 379,235
------
PREFERRED STOCKS -- 0.7%
PRINTING & PUBLISHING -- 0.4%
News -- Preferred Shares ADR 72,915 1,331
------
Total Printing & Publishing 1,331
------
TELEPHONES & TELECOMMUNICATION -- 0.3%
Cellular Communications
Preferred* 23,866 1,280
------
Total Telephones & Telecommunication 1,280
------
Total Preferred Stocks
(Cost $2,565,048) 2,611
------
COMMERCIAL PAPER -- 0.9%
American Express
5.750%, 11/01/95 $ 3,336 3,336
------
Total Commercial Paper
(Cost $3,336,000) 3,336
------
Total Investments -- 100.1%
(Cost $368,840,462) 385,182
------
OTHER ASSETS AND LIABILITIES -- (0.1%)
Other Assets and Liabilities,
Net (239)
------
Total Other Assets and Liabilities (239)
------
NET ASSETS:
Portfolio shares of the
Institutional Class (unlimited
authorization -- $0.001 par
value) based on 22,159,807
outstanding shares of
beneficial interest 334,512
Portfolio shares of the Retail
Class (unlimited
authorization -- $0.001 par
value) based on 385,955
outstanding shares of
beneficial interest 5,056
Undistributed net investment
income 101
Undistributed net realized gain
on investments 28,932
Unrealized appreciation on
investments 16,342
------
Total Net Assets -- 100.0% $ 384,943
======
<CAPTION>
----------------------------------------------------------
Market
Description Shares Value (000)
----------------------------------------------------------
<S> <C> <C>
Net Asset Value, Offering Price
and Redemption Price Per
Share -- Institutional Class $ 17.07
======
Net Asset Value and Redemption
Price Per Share -- Retail Class $ 17.08
======
Maximum Offering Price Per
Share -- Retail Class
($17.08 / 98.0%) $ 17.43
======
* Non-income producing security
ADR American Depository Receipt
SPECIAL EQUITY FUND
COMMON STOCK -- 96.1%
AEROSPACE & DEFENSE -- 1.0%
McDonnell Douglas 7,500 $ 613
------
Total Aerospace & Defense 613
------
AGRICULTURE PRODUCTS -- 0.8%
Terra Industries 35,000 442
------
Total Agriculture Products 442
------
APPAREL/TEXTILES -- 3.7%
Burlington Industries* 5,117 57
Cyrk International* 20,100 221
Fieldcrest Cannon* 17,400 335
Gadzooks* 1,000 19
Gucci Group* 2,700 81
Haggar 20,000 330
Oneita Industries* 55,000 371
Oxford Industries 20,000 325
Quaker Fabric* 11,900 107
Supreme International* 18,400 294
------
Total Apparel/Textiles 2,140
------
AUTOMOTIVE -- 1.2%
Ford 13,000 373
Magna International -- Class A 6,500 281
Walbro 3,000 59
------
Total Automotive 713
------
BANKS -- 5.4%
Bank of Boston 14,500 645
BankAmerica 13,900 799
Barnett Banks 7,000 387
Chase Manhattan 12,000 684
Chemical Banking 9,100 518
MBNA 2,200 81
------
Total Banks 3,114
------
BROADCASTING, NEWSPAPERS & ADVERTISING -- 0.1%
Argyle Television* 2,000 34
------
Total Broadcasting, Newspapers & Advertising 34
------
</TABLE>
13
<PAGE>
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
----------------------------------------------------------
Market
Description Shares Value (000)
----------------------------------------------------------
<S> <C> <C>
BUILDING & CONSTRUCTION -- 1.4%
Empresas ICA S.A.-ADS 7,500 $ 71
Webb (Del. E.) 35,000 727
------
Total Building & Construction 798
------
CHEMICALS -- 0.4%
Kinark* 65,000 195
------
Total Chemicals 195
------
COMMUNICATIONS EQUIPMENT -- 1.0%
ECI Telecommunications* 9,000 171
First Alert* 22,000 341
Qualcomm* 1,500 58
------
Total Communications Equipment 570
------
COMPUTER SOFTWARE -- 4.7%
Autotote -- Class A* 35,000 105
Checkfree* 3,600 76
Computer Associates
International 8,500 468
Computervision* 72,500 850
Control Data Systems* 60,000 795
Gametek* 10,000 18
Pyxis* 16,947 214
Simware* 18,400 173
------
Total Computer Software 2,699
------
COMPUTERS & SERVICES -- 2.4%
IBM 8,500 826
International Game Technology 21,514 250
Landmark Graphics* 7,200 157
Mizar* 18,200 155
------
Total Computers & Services 1,388
------
CONCRETE & MINERAL PRODUCTS -- 1.3%
Owens Corning Fiberglass* 17,500 742
------
Total Concrete & Mineral Products 742
------
CONTAINERS & PACKAGING -- 0.6%
Owens-Illinois* 25,700 324
------
Total Containers & Packaging 324
------
ELECTRICAL SERVICES -- 1.0%
SCE 35,000 595
------
Total Electrical Services 595
------
ELECTRONIC GAMING DEVICES -- 1.1%
Mikohn Gaming* 110,000 495
Video Lottery Technologies* 34,200 162
------
Total Electronic Gaming Devices 657
------
ELECTRONIC AND OTHER ELECTRICAL EQUIPMENT -- 1.9%
Cincinnati Microwave* 27,300 157
Philips Electronics ADR* 18,300 707
Rexel* 18,800 216
Smartflex Systems* 2,300 34
------
Total Electronic and Other Electrical Equipment 1,114
------
<CAPTION>
----------------------------------------------------------
Market
Description Shares Value (000)
----------------------------------------------------------
<S> <C> <C>
ENERGY & POWER -- 1.3%
Zurn Industries 30,000 $ 750
------
Total Energy & Power 750
------
ENGINEERING CONSULTING -- 0.1%
Corrpro Companies* 9,700 55
------
Total Engineering Consulting 55
------
ENTERTAINMENT -- 1.0%
Boomtown* 17,000 125
Cinergi Pictures Entertainment* 14,300 55
Hollywood Park* 20,000 194
President Casinos* 17,226 53
Sports Club* 38,000 162
------
Total Entertainment 589
------
ENVIRONMENTAL CONSULTING -- 0.5%
Harding Associates* 40,300 277
------
Total Environmental Consulting 277
------
ENVIRONMENTAL SERVICES -- 1.3%
Browning Ferris Industries 25,000 728
------
Total Environmental Services 728
------
FINANCIAL SERVICES -- 3.7%
Donaldson, Luftkin, & Jenrette* 4,800 143
Household International 5,600 315
ITT 5,000 613
Jayhawk Acceptance* 27,400 329
WFS Financial* 45,000 747
------
Total Financial Services 2,147
------
FOOD, BEVERAGE & TOBACCO -- 5.6%
Cott 19,000 157
Michael Foods 51,476 624
Pepsi-Cola Puerto Rico Bottling* 69,200 944
Philip Morris Companies 8,500 718
RJR Nabisco Holdings 19,200 590
Rymer Foods* 178,600 223
------
Total Food, Beverage & Tobacco 3,256
------
HOME BUILDERS -- 0.4%
Belmont Homes* 4,100 72
Cavalier Homes 10,925 185
------
Total Home Builders 257
------
HOTELS & LODGING -- 1.3%
John Q. Hammons Hotels* 9,600 113
Prime Hospitality* 64,500 637
------
Total Hotels & Lodging 750
------
HOUSEHOLD FURNITURE & FIXTURES -- 0.7%
Ameriwood Industries
International* 20,900 105
Winsleow Furniture* 44,180 287
------
Total Household Furniture & Fixtures 392
------
</TABLE>
14
<PAGE>
STATEMENT OF NET ASSETS
- --------------------------------------------------------------------------------
The Conestoga Funds--October 31, 1995
Special Equity Fund -- continued
<TABLE>
<CAPTION>
----------------------------------------------------------
Market
Description Shares Value (000)
----------------------------------------------------------
<S> <C> <C>
INSURANCE -- 3.5%
Allstate 740 $ 27
Gryphon Holdings* 36,700 573
Pac Rim Holding* 87,700 252
Prudential Reinsurance Holdings* 32,700 667
St. Paul Companies 3,840 195
The Travelers Group 6,500 328
Transport Holdings* 33 1
------
Total Insurance 2,043
------
LABORATORY ANALYTICAL INSTRUMENTS -- 0.4%
Molecular Dynamics* 1,400 8
Perseptive Biosystems* 21,000 224
------
Total Laboratory Analytical Instruments 232
------
MACHINERY -- 3.9%
Agco 8,950 401
Caterpillar 11,500 645
Deere 7,500 670
Kuhlman 50,000 575
------
Total Machinery 2,291
------
MEDICAL PRODUCTS & SERVICES -- 6.0%
Acme United* 129,200 388
Aequitron Medical* 9,000 71
Community Psychiatric* 12,400 135
Cooper Companies* 50,000 294
Keravision* 34,500 427
Metra Biosystems* 6,800 126
Pace Health Management Systems* 43,500 201
Possis Medical* 22,600 319
Resound* 47,400 373
Scios Nova* 218,200 789
Sterling House* 18,000 223
United Healthcare 1,366 73
Value Health* 5,400 124
------
Total Medical Products & Services 3,543
------
METALS & MINING -- 0.9%
Potash of Saskatchewan 7,800 543
------
Total Metals & Mining 543
------
OIL AND GAS FIELD EXPLORATION SERVICES -- 1.9%
Enron 10,000 344
Repsol S.A. ADR 25,000 740
------
Total Oil and Gas Field
Exploration Services 1,084
------
PAPER & PAPER PRODUCTS -- 1.1%
International Paper 17,000 629
------
Total Paper & Paper Products 629
------
PETROLEUM & FUEL PRODUCTS -- 0.1%
Kelley Oil & Gas* 15,000 38
------
Total Petroleum & Fuel Products 38
------
<CAPTION>
----------------------------------------------------------
Market
Description Shares Value (000)
----------------------------------------------------------
<S> <C> <C>
PHARMACEUTICALS -- 7.1%
Alpharma 18,700 $ 449
Anesta* 45,200 480
Aphton* 24,300 231
Elan* 17,000 682
Guilford Pharmaceuticals* 22,600 373
ISIP Pharmaceuticals* 27,300 276
NBTY* 26,500 133
Pharmaceutical Resources* 91,300 753
Roberts Pharmaceutical* 12,500 242
Teva Pharmaceutical Industries
ADR 14,000 550
------
Total Pharmaceuticals 4,169
------
RAILROADS -- 1.0%
CSX 7,200 603
------
Total Railroads 603
------
REAL ESTATE -- 0.2%
Agree Realty 9,400 139
------
Total Real Estate 139
------
REPAIR SERVICES -- 0.1%
Earl Scheib* 4,900 29
------
Total Repair Services 29
------
RESTAURANTS -- 4.0%
Darden Restaurants* 81,500 927
Hometown Buffet* 44,800 588
Rally's Hamburgers* 5,815 11
Uno Restaurant* 90,000 686
Vicorp Restaurants* 5,000 55
Vie De France* 21,000 66
------
Total Restaurants 2,333
------
RETAIL -- 6.4%
Bed Bath & Beyond* 3,500 109
Bon-Ton Stores* 51,000 332
Border Group* 54,000 926
Chico's Fas* 8,300 37
CML Group 92,200 530
De Rigo S.P.A. ADR* 200 4
Drug Emporium* 92,100 374
Intimate Brands* 5,400 90
Kroger* 16,000 534
Pacific Sunwear of California* 74,900 543
Sportmart Class A* 14,400 68
Sportmart* 14,400 110
Strouds* 19,000 88
------
Total Retail 3,745
------
RUBBER & PLASTIC -- 1.7%
Goodyear Tire And Rubber 13,000 494
O'Sullivan 45,000 495
------
Total Rubber & Plastic 989
------
</TABLE>
15
<PAGE>
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
----------------------------------------------------------
Shares/Face Market
Description Amount (000) Value (000)
----------------------------------------------------------
<S> <C> <C>
SEMI-CONDUCTORS -- 3.8%
ESS Technology* 9,100 $ 273
Intel 7,400 517
Lam Research* 7,500 457
Micron Technology 7,800 550
National Semiconductor* 17,300 422
------
Total Semi-Conductors 2,219
------
SERVICES-EMPLOYMENT AGENCIES -- 0.9%
Manpower 20,000 543
------
Total Services-Employment Agencies 543
------
SPORTING AND ATHLETIC GOODS -- 1.2%
Callaway Golf 36,500 597
Meridian Sports* 17,300 104
------
Total Sporting and Athletic Goods 701
------
STEEL & STEEL WORKS -- 2.5%
Ak Steel Holding 22,000 682
Cold Metal Products* 42,800 246
USX 17,500 523
------
Total Steel & Steel Works 1,451
------
TELEPHONES & TELECOMMUNICATION -- 2.3%
Cellular Communications -- Class
A* 5,439 292
Executone Information Systems* 55,900 143
Intermedia Communications of
Florida* 40,500 511
Nextel Communications* 15,000 208
Peoples Telephone* 14,300 37
Telefonica De Espana ADR 4,000 151
------
Total Telephones & Telecommunication 1,342
------
TRUCKING -- 1.6%
Expeditors International of
Washington 25,000 656
PST Vans* 45,900 258
------
Total Trucking 914
------
VIDEO TECHNOLOGY -- 1.3%
Videonics* 55,000 770
------
Total Video Technology 770
------
WHOLESALE -- 0.3%
Government Technology Services* 33,500 188
------
Total Wholesale 188
------
Total Common Stock
(Cost $55,333,061) 55,877
------
COMMERCIAL PAPER -- 4.4%
American Express
5.750%, 11/01/95 $ 2,540 2,540
------
Total Commercial Paper
(Cost $2,540,000) 2,540
------
Total Investments -- 100.5%
(Cost $57,873,061) 58,417
------
OTHER ASSETS AND LIABILITIES -- (0.5%)
Other Assets and Liabilities,
Net (287)
------
Total Other Assets and Liabilities (287)
------
<CAPTION>
----------------------------------------------------------
Market
Description Shares Value (000)
----------------------------------------------------------
<S> <C> <C>
NET ASSETS:
Portfolio shares of the
Institutional Class (unlimited
authorization -- $0.001 par
value) based on 5,027,349
outstanding shares of
beneficial interest $ 48,443
Portfolio shares of the Retail
Class (unlimited
authorization -- $0.001 par
value) based on 64,279
outstanding shares of
beneficial interest 643
Undistributed net investment
income 16
Undistributed net realized gain
on investments 8,483
Unrealized appreciation on
investments 545
------
Total Net Assets: -- 100.0% $ 58,130
======
Net Asset Value, Offering Price
and Redemption Price Per
Share -- Institutional Class $ 11.42
======
Net Asset Value and Redemption
Price Per Share -- Retail Class $ 11.42
======
Maximum Offering Price Per
Share -- Retail Class
($11.42 / 98.0%) $ 11.65
======
* Non-income producing security
ADR American Depository Receipt
INTERNATIONAL EQUITY FUND
FOREIGN COMMON STOCKS 90.2%
ARGENTINA 1.4%
Banco Frances Rio Plata ADR 2,200 $ 49
Cementera Argentina* 6,500 28
Commercial del Plata* 19,000 38
Irsa GDR* 1,400 29
Quilmes Industrial 2,200 39
------
Total Argentina 183
------
AUSTRALIA 0.8%
Newscorp 21,000 106
------
Total Australia 106
------
CHILE 0.2%
Santa Isabel ADR* 1,100 25
------
Total Chile 25
------
FINLAND 3.6%
Nokia, Cl A 8,400 481
------
Total Finland 481
------
</TABLE>
16
<PAGE>
STATEMENT OF NET ASSETS
- --------------------------------------------------------------------------------
The Conestoga Funds--October 31, 1995
International Equity Fund -- continued
<TABLE>
<CAPTION>
----------------------------------------------------------
Market
Description Shares Value (000)
----------------------------------------------------------
<S> <C> <C>
FRANCE 1.7%
Axa 800 $ 44
Business Objects ADR* 1,300 56
Castorama 165 27
Cie Bancaire 350 36
SGS-Thomson ADR* 1,500 68
------
Total France 231
------
GERMANY 0.7%
Veba 2,250 92
------
Total Germany 92
------
HONG KONG 5.9%
Cheung Kong Holdings 11,000 62
Citic Pacific 20,800 65
First Pacific 266,000 306
HSBC Holdings 15,200 221
Hutchison Whampoa 12,000 66
Sun Hung Kai Properties 8,000 64
------
Total Hong Kong 784
------
INDIA 0.6%
East India Hotels GDR* 1,400 24
I.T.C. ADR* 4,100 36
Ranbaxy Laboratories GDR 1,000 22
------
Total India 82
------
INDONESIA 1.0%
Indonesian Satellite ADR 4,000 133
------
Total Indonesia 133
------
IRELAND 0.4%
Elan ADR* 1,300 52
------
Total Ireland 52
------
ISRAEL 0.3%
ECI Telecommunications 1,800 34
------
Total Israel 34
------
ITALY 2.7%
Assicurazioni Generali 2,200 51
Falck* 12,200 28
Fila Holdings ADR 900 39
Gucci Group ADR* 3,100 93
Mediobanca 4,000 27
Telecom Italia 71,500 120
------
Total Italy 358
------
JAPAN 27.7%
Advantest 4,000 227
Alpine Electronics 4,000 56
Best Denski 2,000 29
Bridgestone 3,000 42
Canon 6,000 103
Canon Sales 1,000 24
Daini Denden 32 259
Daiwa Securities 7,000 82
Fanuc 2,000 87
<CAPTION>
----------------------------------------------------------
Market
Description Shares Value (000)
----------------------------------------------------------
<S> <C> <C>
Hirose Electric 1,050 $ 67
Ito Yokado 3,000 164
Keyence 500 62
Koa 5,000 81
Kokusai Electric 5,000 114
Komatsu 6,000 47
Kubota 6,000 37
Kurita Water Industries 1,000 28
Kyocera 4,000 328
Makita 2,000 31
Marui 2,000 35
Matsushita Electric 3,000 43
Mitsubishi Electric 5,000 37
Mitsubishi Estate 7,000 75
Mitsubishi Trust & Banking 2,000 28
Mitsui Fudosan 5,000 57
Murata 4,000 140
NEC 20,000 264
Nikon 10,000 143
Nippon Telegraph & Telephone 4 33
Nissan Motors 7,000 47
Nomura Securities 6,000 110
NTT Data Communications 3 75
Sankyo 1,000 22
Sanwa Bank 3,000 51
Sharp 7,000 97
Sony 1,000 45
Sumitomo Bank 3,000 53
Sumitomo Trust & Banking 4,000 46
Takeda Chemical Industries 2,000 28
TDK 1,000 52
Tokyo Electronics 4,000 174
Toray 6,000 37
Toyota Motor 4,000 74
Ushio 2,000 23
Yamanouchi Pharmaceutical 3,000 67
------
Total Japan 3,724
------
LUXEMBOURG 0.1%
Millicom International* 500 17
------
Total Luxembourg 17
------
MALAYSIA 3.8%
Arab-Malaysian Merchant Bank 12,000 148
Malayan Banking 10,000 81
New Straits Times Press 20,000 63
Sime Darby Malaysia 20,000 50
Technology Resources* 44,000 112
United Engineers 9,000 56
------
Total Malaysia 510
------
</TABLE>
17
<PAGE>
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
----------------------------------------------------------
Market
Description Shares Value (000)
----------------------------------------------------------
<S> <C> <C>
MEXICO 2.0%
Bufete Industrial ADR* 1,600 $ 21
Cemex, Cl A 5,300 16
Cifra* 35,000 37
Grupo Carso ADR* 2,500 24
Grupo Financiero Banamex, Cl B 11,000 19
Grupo Financiero Banamex, Cl L 550 1
Grupo Financiero Inbursa, Cl C 20,000 55
Grupo Iusacell ADS* 1,400 17
Grupo Modelo, Cl C 5,000 19
Grupo Posadas, Cl A* 52,300 17
Grupo Synkro ADR, Cl B* 80,000 20
Kimberly Clark, Cl A 1,700 22
------
Total Mexico 268
------
NETHERLANDS 4.7%
Advanced Semi-Conductor ADR* 700 33
ASM Litho Holdings ADR* 2,000 97
Baan ADR* 2,300 98
Elsevier 4,500 58
Getronics 1,000 48
International Nederlanden 500 30
Madge Networks ADR* 1,900 80
Philips Electronics 1,800 70
Polygram 1,100 69
Wolters Kluwer 500 46
------
Total Netherlands 629
------
NEW ZEALAND 0.5%
Telecom New Zealand ADR 1,015 67
------
Total New Zealand 67
------
NORWAY 1.2%
Hafslund Nycomed, Cl B 1,200 34
Petroleum Geo-Services ADR* 6,200 120
------
Total Norway 154
------
PERU 0.3%
Banco Wiese ADR 6,900 46
------
Total Peru 46
------
PHILIPPINES 0.5%
San Miguel, Cl B 20,000 66
------
Total Philippines 66
------
SINGAPORE 1.9%
City Development 7,000 43
Creative Technology ADR* 1,100 13
Flextronics ADR* 1,000 23
Singapore Press, F 2,400 38
Straits Steamship Land 14,000 39
United Overseas Bank, F 10,600 93
------
Total Singapore 249
------
SOUTH KOREA 3.1%
Korea Fund 3,000 65
Korea Mobile Telecom GDR* 2,500 93
Samsung Electric Non-Voting
GDS New* 4,000 256
Samsung Electric Voting GDR* 22 2
------
Total South Korea 416
------
<CAPTION>
----------------------------------------------------------
Market
Description Shares Value (000)
----------------------------------------------------------
<S> <C> <C>
SWEDEN 7.4%
Allgan, Cl B 1,600 $ 24
Asea, Cl B 1,400 138
Astra, Cl B 5,200 188
Autoliv 2,200 126
Ericsson Telephone ADR 23,400 500
Pharmacia, Cl B 500 17
------
Total Sweden 993
------
SWITZERLAND 4.9%
Brown Boveri & Cie Bearer 65 75
Ciba Geigy 125 108
Roche Holdings 35 255
Sandoz Pharmaceutical 260 215
------
Total Switzerland 653
------
THAILAND 2.3%
Advanced Info Service, F 9,000 148
Land and House, F 2,000 32
Total Access Communications ADR 11,000 67
United Communications 5,000 63
------
Total Thailand 310
------
UNITED KINGDOM 10.5%
Barclays Bank 5,200 61
BAT 4,200 34
British Sky Broadcasting ADR 5,500 197
Commercial Union 5,300 51
Glaxo Wellcome 7,200 97
Logica 6,100 46
Next 12,000 78
Reuters 16,200 151
Smithkline Beecham 20,500 210
Takare 6,000 19
Tele-Communications ADR, Cl A* 7,500 170
Vodafone Group 26,200 108
WPP Group 11,600 28
Zeneca Group 8,000 149
------
Total United Kingdom 1,399
------
Total Foreign Common Stocks
(Cost $11,387,561) 12,062
------
FOREIGN PREFERRED STOCKS 1.4%
GERMANY 1.4%
SAP 1,250 191
------
Total Germany 191
------
Total Foreign Preferred Stocks
(Cost $158,684) 191
------
</TABLE>
18
<PAGE>
STATEMENT OF NET ASSETS
- --------------------------------------------------------------------------------
The Conestoga Funds--October 31, 1995
International Equity Fund -- continued
<TABLE>
<CAPTION>
----------------------------------------------------------
Face Market
Description Amount (000) Value (000)
----------------------------------------------------------
<S> <C> <C>
TIME DEPOSIT 7.7%
Bank of New York -- Cayman
Time Deposit
5.563%, 11/01/95 $ 1,029 $ 1,029
------
Total Time Deposit
(Cost $1,028,558) 1,029
------
Total Investments (99.3% of Net Assets)
(Cost $12,574,803) 13,282
------
OTHER ASSETS AND LIABILITIES 0.7%
Other Assets and Liabilities, Net 99
------
Total Other Assets and Liabilities 99
------
NET ASSETS:
Portfolio shares of
Institutional
Class (unlimited
authorization -- $0.001 par
value) -- based on
1,214,982 outstanding shares 12,425
Portfolio shares of Retail
Class (unlimited
authorization -- $0.001 par
value) -- based on
758 outstanding shares 8
Accumulated net investment loss (5)
Undistributed net realized gain
on investments and foreign
currency transactions 201
Unrealized appreciation on
forward foreign currency
contracts, foreign currency
and translation of other
assets and liabilities in
foreign currency 45
Unrealized appreciation on
investments 707
------
Total Net Assets: -- 100.0% $ 13,381
======
Net Asset Value, Offering Price
and
Redemption Price Per Share --
Institutional Class $ 11.01
======
Net Asset Value and Redemption
Price Per Share -- Retail Class $ 10.99
======
Maximum Offering Price Per
Share -- Retail Class
($10.99 / 98%) $ 11.21
======
* Non-income producing security
ADR American Depository Receipts
ADS American Depository Shares
GDR Global Depository Receipts
GDS Global Depository Shares
Cl Class
F Foreign Registry Shares
BALANCED FUND
COMMON STOCK -- 38.5%
AEROSPACE & DEFENSE -- 0.2%
McDonnell Douglas 900 $ 74
------
Total Aerospace & Defense 74
------
<CAPTION>
----------------------------------------------------------
Market
Description Shares Value (000)
----------------------------------------------------------
<S> <C> <C>
AIRCRAFT -- 1.1%
Allied Signal 3,800 $ 162
Boeing 1,500 98
Textron 1,000 69
United Technologies 900 80
------
Total Aircraft 409
------
APPAREL/TEXTILES -- 0.2%
Burlington Industries* 1,900 21
Fruit Of The Loom* 3,000 52
------
Total Apparel/Textiles 73
------
AUTOMOTIVE -- 0.7%
Ford Motor 7,700 222
Magna International, Class A 1,000 43
------
Total Automotive 265
------
BANKS -- 3.9%
Bank of Boston 2,600 116
BankAmerica 8,300 477
Chase Manhattan 7,800 445
Chemical Banking 4,400 250
Citicorp 3,500 227
------
Total Banks 1,515
------
BOOKS -- 0.0%
Borders Group* 1,000 17
------
Total Books 17
------
BUILDING & CONSTRUCTION -- 0.3%
Webb (Del E.) 5,400 112
------
Total Building & Construction 112
------
CHEMICALS -- 1.5%
Dow Chemical 900 62
Hercules 1,900 101
IMC Global 1,700 119
Monsanto 1,200 126
Praxair 6,500 175
------
Total Chemicals 583
------
COMMUNICATIONS EQUIPMENT -- 0.5%
First Alert* 1,200 19
Motorola 1,300 85
Qualcomm* 2,500 96
------
Total Communications Equipment 200
------
COMPUTER SOFTWARE -- 0.5%
Computer Associates
International 2,400 131
International Game Technology 5,400 63
Pyxis* 1,000 13
------
Total Computer Software 207
------
</TABLE>
19
<PAGE>
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
----------------------------------------------------------
Market
Description Shares Value (000)
----------------------------------------------------------
<S> <C> <C>
COMPUTERS & SERVICES -- 2.4%
Apple Computer 3,600 $ 131
Compaq Computer* 2,000 112
Digital Equipment* 3,500 189
Hewlett Packard 800 74
IBM 4,000 389
Novell* 2,252 37
------
Total Computers & Services 932
------
CONCRETE & MINERAL PRODUCTS -- 0.1%
Owens Corning Fiberglass* 1,200 51
------
Total Concrete & Mineral Products 51
------
CONTAINERS & PACKAGING -- 0.2%
Owens-Illinois* 5,300 67
------
Total Containers & Packaging 67
------
ELECTRICAL SERVICES -- 2.5%
American Electric Power 1,800 69
Central And South West 4,100 110
Consolidated Edison New York 5,400 164
Pacific Gas And Electric 4,200 123
Peco Energy 8,500 248
SCE 14,300 243
------
Total Electrical Services 957
------
ELECTRONIC AND OTHER ELECTRICAL EQUIPMENT -- 1.8%
General Electric 7,200 456
Philips Electronics ADR 2,700 104
Texas Instruments 1,800 123
------
Total Electronic and Other
Electrical Equipment 683
------
ENTERTAINMENT -- 0.1%
MGM Grand* 1,800 43
------
Total Entertainment 43
------
ENVIRONMENTAL SERVICES -- 0.3%
Browning Ferris Industries 4,500 131
------
Total Environmental Services 131
------
FINANCIAL SERVICES -- 1.6%
Dean Witter Discover 3,700 183
Fleet Financial Group 2,000 78
Household International 1,400 79
ITT 1,500 184
MBNA 2,500 92
------
Total Financial Services 616
------
FOOD, BEVERAGE & TOBACCO -- 3.1%
IBP 1,900 114
Nabisco Holdings -- Class A 8,000 215
Philip Morris Companies 6,700 566
RJR Nabisco Holdings 10,300 317
------
Total Food, Beverage & Tobacco 1,212
------
HOUSEHOLD PRODUCTS -- 0.1%
Maytag 2,700 51
------
Total Household Products 51
------
<CAPTION>
----------------------------------------------------------
Market
Description Shares Value (000)
----------------------------------------------------------
<S> <C>
INSURANCE -- 1.6%
Aetna Life And Casualty 1,200 $ 84
Allstate 462 17
Cigna 1,200 119
Equitable Companies 7,300 155
The Travelers Group 5,000 253
Transport Holdings -- Class A* 25 1
------
Total Insurance 629
------
MACHINERY -- 1.1%
Baker Hughes 3,000 59
Case Equipment 2,500 95
Caterpillar 1,200 67
Deere 1,800 161
McDermott International 1,300 21
------
Total Machinery 403
------
MEDICAL PRODUCTS & SERVICES -- 0.8%
Beverly Enterprises* 5,100 60
Community Psychiatric* 1,500 16
FHP International* 1,500 36
Foundation Health* 1,600 68
Health Systems International
Class A* 700 21
Humana* 1,500 32
Novacare* 2,300 14
United Healthcare 500 27
United States Surgical 1,700 42
------
Total Medical Products & Services 316
------
METALS & MINING -- 0.3%
Potash of Saskatchewan 1,700 118
------
Total Metals & Mining 118
------
OIL AND GAS FIELD EXPLORATION SERVICES -- 4.0%
Ashland 3,500 111
British Petroleum PLC ADR 4,000 353
Diamond Shamrock 1,400 36
Enron 3,500 120
Mobil 3,200 322
Repsol S.A. ADR 7,100 210
Royal Dutch Petroleum 2,200 270
Tosco 2,300 79
YPF Sociedad Anonima ADR 2,700 46
------
Total Oil and Gas Field Exploration Services 1,547
------
PAPER & PAPER PRODUCTS -- 0.2%
International Paper 1,800 67
------
Total Paper & Paper Products 67
------
PHARMACEUTICALS -- 1.0%
Caremark International 900 19
Elan Public* 3,900 156
Merck 1,600 92
Mylan Laboratories 2,500 48
Teva Pharmaceutical Industries
ADR 1,400 55
------
Total Pharmaceuticals 370
------
</TABLE>
20
<PAGE>
STATEMENT OF NET ASSETS
- --------------------------------------------------------------------------------
The Conestoga Funds--October 31, 1995
Balanced Fund -- continued
<TABLE>
<CAPTION>
----------------------------------------------------------
Market
Description Shares Value (000)
----------------------------------------------------------
<S> <C> <C>
PHOTOGRAPHIC EQUIPMENT & SUPPLIES -- 0.2%
Xerox 500 $ 65
------
Total Photographic Equipment & Supplies 65
------
RAILROADS -- 0.5%
Burlington Northern Santa Fe 1,100 92
CSX 1,200 101
------
Total Railroads 193
------
RESTAURANTS -- 0.6%
Darden Restaurants* 17,300 197
Vicorp Restaurants* 2,200 24
------
Total Restaurants 221
------
RETAIL -- 1.5%
CML Group 9,000 52
Kroger* 7,200 239
Lowe's 6,500 176
Pep Boys 3,500 77
Vons* 1,500 38
------
Total Retail 582
------
RUBBER & PLASTIC -- 1.0%
Goodyear Tire And Rubber 9,700 369
------
Total Rubber & Plastic 369
------
SEMI-CONDUCTORS/INSTRUMENTS -- 1.0%
Intel 3,100 216
Micron Technology 900 64
National Semiconductor* 3,200 78
VLSI Technology 1,500 35
------
Total Semi-Conductors/Instruments 393
------
SERVICES-EMPLOYMENT AGENCIES -- 0.3%
Manpower 4,000 109
------
Total Services-Employment Agencies 109
------
SPECIALTY MACHINERY -- 0.3%
Westinghouse Electric 7,500 106
------
Total Specialty Machinery 106
------
STEEL & STEEL WORKS -- 0.6%
Birmingham Steel 300 5
Phelps Dodge 1,900 120
USX -- U.S. Steel Group 3,900 117
------
Total Steel & Steel Works 242
------
TELEPHONES & TELECOMMUNICATION -- 2.3%
Cellular Communications -- Class
A* 2,000 107
MCI Communications 6,500 162
SBC Communications 3,000 168
Worldcom* 14,300 467
------
Total Telephones & Telecommunication 904
------
WHOLESALE -- 0.1%
Universal -- Va 900 19
------
Total Wholesale 19
------
Total Common Stock
(Cost $14,129,471) 14,851
------
PREFERRED STOCKS -- 0.1%
PRINTING & PUBLISHING -- 0.1%
News -- Preferred Shares ADR 3,200 58
------
Total Printing & Publishing 58
------
Total Preferred Stocks
(Cost $64,400) 58
------
<CAPTION>
----------------------------------------------------------
Shares/Face Market
Description Amount (000) Value (000)
----------------------------------------------------------
<S> <C> <C>
U.S. TREASURY OBLIGATIONS -- 34.8%
U.S. Treasury Bonds
8.750%, 05/15/17 $ 1,040 $ 1,320
7.625%, 02/15/25 80 93
U.S. Treasury Notes
7.375%, 05/15/96 700 707
7.500%, 01/31/97 950 971
6.500%, 05/15/97 645 653
8.500%, 05/15/97 85 89
7.375%, 11/15/97 1,645 1,699
8.125%, 02/15/98 355 373
9.000%, 05/15/98 815 878
9.250%, 08/15/98 430 469
8.875%, 11/15/98 1,105 1,201
6.750%, 05/31/99 1,215 1,253
7.125%, 09/30/99 600 627
7.500%, 10/31/99 970 1,028
7.500%, 11/15/01 1,275 1,379
9.250%, 02/15/16 510 673
------
Total U.S. Treasury Obligations
(Cost $13,321,228) 13,413
------
CORPORATE OBLIGATIONS -- 5.2%
Ahmanson H. F
7.875%, 09/01/04 185 197
Bear Stearns
6.875%, 10/01/05 175 175
Capital One Bank
8.125%, 02/27/98 90 94
Chase Manhattan Bank
6.500%, 08/01/05 100 98
Chemical Bank
6.125%, 11/01/08 230 214
First Nationwide
10.000%, 10/01/06 50 59
Lehman Brothers Holdings
7.125%, 09/15/03 175 176
Manufacturers & Traders
7.000%, 07/01/05 165 165
Niagara Mohawk Power
Callable @100 04/01/02
8.750%, 04/01/22 80 76
Provident Bank
6.375%, 01/15/04 160 156
TCI Communications
8.750%, 08/01/15 90 96
Tele-Communications
8.250%, 01/15/03 100 105
United Air Lines
10.670%, 05/01/04 320 375
------
Total Corporate Obligations
(Cost $1,968,434) 1,986
------
</TABLE>
21
<PAGE>
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
----------------------------------------------------------
Face Market
Description Amount (000) Value (000)
----------------------------------------------------------
<S> <C> <C>
U.S. GOVERNMENT AGENCY OBLIGATIONS -- 6.2%
FHLMC CMO Pool #E00388
7.000%, 08/01/10 $ 139 $ 140
FHLMC Pool #D63546
7.000%, 09/01/25 350 347
FNMA Pool #190203
8.000%, 02/01/23 176 180
FNMA Pool #290383
7.500%, 05/01/25 159 161
FNMA Pool #303460
6.500%, 07/01/10 288 286
FNMA Pool #317278
7.500%, 07/01/25 175 176
GNMA Pool #356688
7.000%, 07/15/23 386 384
GNMA Pool #780190
7.500%, 07/15/25 715 728
------
Total U.S. Government Agency Obligations
(Cost $2,393,321) 2,402
------
YANKEE BONDS -- 3.3%
AAB-Global
7.250%, 05/31/05 250 260
Carter Holt Harvey
8.375%, 04/15/15 85 94
CSR Finance
7.700%, 07/21/25 200 208
Laidlaw
8.750%, 04/15/25 75 86
Noranda
8.000%, 06/01/03 100 107
Quebec Province
7.500%, 07/15/23 280 281
Santander Finance
7.875%, 04/15/05 100 107
Toronto-Domnion Bank -- New York
6.150%, 10/15/08 140 131
------
Total Yankee Bonds
(Cost $1,251,897) 1,274
------
COMMERCIAL PAPER -- 10.5%
American Express
5.750%, 11/01/95 4,030 4,030
------
Total Commercial Paper
(Cost $4,030,000) 4,030
------
MORTGAGE RELATED -- 0.9%
Premier Auto Trust Series 1995-1
Class A4
7.850%, 09/04/98 110 113
Prudential Home Mortgage
Securities Pool #1994-29 Class
A5
7.000%, 10/25/24 235 230
------
Total Mortgage Related
(Cost $339,218) 343
------
Total Investments -- 99.5%
(Cost $37,497,969) 38,357
------
OTHER ASSETS AND LIABILITIES -- 0.5%
Other Assets and Liabilities, Net 206
------
Total Other Assets and Liabilities 206
------
<CAPTION>
----------------------------------------------------------
Face Market
Description Amount (000) Value (000)
----------------------------------------------------------
<S> <C> <C>
NET ASSETS:
Portfolio shares of the
Institutional Class (unlimited
authorization -- $0.001 par
value) based on 3,707,254
outstanding shares of
beneficial interest $ 37,304
Portfolio shares of the Retail
Class (unlimited
authorization --
$0.001 par value) based on
6,676 outstanding shares of
beneficial interest 68
Undistributed net investment
income 47
Undistributed net realized gain
on investments 285
Unrealized appreciation on
investments 859
------
Total Net Assets: -- 100.0% $ 38,563
======
Net Asset Value, Offering Price
and Redemption Price Per
Share -- Institutional Class $ 10.38
======
Net Asset Value and Redemption
Price Per Share -- Retail Class $ 10.39
======
Maximum Offering Price Per
Share -- Retail Class
($10.39 / 98.0%) $ 10.60
======
</TABLE>
* Non-income producing security
ADR American Depository Receipt
CMO Collateralized Mortgage Obligation
FHLMC Federal Home Loan Mortgage Corporation
FNMA Federal National Mortgage Association
GNMA Government National Mortgage Association
<TABLE>
<CAPTION>
BOND FUND
U.S. TREASURY OBLIGATIONS -- 35.8%
<S> <C> <C>
U.S. Treasury Bonds
10.750%, 05/15/03 $ 200 $ 257
8.750%, 05/15/17 8,745 11,099
8.125%, 08/15/19 195 235
8.500%, 02/15/20 2,600 3,251
7.500%, 11/15/24 500 571
7.625%, 02/15/25 2,450 2,843
U.S. Treasury Notes
7.500%, 01/31/97 1,065 1,089
6.500%, 05/15/97 1,155 1,170
8.500%, 05/15/97 1,225 1,276
8.500%, 07/15/97 2,075 2,170
9.000%, 05/15/98 6,345 6,836
9.250%, 08/15/98 12,140 13,231
8.875%, 02/15/99 4,568 4,991
6.750%, 05/31/99 6,050 6,239
7.125%, 09/30/99 6,335 6,625
</TABLE>
22
<PAGE>
STATEMENT OF NET ASSETS
- --------------------------------------------------------------------------------
The Conestoga Funds--October 31, 1995
Bond Fund -- continued
<TABLE>
<CAPTION>
----------------------------------------------------------
Face Market
Description Amount (000) Value (000)
----------------------------------------------------------
<S> <C> <C>
U.S. TREASURY OBLIGATIONS -- CONTINUED
7.500%, 10/31/99 $ 3,955 $ 4,192
7.750%, 01/31/00 3,780 4,051
------
Total U.S. Treasury Obligations
(Cost $69,349,806) 70,126
------
U.S. GOVERNMENT AGENCY OBLIGATIONS -- 30.9%
FHLMC Pool #D63546
7.000%, 09/01/25 3,542 3,517
FHLMC Pool #E00388
7.000%, 08/01/10 1,386 1,398
FHLMC Pool #E20013
7.500%, 01/01/08 3,674 3,748
FHLMC Pool #E20185
7.000%, 07/01/10 1,559 1,572
FHLMC Series 1254 Class F
7.250%, 04/15/18 2,020 2,025
FHLMC Series 1411 Class E
6.000%, 02/15/16 2,580 2,562
FHLMC Series 1519 Class F
6.750%, 03/15/07 1,925 1,953
FHLMC Series 1528 Class C
6.500%, 05/15/05 1,920 1,848
FHLMC Series 1606 Class KA
6.250%, 11/15/08 1,971 1,970
FHLMC Series 30 Class D
9.500%, 02/15/20 2,000 2,186
FNMA Pool #190203
8.000%, 02/01/23 1,836 1,883
FNMA Pool #290383
7.500%, 05/01/25 1,651 1,669
FNMA Pool #303460
6.500%, 07/01/10 3,340 3,313
FNMA Pool #317278
7.500%, 07/01/25 1,840 1,860
FNMA Pool #50726
7.000%, 05/01/23 3,534 3,505
FNMA Series 1992-124 Class PG
7.000%, 01/25/18 1,930 1,942
FNMA Series 1992-196 Class E
5.750%, 02/25/03 1,680 1,655
FNMA Series 1992-210 Class H
6.500%, 03/25/19 1,660 1,641
FNMA Series 1992-65 Class H
8.500%, 01/25/20 1,836 1,914
FNMA Series 1993-194 Class B
5.500%, 10/25/98 1,585 1,543
FNMA Series 1993-2 Class PD
6.750%, 01/25/16 1,600 1,603
FNMA Series G92-24 Class E
6.500%, 11/25/20 1,397 1,392
GNMA Pool #286395
9.000%, 04/15/20 2,611 2,744
GNMA Pool #356688
7.000%, 07/15/23 3,825 3,802
GNMA Pool #780190
7.500%, 07/15/25 7,153 7,280
------
Total U.S. Government Agency Obligations
(Cost $59,949,162) 60,525
------
<CAPTION>
----------------------------------------------------------
Face Market
Description Amount (000) Value (000)
----------------------------------------------------------
<S> <C> <C>
CORPORATE OBLIGATIONS -- 15.4%
Ahmanson H. F.
7.875%, 09/01/04 $ 2,500 $ 2,656
Bear Stearns
6.875%, 10/01/05 1,640 1,638
Capital One Bank
8.125%, 02/27/98 910 948
Chase Manhattan Bank
6.500%, 08/01/05 1,005 980
Chemical Bank
6.125%, 11/01/08 2,140 1,988
First Nationwide
10.000%, 10/01/06 485 572
Georgia Pacific
7.700%, 06/15/15 975 997
8.250%, 03/01/23 770 805
Great Lakes Power
8.900%, 12/01/99 750 798
Laidlaw
8.750%, 04/15/25 1,485 1,710
Lehman Brothers
9.875%, 10/15/00 1,050 1,188
Lehman Brothers Holdings
7.125%, 09/15/03 1,725 1,736
Manufacturers & Traders
7.000%, 07/01/05 1,605 1,605
Niagara Mohawk Power
Callable 04/01/02 @ 104
8.750%, 04/01/22 940 888
Provident Bank
6.375%, 01/15/04 1,855 1,813
Southern Cal Gas
7.500%, 06/15/23 665 687
System Energy Resources
10.500%, 09/01/96 1,020 1,057
TCI Communications
8.750%, 08/01/15 905 965
Tele-Communications
Callable 01/15/03
9.250%, 01/15/23 1,885 2,019
Texas Utilities
Callable 04/01/03 @ 103.85
7.875%, 04/01/24 720 751
United Air Lines
10.670%, 05/01/04 2,910 3,427
Virginia Electric & Power
Callable 03/01/05 @ 103.48
8.250%, 03/01/25 840 919
------
Total Corporate Obligations
(Cost $29,483,836) 30,147
------
MORTGAGE RELATED -- 3.3%
GE Capital Mortgage Services
Series 1994-2 Class A4
6.000%, 01/25/09 2,680 2,605
Prudential Home Mortgage
Securities Series 1994-29
Class A5
7.000%, 10/25/24 2,475 2,419
</TABLE>
23
<PAGE>
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
----------------------------------------------------------
Face Market
Description Amount (000) Value (000)
----------------------------------------------------------
<S> <C> <C>
MORTGAGE RELATED -- CONTINUED
Residential Funding Mtg Sec 1
Series 1993-S7 Class A6
7.150%, 02/25/08 $ 1,500 $ 1,499
------
Total Mortgage Related
(Cost $6,450,512) 6,523
------
ASSET BACKED SECURITIES -- 2.5%
Banc One Credit Card Master
Trust Series 1994-A Class A
7.150%, 12/15/98 1,970 2,003
Premier Auto Trust Series 1995-1
Class A4
7.850%, 09/04/98 1,080 1,111
Standard Credit Card Master
Trust Series 1991-4 Class B
8.250%, 10/07/97 1,675 1,710
------
Total Asset Backed Securities
(Cost $4,788,625) 4,824
------
YANKEE BOND -- 7.0%
AAB-Global
7.250%, 05/31/05 2,070 2,150
Carter Holt Harvey
8.375%, 04/15/15 865 961
CSR Finance
7.700%, 07/21/25 1,815 1,885
Korea Electric Power
7.750%, 04/01/13 805 830
Noranda
8.000%, 06/01/03 1,330 1,423
Quebec Province
7.500%, 07/15/23 2,895 2,903
Santander Finance
7.875%, 04/15/05 2,265 2,418
Toronto-Domnion Bank-New York
6.150%, 10/15/08 1,160 1,088
------
Total Yankee Bond
(Cost $13,291,504) 13,658
------
MEDIUM TERM NOTE -- 1.2%
Paine Webber
6.730%, 01/20/04 1,300 1,267
Salomon
6.280%, 02/05/97 1,160 1,156
------
Total Medium Term Note
(Cost $2,339,420) 2,423
------
COMMERCIAL PAPER -- 2.4%
American Express
5.750%, 11/01/95 4,607 4,607
------
Total Commercial Paper
(Cost $4,607,000) 4,607
------
Total Investments -- 98.5%
(Cost $190,259,865) 192,833
------
OTHER ASSETS AND LIABILITIES -- 1.5%
Other Assets and Liabilities, Net 2,982
------
Total Other Assets and Liabilities 2,982
------
<CAPTION>
----------------------------------------------------------
Face Market
Description Amount (000) Value (000)
----------------------------------------------------------
<S> <C> <C>
NET ASSETS:
Portfolio shares of the
Institutional Class (unlimited
authorization -- $0.001 par
value) based on 18,422,250
outstanding shares of
beneficial interest $ 189,788
Portfolio shares of the Retail
Class (unlimited
authorization --
$0.001 par value) based on
130,046 outstanding shares of
beneficial interest 1,372
Undistributed net investment
income 384
Undistributed net realized gain
on investments 1,698
Unrealized appreciation on
investments 2,573
------
Total Net Assets: -- 100.0% $ 195,815
======
Net Asset Value, Offering Price
and
Redemption Price Per Share --
Institutional Class $ 10.55
======
Net Asset Value and Redemption
Price Per Share -- Retail Class $ 10.56
======
Maximum Offering Price Per
Share -- Retail Class
($10.56 / 98.0%) $ 10.78
======
</TABLE>
CMO Collateralized Mortgage Obligation
FNMA Federal National Mortgage Association
FHLMC Federal Home Loan Mortgage Corporation
GNMA Government National Mortgage Association
<TABLE>
<CAPTION>
INTERMEDIATE INCOME FUND
U.S. TREASURY OBLIGATIONS -- 61.1%
<S> <C> <C>
U.S. Treasury Notes
7.500%, 01/31/97 $ 4,110 $ 4,202
6.500%, 05/15/97 7,010 7,098
8.500%, 05/15/97 700 729
8.500%, 07/15/97 8,670 9,068
6.500%, 08/15/97 6,890 6,990
7.375%, 11/15/97 2,420 2,499
8.125%, 02/15/98 145 153
9.000%, 05/15/98 4,050 4,364
9.250%, 08/15/98 10,580 11,531
6.750%, 05/31/99 2,215 2,284
7.125%, 09/30/99 7,015 7,336
7.500%, 10/31/99 6,270 6,646
7.750%, 11/30/99 230 246
7.750%, 01/31/00 3,315 3,553
7.500%, 11/15/01 14,690 15,883
7.500%, 02/15/05 2,360 2,602
------
Total U.S. Treasury Obligations
(Cost $84,374,220) 85,184
------
</TABLE>
24
<PAGE>
STATEMENT OF NET ASSETS
- --------------------------------------------------------------------------------
The Conestoga Funds--October 31, 1995
Intermediate Income Fund -- continued
<TABLE>
<CAPTION>
----------------------------------------------------------
Face Market
Description Amount (000) Value (000)
----------------------------------------------------------
<S> <C> <C>
CORPORATE OBLIGATIONS -- 13.3%
Bear Stearns
6.875%, 10/01/05 $ 710 $ 709
Capital One Bank
8.125%, 02/27/98 800 833
Chase Manhattan Bank
6.500%, 08/01/05 695 678
Chrysler, Callable @ 100 08/01/97
10.400%, 08/01/99 1,095 1,162
Colonial National Bank
7.000%, 08/01/03 1,595 1,609
First National Bank of Boston
8.000%, 09/15/04 2,000 2,150
Great Lakes Power
8.900%, 12/01/99 990 1,053
KN Energy
9.940%, 02/01/96 300 303
Lehman Bothers
9.875%, 10/15/00 2,000 2,263
Pennsylvania Power And Light
7.750%, 05/01/02 1,280 1,358
Philip Morris, Callable @ 100
06/11/92
6.500%, 12/12/95 250 250
Provident Bank
5.000%, 06/15/96 225 224
System Energy Resources
10.500%, 09/01/96 725 751
Tele-Communications
8.250%, 01/15/03 1,600 1,672
Transcont Gas
8.125%, 01/15/97 1,055 1,076
United Airlines
6.750%, 12/01/97 2,435 2,426
------
Total Corporate Obligations
(Cost $18,319,062) 18,517
------
U.S. GOVERNMENT AGENCY OBLIGATIONS -- 10.6%
FHLMC Remic Series 1254 Class F
7.250%, 04/15/18 205 205
FHLMC Remic Series 1411 Class E
6.000%, 02/15/16 1,725 1,713
FHLMC Remic Series 1509 Class A
6.500%, 10/15/00 1,233 1,216
FHLMC Remic Series 1519 Class F
6.750%, 03/15/07 1,755 1,780
FHLMC Remic Series 1528 Class C
6.500%, 05/15/05 1,755 1,689
FHLMC Remic Series 1606 Class KA
6.250%, 11/15/08 757 757
FNMA Pool #303460
6.500%, 07/01/10 1,809 1,795
FNMA Pool #327118
6.500%, 10/01/10 1,360 1,349
FNMA Remic Series 1992-124 Class
PG
7.000%, 01/25/18 300 302
<CAPTION>
----------------------------------------------------------
Face Market
Description Amount (000) Value (000)
----------------------------------------------------------
<S> <C> <C>
FNMA Remic Series 1992-196 Class
E
5.750%, 02/25/03 1,140 $ 1,123
FNMA Remic Series 1993-194 Class
B
5.500%, 10/25/98 $1,900 1,851
FNMA Remic Series G92-24 Class E
6.500%, 11/25/20 947 943
------
Total U.S. Government Agency Obligations
(Cost $14,643,023) 14,723
------
YANKEE BONDS -- 7.0%
BHP Financial
5.625%, 11/01/00 1,730 1,661
Carter Holt Harvey
8.875%, 12/01/04 1,120 1,277
CSR America
6.875%, 07/21/05 1,670 1,693
Korea Development Bank
6.250%, 05/01/00 1,000 994
Laidlaw
7.875%, 04/15/05 1,490 1,585
Noranda
8.000%, 06/01/03 775 829
Santander Finance
7.875%, 04/15/05 1,625 1,734
------
Total Yankee Bonds
(Cost $9,551,082) 9,773
------
MEDIUM TERM NOTES -- 2.2%
First USA Bank
6.880%, 09/12/96 655 661
Fleet Financial Group
7.180%, 07/09/97 160 163
International Leases
7.830%, 11/14/96 1,345 1,370
Paine Webber
6.730%, 01/20/04 750 731
Paine Webber Group
6.630%, 09/17/97 160 161
------
Total Medium Term Notes
(Cost $3,018,165) 3,086
------
ASSET BACKED SECURITIES -- 3.1%
Banc One Credit Card
Master Trust 1994-A
7.150%, 12/15/98 1,675 1,703
Premier Auto Trust Series 1992-2
Class A
6.375%, 09/15/97 15 15
Premier Auto Trust Series 1994-4
Class A4
6.450%, 05/02/98 1,625 1,639
Premier Auto Trust Series 1995-1
Class 4
7.850%, 09/04/98 870 895
------
Total Asset Backed Securities
(Cost $4,230,806) 4,252
------
</TABLE>
25
<PAGE>
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
----------------------------------------------------------
Face Market
Description Amount (000) Value (000)
----------------------------------------------------------
<S> <C> <C>
COMMERCIAL PAPER -- 1.1%
American Express
5.750%, 11/01/95 $1,567 $ 1,567
------
Total Commercial Paper
(Cost $1,567,000) 1,567
------
Total Investments -- 98.3%
(Cost $135,703,358) 137,102
------
OTHER ASSETS AND LIABILITIES -- 1.7%
Other Assets and Liabilities, Net 2,371
------
Total Other Assets and Liabilities 2,371
------
NET ASSETS:
Portfolio shares of the
Institutional Class (unlimited
authorization -- $0.001 par
value) based on 12,909,945
outstanding shares of
beneficial interest 135,805
Portfolio shares of the Retail
Class (unlimited
authorization --
$0.001 par value) based on
114,722 outstanding shares of
beneficial interest 1,243
Undistributed net investment
income 261
Undistributed net realized gain
on investments 765
Unrealized appreciation on
investments 1,399
------
Total Net Assets: -- 100.0% $ 139,473
======
Net Asset Value, Offering Price and
Redemption Price Per Share --
Institutional Class $ 10.71
======
Net Asset Value and Redemption
Price Per Share -- Retail Class $ 10.72
======
Maximum Offering Price Per
Share -- Retail Class
($10.72 / 98.0%) $ 10.94
======
</TABLE>
FHLMC Federal Home Loan Mortgage Corporation
FNMA Federal National Mortgage Association
REMIC Real Estate Mortgage Investment Conduit
<TABLE>
<CAPTION>
SHORT-TERM INCOME FUND
U.S. TREASURY OBLIGATIONS -- 65.8%
<S> <C> <C>
U.S. Treasury Notes
7.500%, 01/31/96 $2,975 $ 2,989
5.125%, 03/31/96 4,515 4,508
7.875%, 07/31/96 1,500 1,525
6.500%, 09/30/96 555 559
7.500%, 01/31/97 5,000 5,113
6.500%, 05/15/97 2,140 2,167
8.500%, 05/15/97 190 198
5.625%, 08/31/97 2,000 2,000
7.375%, 11/15/97 2,500 2,582
7.125%, 09/30/99 2,000 2,091
------
Total U.S. Treasury Obligations
(Cost $23,674,766) 23,732
------
</TABLE>
<TABLE>
<CAPTION>
----------------------------------------------------------
Face Market
Description Amount (000) Value (000)
----------------------------------------------------------
<S> <C> <C>
CORPORATE BONDS -- 13.0%
Philip Morris
6.500%, 12/12/95 500 $ 500
Provident Bank
5.000%, 06/15/96 520 518
Smith Barney
6.000%, 03/15/97 600 599
Smithkline Beecham
5.250%, 01/26/96 1,000 999
Tele-Communications
5.280%, 08/20/96 560 555
Transcont Gas
8.125%, 01/15/97 525 536
W.R. Grace
6.500%, 12/01/95 1,000 1,000
------
Total Corporate Bonds
(Cost $4,698,191) 4,707
------
MEDIUM TERM NOTES -- 9.0%
First USA Bank
6.880%, 09/12/96 190 192
Ford Motor Credit
8.850%, 05/01/96 1,000 1,015
International Lease
7.830%, 11/14/96 1,000 1,018
McDonnell Douglas Finance
7.310%, 02/19/96 500 502
Salomon Brothers
9.000%, 07/23/96 500 509
------
Total Medium Term Notes
(Cost $3,224,578) 3,236
------
ASSET BACKED SECURITIES -- 6.1%
Banc One Credit Card
Master Trust 1994-A
7.150%, 12/15/98 420 427
Fical Home Equity Loans 90-1a
8.900%, 11/15/97 23 23
Premier Auto Trust 1994-4
Class A-4
6.450%, 05/02/98 600 605
</TABLE>
26
<PAGE>
STATEMENT OF NET ASSETS
- --------------------------------------------------------------------------------
The Conestoga Funds--October 31, 1995
Short-Term Income Fund -- continued
<TABLE>
<CAPTION>
----------------------------------------------------------
Face Market
Description Amount (000) Value (000)
----------------------------------------------------------
<S> <C> <C>
ASSET BACKED SECURITIES -- CONTINUED
Premier Auto Trust Series 1992-2
Class A
6.375%, 09/15/97 $ 103 $ 103
Premier Auto Trust Series 1995-1
Class 4
7.850%, 09/04/98 1,000 1,028
------
Total Asset Backed Securities
(Cost $2,176,405) 2,186
------
U.S. GOVERNMENT AGENCY OBLIGATION -- 1.6%
FNMA Remic Series G92-24 Class E
6.500%, 11/25/20 577 575
------
Total U.S. Government Agency Obligation
(Cost $569,547) 575
------
COMMERCIAL PAPER -- 2.6%
American Express
5.750%, 11/01/95 932 932
------
Total Commercial Paper
(Cost $932,000) 932
------
Total Investments -- 98.1%
(Cost $35,275,487) 35,368
------
OTHER ASSETS AND LIABILITIES -- 1.9%
Other Assets and Liabilities,
Net 702
------
Total Other Assets and Liabilities 702
------
NET ASSETS:
Portfolio shares of the
Institutional Class (unlimited
authorization -- $0.001 par
value) based on 3,587,673
outstanding shares of
beneficial interest 35,870
Portfolio shares of the Retail
Class (unlimited
authorization --
$0.001 par value) based on
1,131 outstanding shares of
beneficial interest 11
Undistributed net investment
income 64
Undistributed net realized gain
on investments 33
Unrealized appreciation on
investments 92
------
Total Net Assets: -- 100.0% $ 36,070
======
Net Asset Value, Offering Price
and
Redemption Price Per Share --
Institutional Class $ 10.05
======
Net Asset Value and Redemption
Price Per Share -- Retail Class $ 10.04
======
Maximum Offering Price Per
Share -- Retail Class
($10.04 / 98.0%) $ 10.24
======
FNMA Federal National Mortgage Association
REMIC Real Estate Mortgage Investment Conduit
<CAPTION>
----------------------------------------------------------
Face Market
Description Amount (000) Value (000)
----------------------------------------------------------
<S> <C> <C>
PENNSYLVANIA TAX-FREE
Bond Fund
MUNICIPAL BONDS -- 100.8%
PENNSYLVANIA -- 100.8%
Allegheny County, Mercy Hospital
of Pittsburgh, RB, AMBAC
6.450%, 04/01/01 $ 200 $ 219
Allegheny County, Montefiore
Hospital Improvement, RB,
Escrowed To Maturity
5.800%, 10/01/03 140 146
Allentown, Water Authority, RB
5.650%, 07/15/96 100 101
Central Bucks, School District,
GO
6.600%, 02/01/03 175 191
Dauphin County, Correctional
Facility, GO, MBIA
5.450%, 08/01/07 200 204
Delaware County GO,
Callable @ 100 09/01/96
7.100%, 12/01/98 170 176
Delaware County, Villanova
University, RB, AMBAC
5.400%, 08/01/08 200 203
Erie County, Correctional
Facility, GO, MBIA, Escrowed
To Maturity
5.850%, 11/01/96 100 102
Gettysburg, Gettysburg College,
RB
5.300%, 02/15/97 250 254
Gettysburg, RB, VRDN
3.950%, 03/01/04 (B) 100 100
Hampden Township,
Sewer Authority, SO,
Escrowed To Maturity
5.350%, 04/01/03 140 145
Harrisburg, Resource Recovery,
RB
5.875%, 09/01/13 (A) 200 201
Hempfield, School District, GO,
FGIC
5.300%, 10/15/14 250 241
Keystone, School District, GO,
FGIC
4.750%, 09/01/06 240 231
Lehigh County, Sewer Authority,
RB, VRDN, FGIC
3.850%, 03/15/05 (B) 200 200
Lower Burrell, Sewer Authority,
RB, AMBAC
5.125%, 02/01/16 250 234
Millcreek Township, Sewer
Authority, RB, MBIA,
Pre-Refunded
6.000%, 11/01/99 (C) 150 159
Montgomery County, Hospital
Authority, Abington Hospital,
Series A, RB, AMBAC
5.125%, 06/01/14 250 232
</TABLE>
27
<PAGE>
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
----------------------------------------------------------
Face Market
Description Amount (000) Value (000)
----------------------------------------------------------
<S> <C> <C>
PENNSYLVANIA -- CONTINUED
Montgomery County, Public
Improvements, GO,
Callable @ 100 10/15/03
5.750%, 10/15/11 $ 175 $ 179
Nazareth, School District, GO,
AMBAC
5.500%, 11/15/12 200 198
Northampton County, Lehigh
University, Series A, RB, MBIA
5.750%, 11/15/18 150 150
Pennsylvania State, Allegheny
General Hospital, Series A, RB
6.300%, 09/01/97 200 207
Pennsylvania State, Housing
Finance Authority, Series 37a,
RB
5.450%, 10/01/17 (A) 200 183
Pennsylvania State, Industrial
Development Authority, RB,
AMBAC
5.800%, 07/01/09 250 258
Pennsylvania State,
Miscellaneous Improvement, GO,
Callable @ 100 09/01/99
6.250%, 09/01/00 150 154
Pennsylvania State, Penn State
University, RB, Callable @ 100
03/01/04
6.150%, 03/01/05 (A) 145 157
Pennsylvania State, Turnpike
Commission, Series P, RB
5.100%, 12/01/99 250 257
5.350%, 12/01/01 250 259
Pennsylvania State, University
Improvement, Series F, RB,
AMBAC, Callable @ 100 12/15/02
6.000%, 12/15/09 225 232
Philadelphia, Pennsylvania
Hospital, Series A, RB
5.250%, 02/15/14 250 236
Philadelphia, Philadelphia Gas
Works, Series 15, RB, MBIA
4.600%, 08/01/03 250 247
Quakertown, Hospital Authority,
RB, VRDN
3.750%, 07/01/05 (A) (B) 100 100
Rose Tree Media, School
District, GO, FGIC
5.350%, 02/15/10 150 150
Scranton-Lackawanna, University
of Scranton, Series A, RB,
Callable @ 100 03/01/02
6.150%, 03/01/03 (A) 150 160
Venango, Pollution Control, RB,
VRDN
4.600%, 12/01/12 (A) (B) 200 200
<CAPTION>
----------------------------------------------------------
Face Market
Description Amount (000) Value (000)
----------------------------------------------------------
<S> <C> <C>
Wayne County, Housing Authority,
RB, MBIA
5.350%, 10/01/07 $ 190 $ 186
------
Total Pennsylvania 6,852
------
Total Municipal Bonds
(Cost $6,839,773) 6,852
------
Total Investments -- 100.8%
(Cost $6,839,773) 6,852
------
OTHER ASSETS AND LIABILITIES -- (0.8)%
Other Assets and Liabilities, Net (55)
------
Total Other Assets and Liabilities (55)
------
NET ASSETS:
Portfolio shares of the
Institutional Class (unlimited
authorization -- $0.001 par
value) based on 584,020
outstanding shares of
beneficial interest 6,018
Portfolio shares of the Retail
Class (unlimited
authorization --
$0.001 par value) based on
80,106 outstanding shares of
beneficial interest 825
Undistributed net investment
income 10
Accumulated net realized loss on
investments (68)
Unrealized appreciation on
investments 12
------
Total Net Assets: -- 100.0% $ 6,797
======
Net Asset Value, Offering Price
and Redemption Price Per
Share -- Institutional Class $ 10.23
======
Net Asset Value and Redemption
Price Per Share -- Retail Class $ 10.23
======
Maximum Offering Price Per
Share -- Retail Class
($10.23 / 98.0%) $ 10.44
======
</TABLE>
AMBAC American Municipal Bond Assurance Company
FGIC Federal Guaranty Insurance Corporation
GO General Obligation
MBIA Municipal Bond Insurance Association
RB Revenue Bonds
SO Special Obligation
VRDN Variable Rate Demand Note
(A) Securities are held in connection with a letter of
credit or other credit support.
(B) Floating Rate Security -- the rate reflected on the
Statement of Net Assets is the rate in effect on October
31, 1995.
(C) Pre-Refunded Security -- The Maturity Date shown is the
pre-refunded date.
28
<PAGE>
STATEMENT OF NET ASSETS
- --------------------------------------------------------------------------------
The Conestoga Funds--October 31, 1995
CASH MANAGEMENT FUND
<TABLE>
<CAPTION>
----------------------------------------------------------
Face
Description Amount (000) Value (000)
----------------------------------------------------------
<S> <C> <C>
COMMERCIAL PAPER -- 36.6%
Abbey National
5.590%, 01/08/96 $ 5,000 $ 4,947
AIG Funding
6.035%, 11/01/95 3,000 3,000
American Express
5.700%, 11/01/95 5,000 5,002
5.690%, 01/12/96 5,000 4,943
Associates
5.700%, 01/23/96 5,000 4,934
Caisse Des Depots Et
Consignations
5.640%, 01/16/96 5,000 4,940
Eli Lilly
5.820%, 01/16/96 3,000 2,963
General Electric Capital
5.670%, 11/16/95 4,000 3,991
5.660%, 02/12/96 5,000 4,919
International Lease Finance
5.710%, 01/08/96 5,000 4,946
5.630%, 01/22/96 5,000 4,936
J.C. Penney
5.710%, 11/30/95 5,000 4,977
Pepsico
5.670%, 11/03/95 5,000 4,998
Province of Alberta
5.550%, 01/12/96 3,000 2,967
Sara Lee
5.800%, 11/02/95 5,000 4,999
5.710%, 11/08/95 5,000 4,994
Toronto Dominion Bank
5.660%, 01/17/96 5,000 4,939
5.490%, 03/19/96 5,000 4,894
Transamerica Finance
5.620%, 02/15/96 5,000 4,917
------
Total Commercial Paper
(Cost $87,206,251) 87,206
------
U.S. GOVERNMENT AGENCY OBLIGATIONS -- 7.5%
FHLB
5.490%, 01/17/96 3,000 2,965
FHLMC
5.560%, 11/21/95 5,000 4,985
FNMA
5.590%, 01/04/96 5,000 4,950
5.580%, 02/20/96 5,000 4,914
------
Total U.S. Government Agency Obligations
(Cost $17,813,615) 17,814
------
BANK NOTES -- 3.8%
FCC National Bank
5.900%, 08/21/96 5,000 4,996
5.650%, 11/01/96 4,000 3,997
------
Total Bank Notes
(Cost $8,993,431) 8,993
------
U.S. TREASURY OBLIGATIONS -- 3.3%
U.S. Treasury Bills
5.410%, 01/11/96 $ 3,000 2,968
5.540%, 07/25/96 5,000 4,795
------
Total U.S. Treasury Obligations
(Cost $7,762,549) 7,763
------
<CAPTION>
----------------------------------------------------------
Face
Description Amount (000) Value (000)
----------------------------------------------------------
<S> <C> <C>
CERTIFICATES OF DEPOSIT -- 2.1%
National Westminster Bank
5.770%, 12/11/95 5,000 $ 5,000
------
Total Certificates of Deposit
(Cost $5,000,000) 5,000
------
REPURCHASE AGREEMENTS -- 48.8%
Hong Kong Shanghai Banking
5.850%, dated 10/31/95,
matures 11/01/95, repurchase
price $35,005,688
(collateralized by
U.S. Treasury Note, par value
$35,000,000, 6.875%, matures
03/31/97: market value
$35,803,299) 35,000 35,000
Merrill Lynch
5.850%, dated 10/31/95,
matures 11/01/95, repurchase
price $46,173,402
(collateralized by various
U.S. Treasury Notes,
total par value $44,803,000,
6.500%-6.875%, 04/30/97: total
market value $47,090,599) 46,166 46,166
Morgan Stanley
5.850%, dated 10/31/95,
matures 11/01/95, repurchase
price $35,005,688
(collateralized by
U.S. Treasury Note, par value
$26,675,000, 9.250%, matures
02/15/16: market value
$35,747,093) 35,000 35,000
------
Total Repurchase Agreements
(Cost $116,165,900) 116,166
------
Total Investments -- 102.1%
(Cost $242,941,746) 242,942
------
OTHER ASSETS AND LIABILITIES -- (2.1%)
Other Assets and Liabilities,
Net (5,064)
------
Total Other Assets and Liabilities (5,064)
------
NET ASSETS:
Portfolio shares of the
Institutional Class (unlimited
authorization -- $0.001 par
value) based on 234,652,830
outstanding shares of
beneficial interest 234,653
Portfolio shares of the Retail
Class (unlimited
authorization --
$0.001 par value) based on
3,361,129 outstanding shares
of
beneficial interest 3,361
</TABLE>
29
<PAGE>
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
----------------------------------------------------------
Face
Description Amount (000) Value (000)
----------------------------------------------------------
<S> <C> <C>
NET ASSETS -- CONTINUED
Accumulated net realized loss on
investments $ (136)
------
Total Net Assets: -- 100.0% $ 237,878
======
Net Asset Value, Offering Price
and Redemption Price Per
Share -- Institutional Class $ 1.00
======
Net Asset Value, Offering Price
and Redemption Price Per
Share --
Retail Class $ 1.00
======
</TABLE>
FHLB Federal Home Loan Bank
FHLMC Federal Home Loan Mortgage Corporation
FNMA Federal National Mortgage Association
<TABLE>
<CAPTION>
U.S. TREASURY
SECURITIES FUND
U.S. TREASURY OBLIGATIONS -- 39.9%
<S> <C> <C>
U.S. Treasury Bills
5.720%, 11/09/95 $ 10,000 $ 9,987
5.400%, 12/21/95 20,000 19,850
5.340%, 01/04/96 25,000 24,763
5.310%, 01/11/96 10,000 9,895
5.410%, 01/11/96 10,000 9,893
5.830%, 01/11/96 10,000 9,885
5.780%, 02/08/96 10,000 9,851
5.300%, 03/07/96 15,000 14,720
5.290%, 03/14/96 10,000 9,803
5.310%, 04/04/96 15,000 14,657
6.020%, 04/04/96 5,000 4,875
5.540%, 05/02/96 10,000 9,718
5.540%, 07/25/96 5,000 4,795
U.S. Treasury Notes
7.500%, 02/29/96 10,000 10,062
7.625%, 04/30/96 10,000 10,096
U.S. Treasury Strip
05/15/96 5,000 4,854
------
Total U.S. Treasury Obligations
(Cost $177,703,757) 177,704
------
REPURCHASE AGREEMENTS -- 60.5%
Barclays De Zoete Wedd
5.850%, dated 10/31/95,
matures 11/01/95, repurchase
price $50,008,125
(collateralized by
U.S. Treasury Note, par value
$32,632,000, 11.250%, matures
02/15/15: market value
$51,069,081) 50,000 50,000
Hong Kong Shanghai Banking
5.850%, dated 10/31/95,
matures 11/01/95, repurchase
price $85,013,813
(collateralized by various
U.S. Treasury Notes,
total par value $70,220,000,
7.125%-12.500%,
08/15/14-02/15/23:
total market value
$87,257,890) $ 85,000 $ 85,000
<CAPTION>
----------------------------------------------------------
Face
Description Amount (000) Value (000)
----------------------------------------------------------
<S> <C> <C>
Merrill Lynch
5.850%, dated 10/31/95,
matures 11/01/95, repurchase
price $49,579,455
(collateralized by various
U.S. Treasury Notes, total par
value $40,257,000, 7.250%-
9.875%, 11/15/15-05/15/17:
total market value
$50,566,595) $ 49,571 $ 49,571
Morgan Stanley
5.850%, dated 10/31/95,
matures 11/01/95, repurchase
price $85,013,813
(collateralized by
U.S. Treasury Note, par value
$66,670,000, 8.750%, matures
08/15/20: market value
$86,689,520) 85,000 85,000
------
Total Repurchase Agreements
(Cost $269,571,400) 269,571
------
Total Investments -- 100.4%
(Cost $447,275,157) 447,275
------
OTHER ASSETS AND LIABILITIES -- (0.4%)
Other Assets and Liabilities,
Net (2,016)
------
Total Other Assets and Liabilities (2,016)
------
NET ASSETS:
Portfolio shares of the
Institutional Class (unlimited
authorization -- $0.001 par
value) based on 444,422,563
outstanding shares of
beneficial interest 444,423
Portfolio shares of the Retail
Class (unlimited
authorization --
$0.001 par value) based on
729,856 outstanding shares of
beneficial interest 730
Undistributed net realized gain
on investments 106
------
Total Net Assets: -- 100.0% $ 445,259
======
Net Asset Value, Offering and
Redemption Price Per Share --
Institutional Class $ 1.00
======
Net Asset Value, Offering and
Redemption Price Per Share --
Retail Class $ 1.00
======
</TABLE>
30
<PAGE>
STATEMENT OF NET ASSETS
- --------------------------------------------------------------------------------
The Conestoga Funds--October 31, 1995
TAX-FREE FUND
<TABLE>
<CAPTION>
----------------------------------------------------------
Face
Description Amount (000) Value (000)
----------------------------------------------------------
<S> <C> <C>
MUNICIPAL BONDS -- 99.9%
ALABAMA -- 0.7%
McIntosh, Industrial Development
Board, Ciba Geigy Corporate
Project, RB, VRDN
4.000%, 07/01/04 (A) (B) $ 400 $ 400
------
Total Alabama 400
------
ARIZONA -- 0.4%
Flagstaff, TECP
3.500%, 12/05/95 (B) 250 250
------
Total Arizona 250
------
ARKANSAS -- 4.9%
Mesa, Municipal Developement,
TECP
3.800%, 12/06/95 (B) 3,000 3,000
------
Total Arkansas 3,000
------
COLORADO -- 3.2%
Colorado State, Health
Facilities Authority, RB,
VRDN, MBIA
3.900%, 10/01/14 (A) 1,955 1,955
------
Total Colorado 1,955
------
FLORIDA -- 1.1%
Hillsborough, Pollution Control,
RB, VRDN
4.000%, 09/01/25 (A) (B) 700 700
------
Total Florida 700
------
GEORGIA -- 3.9%
Burke County, TECP
3.750%, 12/07/95 (B) 2,400 2,400
------
Total Georgia 2,400
------
HAWAII -- 2.4%
St County Honolulu, TECP
3.800%, 12/05/95 (B) 1,500 1,500
------
Total Hawaii 1,500
------
ILLINOIS -- 1.9%
Chicago, O'Hare Airport, RB,
VRDN
3.900%, 01/01/18 (A) (B) 1,200 1,200
------
Total Illinois 1,200
------
KANSAS -- 4.8%
Burlington, TECP
3.750%, 11/15/95 (B) 1,450 1,450
3.850%, 12/13/95 (B) 1,500 1,500
------
Total Kansas 2,950
------
KENTUCKY -- 3.6%
Jefferson County, TECP
3.800%, 11/20/95 (B) 2,200 2,200
------
Total Kentucky 2,200
------
LOUISIANA -- 2.5%
Louisiana State, Public
Facilities, RB, VRDN, FGIC
3.900%, 09/01/10 (A) $ 1,565 1,565
------
Total Louisiana 1,565
------
<CAPTION>
----------------------------------------------------------
Face
Description Amount (000) Value (000)
----------------------------------------------------------
<S> <C> <C>
MICHIGAN -- 4.5%
Delta County, TECP
3.750%, 11/21/95 (B) 1,300 $ 1,300
Michigan State, Storage Tank
Financial Authority, RB, VRDN
3.900%, 12/01/04 (A) (B) 1,500 1,500
------
Total Michigan 2,800
------
MINNESOTA -- 6.0%
Robbinsdale, Industrial
Development, Unicare Homes
Project,
RB, VRDN
4.000%, 10/01/14 (A) (B) 1,100 1,100
Rochester, TECP
3.150%, 11/09/95 (B) 1,100 1,100
3.800%, 01/22/96 (B) 1,500 1,500
------
Total Minnesota 3,700
------
MISSISSIPPI -- 6.2%
Independence, Waste, TECP
3.500%, 11/03/95 (B) 2,000 2,000
Jackson County, Pollution
Control, RB, VRDN
3.900%, 12/01/16 (A) 1,000 1,000
Perry County, Pollution Control,
RB, VRDN
3.950%, 03/01/02 (A) (B) 800 800
------
Total Mississippi 3,800
------
MISSOURI -- 1.1%
Kansas City, Hospital, RB, VRDN,
MBIA
4.000%, 04/15/15 (A) 700 700
------
Total Missouri 700
------
MONTANA -- 1.0%
Billings, Industrial
Development, RB, VRDN
3.950%, 12/01/14 (A) (B) 600 600
------
Total Montana 600
------
NEW YORK -- 2.1%
New York, Water Finance
Authority, RB, VRDN, FGIC
4.000%, 06/15/22 (A) 300 300
4.000%, 06/15/23 (A) 1,000 1,000
------
Total New York 1,300
------
NORTH CAROLINA -- 6.6%
Eastern Municipal Agency, Power
Systems, RB, Prerefunded
01/01/96 @ 103
7.750%, 01/01/96 (C) 2,000 2,070
</TABLE>
31
<PAGE>
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
----------------------------------------------------------
Face
Description Amount (000) Value (000)
----------------------------------------------------------
<S> <C> <C>
NORTH CAROLINA -- CONTINUED
North Carolina, Municipal Power,
TECP
3.750%, 01/24/96 (B) $ 2,000 $ 2,000
------
Total North Carolina 4,070
------
OHIO -- 8.1%
Ohio State, Air Quality
Development Authority, RB,
VRDN
4.000%, 09/01/30 (A)(B) 2,000 2,000
Ohio State, Air Quality, TECP
3.700%, 11/06/95 (B) 3,000 3,000
------
Total Ohio 5,000
------
PENNSYLVANIA -- 2.4%
Delaware County, TECP, FGIC
3.600%, 11/02/95 1,500 1,500
------
Total Pennsylvania 1,500
------
TEXAS -- 12.3%
Harris County, RB, VRDN
4.000%, 03/01/24 (A) (B) 1,100 1,100
San Antonio, Independent School
District, GO, Prerefunded
11/01/95 @ 100
8.000%, 11/01/95 (C) 1,700 1,700
Texas A & M, TECP
3.800%, 12/08/95 (B) 1,500 1,500
Texas Port Development
Authority, Stolt Terminals
Project, RB, VRDN
3.850%, 01/15/14 (A) (B) 1,300 1,300
Texas State, TAN
4.750%, 08/30/96 2,000 2,012
------
Total Texas 7,612
------
VIRGINIA -- 3.2%
Chesapeake, Independent
Development Authority, TECP
3.600%, 11/06/95 (B) 1,000 1,000
Penninsula Ports, TECP
3.650%, 11/07/95 (B) 1,000 1,000
------
Total Virginia 2,000
------
WASHINGTON, D.C. -- 4.6%
District of Columbia, Education
Bonds, American University
Issue A, RB, VRDN
3.950%, 12/01/15 (A) (B) 2,835 2,835
------
Total Washington, D.C. 2,835
------
WYOMING -- 12.5%
Converse, TECP
3.500%, 11/06/95 (B) 1,000 1,000
Gillette County, TECP
3.700%, 11/17/95 (B) 1,000 1,000
<CAPTION>
----------------------------------------------------------
Face
Description Amount (000) Value (000)
----------------------------------------------------------
<S> <C> <C>
Lincoln County, TECP
3.700%, 11/21/95 (B) $ 1,400 $ 1,400
Sweetwater County, TECP
3.650%, 12/08/95 2,500 2,499
Uinta County, Pollution Control,
RB, VRDN
3.900%, 08/15/02 (A) (B) 1,800 1,800
------
Total Wyoming 7,699
------
Total Municipal Bonds
(Cost $61,736,077) 61,736
------
Total Investments -- 99.9%
(Cost $61,736,077) 61,736
------
OTHER ASSETS AND LIABILITIES -- 0.1%
Other Assets and Liabilites, Net 55
------
Total Other Assets and Liabilities 55
------
NET ASSETS:
Portfolio shares of the
Institutional Class (unlimited
authorization -- $0.001 par
value) based on 60,491,930
outstanding shares of
beneficial interest 60,492
Portfolio shares of the Retail
Class (unlimited
authorization --
$0.001 par value ) based on
1,281,648 outstanding shares
of
beneficial interest 1,282
Undistributed net realized gain
on investments 17
------
Total Net Assets: -- 100.0% $ 61,791
======
Net Asset Value, Offering and
Redemption Price Per Share --
Institutional Class $ 1.00
======
Net Asset Value, Offering and
Redemption Price Per Share --
Retail Class $ 1.00
======
</TABLE>
FGIC Financial Guaranty Insurance Corporation
GO General Obligation
MBIA Municipal Bond Insurance Association
RB Revenue Bond
TAN Tax Anticipation Note
TECP Tax Exempt Commercial Paper
VRDN Variable Rate Demand Note
(A) Floating Rate Security -- the rate reflected on the
Statement of Net Assets is the rate in effect on October
31, 1995.
(B) Securities are held in conjunction with a letter of
credit or other credit support.
(C) The maturity date shown is the pre-refunded date.
32
<PAGE>
STATEMENT OF OPERATIONS (000)
- --------------------------------------------------------------------------------
The Conestoga Funds--For the year ended October 31, 1995
<TABLE>
<CAPTION>
------- ------- ------------ --------
SPECIAL INTERNATIONAL
EQUITY EQUITY EQUITY BALANCED
FUND FUND FUND(1) FUND(2)
------- ------- ------------ --------
<S> <C> <C> <C> <C>
INVESTMENT INCOME:
Interest Income $ 582 $ 121 $ 50 $ 427
Dividend Income 4,507 351 48 104
Less Foreign Taxes Withheld -- -- (6) --
------- ------- -------- -------
Total Investment Income 5,089 472 92 531
------- ------- -------- -------
EXPENSES:
Investment Advisory Fees 1,503 480 51 89
Investment Advisory Fees Waived -- (466) -- (30)
Reimbursement from Advisor -- (50) -- --
Administrator Fees 352 56 9 20
Administrator Fees Waived (97) (18) -- (1)
Shareholder Servicing Fees(3) 38 8 -- --
Shareholder Servicing Fees Waived -- (8) -- --
Distribution Fees(4) 17 2 -- --
Distribution Fees Waived (10) (2) -- --
Registration Fees 114 20 5 4
Custody and Accounting Fees 71 30 17 2
Professional Fees 48 11 1 4
Transfer Agent Fees 86 25 1 4
Printing Fees 25 4 1 1
Pricing Expense 3 -- 8 --
Trustee Fees 12 2 -- 1
Insurance and Other Fees 3 2 2 1
Amortization of Deferred Organization Costs -- 8 2 2
------- ------- -------- -------
Total Expenses 2,165 104 97 97
------- ------- -------- -------
NET INVESTMENT INCOME (LOSS) 2,924 368 (5) 434
------- ------- -------- -------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:
Net Realized Gain (Loss) on Security Transactions 28,979 8,512 (33) 285
Net Realized Gain on Foreign Currency Transactions -- -- 234 --
Net Change in Unrealized Appreciation on Investments 12,894 1,127 707 859
Net Change in Unrealized Appreciation on Foreign
Currency
and Translation of Other Assets and Liabilities in
Foreign Currencies -- -- 45 --
------- ------- -------- -------
Net Realized and Unrealized Gain (Loss) on
Investments: 41,873 9,639 953 1,144
------- ------- -------- -------
INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $44,797 $10,007 $ 948 $1,578
------- ------- -------- -------
------- ------- -------- -------
</TABLE>
Amounts designated as "--" are either $0 or have been rounded to $0.
(1) The International Equity Fund and the Short-Term Income Fund commenced
operations on May 15, 1995.
(2) The Balanced Fund commenced operations on June 26, 1995.
(3) Shareholder Servicing Fees relate to a Shareholder Service Plan that was in
effect through February 20, 1995.
(4) Distribution Fees relate to a Distribution Plan effective February 21, 1995
and are incurred solely by the Retail Class.
The accompanying notes are an integral part of the financial statements.
33
<PAGE>
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
------- ------------ ---------- ------------ ---------- ------------- --------
PENNSYLVANIA
INTERMEDIATE SHORT-TERM TAX-FREE CASH U.S. TREASURY
BOND INCOME INCOME BOND MANAGEMENT SECURITIES TAX-FREE
FUND FUND FUND(1) FUND FUND FUND FUND
------- ------------ ---------- ------------ ---------- ------------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
$ 6,924 $4,760 $1,095 $323 $ 11,680 $21,001 $2,484
-- -- -- -- -- -- --
-- -- -- -- -- -- --
------- --------- -------- -------- -------- ---------- -------
6,924 4,760 1,095 323 11,680 21,001 2,484
------- --------- -------- -------- -------- ---------- -------
750 552 135 46 794 1,457 259
(409) (365) (82) (39) (397) (456) (158)
-- (6) -- (24) -- -- --
176 129 31 11 366 671 120
(13) (5) -- (3) -- (35) (35)
21 14 -- 5 145 266 51
(3) (8) -- (5) (62) (106) (51)
3 4 -- 2 10 30 5
(1) (2) -- (2) (3) (13) (5)
63 47 13 1 53 63 21
46 38 3 21 64 100 27
31 26 3 4 62 116 19
39 36 5 11 43 61 23
12 9 2 2 20 44 9
2 5 1 1 -- -- --
6 4 1 -- 11 24 4
3 6 1 1 19 45 7
-- -- 1 -- -- -- --
------- --------- -------- -------- -------- ---------- -------
726 484 114 32 1,125 2,267 296
------- --------- -------- -------- -------- ---------- -------
6,198 4,276 981 291 10,555 18,734 2,188
------- --------- -------- -------- -------- ---------- -------
3,058 1,152 32 (68) 2 41 (4)
-- -- -- -- -- -- --
3,499 1,825 92 501 -- -- --
-- -- -- -- -- -- --
------- --------- -------- -------- -------- ---------- -------
6,557 2,977 124 433 2 41 (4)
------- --------- -------- -------- -------- ---------- -------
$12,755 $7,253 $1,105 $724 $ 10,557 $18,775 $2,184
------- --------- -------- -------- -------- ---------- -------
------- --------- -------- -------- -------- ---------- -------
</TABLE>
The accompanying notes are an integral part of the financial statements.
34
<PAGE>
STATEMENT OF CHANGES IN NET ASSETS (000)
- --------------------------------------------------------------------------------
The Conestoga Funds--October 31, 1995
<TABLE>
<CAPTION>
-------------------- -------------------- ----------- ---------- --------------------
SPECIAL INTERNATIONAL
EQUITY EQUITY EQUITY BALANCED BOND
FUND FUND FUND FUND FUND
-------------------- -------------------- ----------- ---------- --------------------
11/1/94 11/1/93 11/1/94 3/15/94** 5/15/95** 6/26/95** 11/1/94 11/1/93
to 10/31/95 to 10/31/94 to 10/31/95 to 10/31/94 to 10/31/95 to 10/31/95 to 10/31/95 to 10/31/94
---------- ---------- ---------- ---------- ----------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
OPERATIONS:
Net Investment Income
(Loss) $ 2,924 $ 361 $ 368 $ 62 $ (5) $ 434 $ 6,198 $ 1,302
Net Realized Gain (Loss)
on Securities and
Foreign Currency
Transactions 28,979 2,619 8,512 51 201 285 3,058 (1,359)
Net Change in Unrealized
Appreciation
(Depreciation) of
Investments and Foreign
Currencies 12,894 (1,933) 1,127 (583) 752 859 3,499 (1,239)
-------- -------- -------- -------- --------- -------- -------- --------
Increase (Decrease) in
Net Assets Resulting
from Operations 44,797 1,047 10,007 (470) 948 1,578 12,755 (1,296)
-------- -------- -------- -------- --------- -------- -------- --------
DISTRIBUTIONS TO
SHAREHOLDERS:
Net Investment Income:
Prior Class (a)* (125) (361) (35) (57) -- -- (359) (1,291)
Retail Class (b)* (53) -- (5) -- -- (1) (56) --
Institutional Class
(b)* (2,638) -- (316) -- -- (386) (5,443) --
Net Realized Gains:
Prior Class (a)* (2,660) (1,895) (80) -- -- -- -- (841)
-------- -------- -------- -------- --------- -------- -------- --------
Total Distributions (5,476) (2,256) (436) (57) -- (387) (5,858) (2,132)
CAPITAL TRANSACTIONS (C):
Prior Class (a)*:
Redesignated to Retail
Class (5,674) -- (471) -- -- -- (1,365) --
Redesignated to
Institutional Class (42,589) -- (9,970) -- -- -- (29,097) --
Proceeds from Shares
Issued 4,679 15,691 652 11,284 -- -- 9,204 5,563
Reinvestment of Cash
Distributions 2,420 1,929 115 57 -- -- 244 1,430
Cost of Shares
Repurchased (6,294) (11,959) (81) (745) -- -- (2,665) (7,534)
-------- -------- -------- -------- --------- -------- -------- --------
Increase (Decrease) in
Net Assets Derived from
Prior Class
Transactions (47,458) 5,661 (9,755) 10,596 -- -- (23,679) (541)
Retail Class (b)*:
Redesignated from Prior
Class 5,674 -- 471 -- -- -- 1,365 --
Proceeds from Shares
Issued 676 -- 186 -- 9 68 164 --
Reinvestment of Cash
Distributions 52 -- 5 -- -- -- 48 --
Cost of Shares
Repurchased (948) -- (57) -- (1) -- (291) --
-------- -------- -------- -------- --------- -------- -------- --------
Increase in Net Assets
Derived from Retail
Class Transactions 5,454 -- 605 -- 8 68 1,286 --
Institutional Class (b)*:
Redesignated from Prior
Class 42,589 -- 9,970 -- -- -- 29,097 --
Proceeds from Shares
Issued 351,837 -- 46,892 -- 13,282 39,740 192,154 --
Reinvestment of Cash
Distributions 2,568 -- 316 -- -- 386 5,109 --
Cost of Shares
Repurchased (59,497) -- (9,538) -- (857) (2,822) (38,426) --
-------- -------- -------- -------- --------- -------- -------- --------
Increase (Decrease) in
Net Assets Derived from
Institutional Class
Transactions 337,497 -- 47,640 -- 12,425 37,304 187,934 --
-------- -------- -------- -------- --------- -------- -------- --------
Increase (Decrease) in Net
Assets Derived from
Capital Transactions 295,493 5,661 38,490 10,596 12,433 37,372 165,541 (541)
-------- -------- -------- -------- --------- -------- -------- --------
Net Increase (Decrease)
in Net Assets 334,815 4,452 48,061 10,069 13,381 38,563 172,438 (3,969)
-------- -------- -------- -------- --------- -------- -------- --------
NET ASSETS:
Beginning of Period 50,128 45,676 10,069 -- -- -- 23,377 27,346
-------- -------- -------- -------- --------- -------- -------- --------
End of Period $ 384,943 $ 50,128 $58,130 $10,069 $13,381 $38,563 $ 195,815 $23,377
-------- -------- -------- -------- --------- -------- -------- --------
-------- -------- -------- -------- --------- -------- -------- --------
</TABLE>
Amounts designated as "--" are either $0 or have been rounded to $0.
* On February 21, 1995, the shareholders of each fund ratified the
classification of such fund's outstanding shares into Retail and
Institutional shares.
** Commencement of operations.
(a) For the current fiscal year Prior Class figures represent activity from
November 1, 1994 to February 21, 1995.
(b) Retail and Institutional Class figures represent activity from February 22,
1995 through October 31, 1995.
(c) See Capital Share Transactions in the Notes to the Financial Statements.
The accompanying notes are an integral part of the financial statements.
35
<PAGE>
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
-------------------- ---------- -------------------- -------------------- -------------------- -----------
SHORT- PENNSYLVANIA
INTERMEDIATE TERM TAX-FREE CASH U.S. TREASURY
INCOME INCOME BOND MANAGEMENT SECURITIES TAX-FREE
FUND FUND FUND FUND FUND FUND
-------------------- ---------- -------------------- -------------------- -------------------- -----------
11/1/94 11/1/93 5/15/95** 11/1/94 11/1/93 11/1/94 11/1/93 11/1/94 11/1/93 11/1/94
to 10/31/95 to 10/31/94 to 10/31/95 to 10/31/95 to 10/31/94 to 10/31/95 to 10/31/94 to 10/31/95 to 10/31/94 to 10/31/95
---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
$ 4,276 $ 1,036 $ 981 $ 291 $ 354 $ 10,555 $ 4,692 $ 18,734 $ 9,637 $ 2,188
1,152 (387) 32 (68) 9 2 (220) 41 10 (4)
1,825 (920) 92 501 (767) -- -- -- -- --
-------- -------- -------- -------- -------- --------- --------- --------- --------- ---------
7,253 (271) 1,105 724 (404) 10,557 4,472 18,775 9,647 2,184
-------- -------- -------- -------- -------- --------- --------- --------- --------- ---------
(264) (1,030) -- (81) (351) (2,788) (4,692) (5,069) (9,637) (706)
(50) -- -- (25) -- (133) -- (586) -- (42)
(3,736) -- (917) (186) -- (7,634) -- (13,079) -- (1,440)
-- (294) -- (9) (42) -- -- -- -- --
-------- -------- -------- -------- -------- --------- --------- --------- --------- ---------
(4,050) (1,324) (917) (301) (393) (10,555) (4,692) (18,734) (9,637) (2,188)
(1,398) -- -- (684) -- (4,185) -- (618) -- (2,456)
(15,213) -- -- (5,397) -- (206,899) -- (311,650) -- (67,736)
1,544 8,000 -- 470 6,261 229,934 588,009 304,528 797,674 113,629
179 891 -- 40 175 31 34 10 17 86
(6,352) (10,096) -- (1,662) (4,513) (159,426) (662,501) (317,660) (730,256) (98,423)
-------- -------- -------- -------- -------- --------- --------- --------- --------- ---------
(21,240) (1,205) -- (7,233) 1,923 (140,545) (74,458) (325,390) 67,435 (54,900)
1,398 -- -- 684 -- 4,185 -- 618 -- 2,456
161 -- 11 168 -- 1,981 -- 130,272 -- 330
46 -- -- 23 -- 126 -- 22 -- 42
(429) -- -- (78) -- (2,934) -- (130,182) -- (1,546)
-------- -------- -------- -------- -------- --------- --------- --------- --------- ---------
1,176 -- 11 797 -- 3,358 -- 730 -- 1,282
15,213 -- -- 5,397 -- 206,899 -- 311,650 -- 67,736
139,413 -- 46,933 1,858 -- 457,561 -- 1,003,030 -- 201,870
3,580 -- 917 73 -- 478 -- 683 -- 91
(23,119) -- (11,979) (1,527) -- (430,420) -- (870,864) -- (209,187)
-------- -------- -------- -------- -------- --------- --------- --------- --------- ---------
[135,087] -- 35,871 5,801 -- 234,518 -- 444,499 -- 60,510
-------- -------- -------- -------- -------- --------- --------- --------- --------- ---------
115,023 (1,205) 35,882 (634) 1,923 97,331 (74,458) 119,839 67,435 6,891
-------- -------- -------- -------- -------- --------- --------- --------- --------- ---------
118,226 (2,800) 36,070 (211) 1,126 97,333 (74,678) 119,880 67,445 6,887
-------- -------- -------- -------- -------- --------- --------- --------- --------- ---------
21,247 24,047 -- 7,008 5,882 140,545 215,223 325,379 257,934 54,904
-------- -------- -------- -------- -------- --------- --------- --------- --------- ---------
$ 139,473 $ 21,247 $ 36,070 $ 6,797 $ 7,008 $ 237,878 $ 140,545 $ 445,259 $ 325,379 $ 61,791
-------- -------- -------- -------- -------- --------- --------- --------- --------- ---------
-------- -------- -------- -------- -------- --------- --------- --------- --------- ---------
<CAPTION>
TAX-FREE
FUND
-----------
11/1/93
to 10/31/94
------------
<S> <C>
$ 1,197
--
--
---------
1,197
---------
(1,197)
--
--
--
---------
(1,197)
--
--
261,151
73
(252,559)
---------
8,665
--
--
--
--
---------
--
--
--
--
--
---------
--
---------
8,665
---------
8,665
---------
46,239
---------
$ 54,904
---------
---------
</TABLE>
The accompanying notes are an integral part of the financial statements.
36
<PAGE>
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
The Conestoga Funds--For the year ended October 31, 1995
For a Share Outstanding Throughout the Period
<TABLE>
<CAPTION>
Net
Realized and
Unrealized Net
Net Asset Gains Dividends Distributions Assets
Value Net (Losses) from Net from Net Asset End of
Beginning Investment on Investment Realized Value End Total Period
of Period Income Investments Income Capital Gains of Period Return* (000)
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
- -------------
EQUITY FUND
- -------------
RETAIL
1995(1) $ 15.00 $ 0.18 $ 2.87 $(0.17) $ (0.80) $ 17.08 21.94% $ 6,591
INSTITUTIONAL
1995(1) 15.00 0.19 2.87 (0.19) (0.80) 17.07 22.00% 378,352
PRIOR CLASS
1994 15.39 0.11 0.22 (0.11) (0.61) 15.00 2.21% 50,128
1993 13.93 0.14 1.89 (0.14) (0.43) 15.39 14.90% 45,677
1992 13.08 0.19 1.02 (0.19) (0.17) 13.93 9.27% 28,103
1991 8.95 0.26 4.13 (0.26) -- 13.08 49.37% 12,830
1990(2) 10.00 0.14 (1.05) (0.14) -- 8.95 (9.22)% 5,982
- ----------------------
SPECIAL EQUITY FUND
- ----------------------
RETAIL
1995(1) $ 9.37 $ 0.12 $ 2.12 $(0.12) $ (0.07) $ 11.42 24.44% $ 734
INSTITUTIONAL
1995(1) 9.37 0.12 2.12 (0.12) (0.07) 11.42 24.44% 57,396
PRIOR CLASS
1994(3) 10.00 0.06 (0.63) (0.06) -- 9.37 (5.72)% 10,069
- ----------------------------
INTERNATIONAL EQUITY FUND
- ----------------------------
RETAIL
1995(4) $ 10.00 $ (.01) $ 1.00 $ -- $ -- $ 10.99 9.90% $ 9
INSTITUTIONAL
1995(4) 10.00 -- 1.01 -- -- 11.01 10.10% 13,372
- ----------------
BALANCED FUND
- ----------------
RETAIL
1995(5) $ 9.97 $ 0.11 $ 0.42 $(0.11) $ -- $ 10.39 5.27% $ 69
INSTITUTIONAL
1995(6) 10.00 0.12 0.37 (0.11) -- 10.38 4.89% 38,494
- ------------
BOND FUND
- ------------
RETAIL
1995(1) $ 9.81 $ 0.60 $ 0.72 $(0.57) $ -- $ 10.56 13.83% $ 1,373
INSTITUTIONAL
1995(1) 9.81 0.61 0.71 (0.58) -- 10.55 13.87% 194,442
PRIOR CLASS
1994 11.18 0.53 (1.04) (0.52) (0.34) 9.81 (4.75)% 23,377
1993 10.89 0.56 0.54 (0.56) (0.25) 11.18 10.63% 27,346
1992 10.65 0.70 0.32 (0.68) (0.10) 10.89 9.82% 15,180
1991 9.96 0.78 0.69 (0.78) -- 10.65 15.16% 7,255
1990(2) 10.00 0.50 (0.04) (0.50) -- 9.96 4.64% 4,593
- -----------------------------
INTERMEDIATE INCOME FUND
- -----------------------------
RETAIL
1995(1) $ 10.27 $ 0.55 $ 0.44 $(0.54) $ -- $ 10.72 9.90% $ 1,230
INSTITUTIONAL
1995(1) 10.27 0.57 0.42 (0.55) -- 10.71 9.92% 138,243
PRIOR CLASS
1994 11.01 0.50 (0.61) (0.49) (0.14) 10.27 (0.97)% 21,247
1993 10.87 0.53 0.21 (0.53) (0.07) 11.01 6.99% 24,047
1992 10.61 0.65 0.29 (0.64) (0.04) 10.87 9.11% 16,718
1991 10.12 0.77 0.50 (0.77) (0.01) 10.61 12.94% 7,116
1990(2) 10.00 0.48 0.12 (0.48) -- 10.12 6.10% 3,986
- ----------------------------
SHORT-TERM INCOME FUND
- ----------------------------
RETAIL
1995(7) $ 10.01 $ 0.23 $ 0.02 $(0.22) $ -- $ 10.04 2.57% $ 11
INSTITUTIONAL
1995(4) 10.00 0.25 0.03 (0.23) -- 10.05 2.87% 36,059
<CAPTION>
Ratio of
Ratio of of Expenses Income
Net to Average to Average
Ratio of Investment Net Assets Net Assets
Expenses Income (Excluding (Excluding Portfolio
to Average to Average Waivers and Waivers and Turnover
Net Assets Net Assets Reimbursements) Reimbursements) Rate
- ---------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
- -------------
EQUITY FUND
- -------------
RETAIL
1995(1) 1.34% 1.23% 1.53% 1.04% 119%
INSTITUTIONAL
1995(1) 1.05% 1.44% 1.10% 1.44% 119%
PRIOR CLASS
1994 1.49% 0.75% 1.51% 0.73% 35%
1993 1.20% 0.94% 1.41% 0.73% 24%
1992 0.92% 1.47% 1.23% 1.17% 39%
1991 0.54% 2.30% 1.48% 1.36% 68%
1990(2) 0.65% 2.29% 1.59% 1.35% 43%
- ----------------------
SPECIAL EQUITY FUND
- ----------------------
RETAIL
1995(1) 0.27% 1.29% 2.24% (0.68)% 129%
INSTITUTIONAL
1995(1) 0.32% 1.14% 1.97% (0.51)% 129%
PRIOR CLASS
1994(3) 0.15% 1.06% 2.10% (0.89)% 39%
- ----------------------------
INTERNATIONAL EQUITY FUND
- ----------------------------
RETAIL
1995(4) 2.13% (.69)% 2.26% (.83)% 23%
INSTITUTIONAL
1995(4) 1.88% (0.10)% 1.88% (0.10)% 23%
- ---------------
BALANCED FUND
- ---------------
RETAIL
1995(5) 1.07% 3.37% 1.32% 3.12% 65%
INSTITUTIONAL
1995(6) 0.82% 3.66% 1.07% 3.41% 65%
- ------------
BOND FUND
- ------------
RETAIL
1995(1) 0.97% 6.02% 1.44% 5.55% 352%
INSTITUTIONAL
1995(1) 0.71% 6.09% 1.12% 5.68% 352%
PRIOR CLASS
1994 1.01% 5.07% 1.60% 4.48% 232%
1993 0.88% 5.16% 1.49% 4.55% 158%
1992 0.46% 6.78% 1.24% 6.01% 99%
1991 0.47% 7.71% 1.41% 6.78% 47%
1990(2) 0.68% 7.75% 1.62% 6.81% 23%
- -----------------------------
INTERMEDIATE INCOME FUND
- -----------------------------
RETAIL
1995(1) 0.93% 5.47% 1.51% 4.89% 260%
INSTITUTIONAL
1995(1) 0.64% 5.72% 1.15% 5.21% 260%
PRIOR CLASS
1994 0.90% 4.66% 1.64% 3.92% 170%
1993 0.78% 4.89% 1.50% 4.17% 90%
1992 0.47% 6.31% 1.24% 5.57% 53%
1991 0.40% 7.69% 1.34% 6.76% 33%
1990(2) 0.75% 7.42% 1.69% 6.48% 39%
- ----------------------------
SHORT-TERM INCOME FUND
- ----------------------------
RETAIL
1995(7) 0.88% 5.05% 1.33% 4.60% 40%
INSTITUTIONAL
1995(4) 0.63% 5.43% 1.08% 4.98% 40%
</TABLE>
37
<PAGE>
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Net
Realized and
Unrealized Net
Net Asset Gains Dividends Distributions Assets
Value Net (Losses) from Net from Net Asset End of
Beginning Investment on Investment Realized Value End Total Period
of Period Income Investments Income Capital Gains of Period Return* (000)
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
- --------------------------------------
PENNSYLVANIA TAX-FREE BOND FUND
- --------------------------------------
RETAIL
1995(1) $ 9.56 $ 0.47 $ 0.67 $(0.46) $ (0.01) $ 10.23 12.30% $ 820
INSTITUTIONAL
1995(1) 9.56 0.47 0.67 (0.46) (0.01) 10.23 12.30% 5,977
PRIOR CLASS
1994 10.48 0.46 (0.85) (0.46) (0.07) 9.56 (3.90)% 7,008
1993 9.77 0.45 0.70 (0.44) -- 10.48 11.94% 5,883
1992(8) 10.00 -- (0.23) -- -- 9.77 (2.28)% 3,405
- --------------------------
CASH MANAGEMENT FUND
- --------------------------
RETAIL
1995(1) $ 1.00 $ 0.05 $ -- $(0.05) $ -- $ 1.00 5.25% $ 3,358
INSTITUTIONAL
1995(1) 1.00 0.05 -- (0.05) -- 1.00 5.43% 234,520
PRIOR CLASS
1994 1.00 0.03 (0.03) -- -- 1.00 3.41% 140,545
1993 1.00 0.03 (0.03) -- -- 1.00 2.80% 215,223
1992 1.00 0.04 (0.04) -- -- 1.00 3.79% 113,096
1991 1.00 0.06 (0.06) -- -- 1.00 6.22% 151,166
1990(9) 1.00 0.07 (0.07) -- -- 1.00 7.59% 39,061
- ---------------------------------
U.S. TREASURY SECURITIES FUND
- ---------------------------------
RETAIL
1995(1) $ 1.00 $ 0.05 $ -- $(0.05) $ -- $ 1.00 5.16% $ 730
INSTITUTIONAL
1995(1) 1.00 0.05 -- (0.05) -- 1.00 5.27% 444,529
PRIOR CLASS
1994 1.00 0.03 (0.03) -- -- 1.00 3.07% 325,379
1993 1.00 0.03 (0.03) -- -- 1.00 2.57% 257,934
1992 1.00 0.04 (0.04) -- -- 1.00 3.64% 340,904
1991 1.00 0.06 (0.06) -- -- 1.00 5.96% 341,931
1990(9) 1.00 0.07 (0.07) -- -- 1.00 7.44% 106,771
- ----------------
TAX-FREE FUND
- ----------------
RETAIL
1995(1) $ 1.00 $ 0.03 $ -- $(0.03) $ -- $ 1.00 3.39% $ 1,282
INSTITUTIONAL
1995(1) 1.00 0.03 -- (0.03) -- 1.00 3.43% 60,509
PRIOR CLASS
1994 1.00 0.02 (0.02) -- -- 1.00 2.21% 54,904
1993 1.00 0.02 (0.02) -- -- 1.00 1.97% 46,239
1992 1.00 0.03 (0.03) -- -- 1.00 2.88% 46,295
1991 1.00 0.04 (0.04) -- -- 1.00 4.44% 45,647
1990(9) 1.00 0.05 (0.05) -- -- 1.00 5.31% 24,167
<CAPTION>
Ratio of
Ratio of of Expenses Income
Net to Average to Average
Ratio of Investment Net Assets Net Assets
Expenses Income (Excluding (Excluding Portfolio
to Average to Average Waivers and Waivers and Turnover
Net Assets Net Assets Reimbursements) Reimbursements) Rate
- ---------------------------------------------------------------------------------------------
<S> <C> <C> <C>
- --------------------------------------
PENNSYLVANIA TAX-FREE BOND FUND
- --------------------------------------
RETAIL
1995(1) 0.51% 4.64% 1.62% 3.53% 15%
INSTITUTIONAL
1995(1) 0.51% 4.64% 1.65% 3.50% 15%
PRIOR CLASS
1994 0.38% 4.61% 1.57% 3.42% 37%
1993 0.51% 4.35% 1.63% 3.23% 50%
1992(8) 2.67% 0.52% 3.41% (0.22)% 31%
- --------------------------
CASH MANAGEMENT FUND
- --------------------------
RETAIL
1995(1) 0.74% 5.16% 0.97% 4.93% N/A
INSTITUTIONAL
1995(1) 0.56% 5.32% 0.79% 5.09% N/A
PRIOR CLASS
1994 0.71% 3.32% 0.99% 3.05% N/A
1993 0.65% 2.75% 0.87% 2.53% N/A
1992 0.48% 3.76% 0.70% 3.55% N/A
1991 0.49% 5.84% 0.79% 5.54% N/A
1990(9) 0.42% 7.95% 0.75% 7.62% N/A
- ---------------------------------
U.S. TREASURY SECURITIES FUND
- ---------------------------------
RETAIL
1995(1) 0.73% 5.26% 0.79% 5.20% N/A
INSTITUTIONAL
1995(1) 0.62% 5.14% 0.78% 4.98% N/A
PRIOR CLASS
1994 0.72% 3.03% 0.97% 2.78% N/A
1993 0.66% 2.55% 0.87% 2.33% N/A
1992 0.46% 3.65% 0.69% 3.44% N/A
1991 0.51% 5.61% 0.79% 5.32% N/A
1990(9) 0.38% 7.73% 0.79% 7.32% N/A
- ----------------
TAX-FREE FUND
- ----------------
RETAIL
1995(1) 0.48% 3.35% 0.88% 2.95% N/A
INSTITUTIONAL
1995(1) 0.46% 3.37% 0.83% 3.00% N/A
PRIOR CLASS
1994 0.37% 2.22% 1.05% 1.53% N/A
1993 0.45% 1.95% 0.96% 1.44% N/A
1992 0.33% 2.83% 0.73% 2.45% N/A
1991 0.43% 4.37% 0.87% 3.93% N/A
1990(9) 0.31% 5.57% 0.91% 4.97% N/A
</TABLE>
* Total Return figures do not reflect applicable sales loads.
(1) On February 21, 1995 the shares of the Fund were redesignated as either
Retail or Institutional shares. For the year ended October 31, 1995, the
Financial Highlights' ratios of expenses, ratios of net investment income,
total return, and the per share investment activities and distributions are
presented on a basis whereby the Fund's net investment income, expenses, and
distributions for the period November 1, 1994 through February 20, 1995 were
allocated to each class of shares based upon the relative net assets of each
class of shares as of February 21, 1995 and the results combined therewith
the results of operations and distributions for each applicable class for
the period February 21, 1995 through October 31, 1995.
(2) Commenced operations on February 28, 1990. All ratios for the period have
been annualized.
(3) Commenced operations on March 15, 1994. All ratios for the period have been
annualized.
(4) Commenced operations on May 15, 1995. All ratios for the period have been
annualized.
(5) Commenced operations on June 29, 1995. All ratios for the period have been
annualized.
(6) Commenced operations on June 26, 1995. All ratios for the period have been
annualized.
(7) Commenced operations on May 17, 1995. All ratios for the period have been
annualized.
(8) Commenced operations on September 21, 1992. All ratios for the period have
been annualized.
(9) Commenced operations on November 27, 1989. All ratios for the period have
been annualized.
The accompanying notes are an integral part of the financial statements.
38
<PAGE>
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
The Conestoga Funds--October 31, 1995
1. Organization:
The Conestoga Family of Funds (the "Company") was organized as a Massachusetts
business trust under a Declaration of Trust dated August 1, 1989. The Company is
registered under the Investment Company Act of 1940, as amended, as an open-end
management investment company with eleven funds: the U.S. Treasury Securities
Fund, the Cash Management Fund, the Tax-Free Fund (collectively "the Money
Market Funds"), the Intermediate Income Fund, the Bond Fund, the Pennsylvania
Tax-Free Bond Fund, the Short-Term Income Fund (collectively "the Fixed Income
Funds"), the Equity Fund, the Special Equity Fund, the International Equity Fund
(collectively "the Equity Funds") and the Balanced Fund. The assets of each Fund
are segregated, and a shareholder's interest is limited to the Fund in which
shares are held. The Company currently offers two classes of shares in each
Fund: Institutional and Retail. Each Fund is authorized to issue an unlimited
number of shares of either class which are units of beneficial interest with a
par value of $0.001 per share. The Institutional and Retail Shares of each Fund
are subject to the same expenses except that Institutional Shares are not
subject to a distribution fee, and the Institutional Shares of the Fixed Income
and Equity Funds are not sold with a sales charge.
2. Significant Accounting Policies:
The following is a summary of significant accounting policies followed by the
Company. These policies are
in conformity with generally accepted accounting principles.
Security Valuation--Investments in equity securities which are traded on a
national securities exchange (or reported on the NASDAQ national market system)
are stated at the last quoted sales price--if readily available for such equity
securities--on each business day. If there is no such reported sale, these
securities, and unlisted securities for which market quotations are readily
available, are valued at the most recently quoted bid price.
Debt obligations exceeding 60 days to maturity for which market quotations
are readily available are valued at the most recently quoted bid price. Debt
obligations with 60 days or less until maturity may be valued either at the most
recently quoted bid price or at their amortized cost.
Investment securities held by the Money Market Funds are stated at
amortized cost which approximates market value. Under the amortized cost method,
any discount or premium is amortized ratably to the maturity of the security and
is included in interest income.
Foreign securities in the International Equity Fund are valued based upon
quotations from the primary market in which they are traded.
Federal Income Taxes--It is each Fund's intention to qualify as a regulated
investment company by complying with the appropriate provisions of the Internal
Revenue Code of 1986, as amended. Accordingly, no provisions for Federal income
taxes are required in the accompanying financial statements.
Security Transactions and Investment Income--
Security transactions are accounted for on the trade date of the security
purchase or sale. Dividend income is recognized on ex-dividend date, and
interest income is recognized on an accrual basis and includes the pro rata
amortization of premium or accretion of discount. The cost used in determining
net realized capital gains and losses on the sale of securities are those of the
specific securities sold, adjusted for the accretion and amortization of
purchase discounts and premiums during the applicable holding period. Purchase
discounts and premiums on securities held by the Equity and Fixed Income Funds
are accreted and amortized to maturity using the scientific amortization method,
which approximates the effective interest method.
Repurchase Agreements--Securities pledged as collateral for repurchase
agreements are held at a custodian bank in the name of the Fund until the
repurchase agreements mature. Provisions of the repurchase agreements ensure
that the market value of the collateral, including accrued interest thereon, is
sufficient in the event of default of the counterparty. If the counterparty
defaults and the value of the collateral declines or if the counterparty enters
an insolvency proceeding, realization of the collateral by the Funds may be
delayed or limited.
Net Asset Value Per Share--The net asset value per share of each class of
each Fund is calculated on each business day. In general, it is computed by
dividing the assets of each class of each Fund, less its liabilities, by the
number of outstanding shares of the respective class of the Fund. The maximum
offering price per share for Retail Shares of the Equity and Fixed Income Funds
is
39
<PAGE>
- --------------------------------------------------------------------------------
equal to the net asset value per share plus a sales load of 2.00%. The offering
price per share for the Institutional Shares of the Equity and Fixed Income
Funds is the net asset value per share. The offering price for Institutional and
Retail Shares of the Money Market Funds is the amortized cost per share, which
approximates net asset value per share.
Foreign Currency Translation--The books and records of the International
Equity Fund are maintained in U.S. dollars on the following basis:
(I) market value of investment securities, assets and liabilities at the
current rate of exchange; and
(II) purchases and sales of investment securities, income and expenses at
the relevant rates of exchange prevailing on the respective dates of
such transactions.
The International Equity Fund does not isolate that portion of gains and
losses on investments in equity securities which is due to changes in the
foreign exchange rates from that which is due to changes in market prices of
equity securities.
The International Equity Fund reports certain foreign currency related
transactions as components of realized gains for financial reporting purposes,
whereas such components are treated as ordinary income for Federal income tax
purposes.
Forward Foreign Currency Contracts--The International Equity Fund enters
into forward foreign currency contracts as hedges against either specific
transactions or Fund positions. All commitments are "marked-to-market" daily at
the applicable foreign exchange rate and any resulting unrealized gains or
losses are recorded currently. The International Equity Fund realizes gains or
losses at the time the forward contracts are extinguished. Unrealized gains or
losses on outstanding positions in forward foreign currency contracts held at
the close of the year will be recognized as ordinary income or loss for Federal
income tax purposes.
Maturity Dates--Certain variable rate and floating rate securities are
subject to "maturity shortening" devices such as put or demand features. Under
Rule 2a-7 of the Investment Company Act of 1940 (the "1940 Act"), as amended,
these securities are deemed to have maturities shorter than the ultimate
maturity dates. Accordingly, the maturity dates reflected in the Statement of
Net Assets are the shorter of the effective demand/put date or the ultimate
maturity date.
Classes--Class-specific expenses are borne by that class. Other expenses,
income, and realized and unrealized gains and losses are allocated to their
respective classes on the basis of relative daily net assets.
Other--Distributions from net investment income for the Equity and Fixed
Income Funds are declared and paid to shareholders on a periodic basis.
Distributions from net investment income for the Money Market Funds are declared
daily and paid to shareholders monthly. Any net realized capital gains are
distributed to shareholders at least annually.
3. Administration and Distribution Agreements:
The Company and SEI Financial Management Corporation (the "Administrator") are
parties to an administration agreement (the "Administration Agreement") dated
May 1, 1995. Under the terms of the Administration Agreement the Administrator
is entitled to a fee calculated daily and paid monthly at an annual rate of .17%
of the average daily net assets of each Fund. Prior to May 1, 1995, The Winsbury
Company ("Winsbury") served as the Administrator to the Company and was entitled
to a fee calculated daily and paid monthly at the annual rate of .20% of the
average daily net assets of each Fund.
The Company has adopted a distribution and services plan (the "Distribution
Plan") applicable to the Retail Shares pursuant to rule 12b-1 under the 1940
Act. As provided in the Distribution Plan, each Fund is authorized to pay the
distributor a fee for distribution services in an amount not to exceed on an
annual basis .40% of the average daily net assets of the Retail Shares of the
Funds. The Company and SEI Financial Services Company (the "Distributor"), a
wholly-owned subsidiary of SEI Corporation and a registered broker-dealer, are
parties to a distribution agreement (the "Distribution Agreement") dated May 1,
1995. Under the terms of the Distribution Agreement, the Distributor receives no
fees for its Institutional Shares distribution services, and is entitled to
receive fees as set forth in the Distribution Plan for services performed and
expenses assumed under the Distribution Agreement as to the Retail Shares of the
Funds. Prior to May 1, 1995 Winsbury served as Distributor to the Company and
was entitled to receive commissions earned on sales of shares of the Equity and
40
<PAGE>
NOTES TO FINANCIAL STATEMENTS -- continued
- --------------------------------------------------------------------------------
The Conestoga Funds--October 31, 1995
Fixed Income Funds. For the six months ended April 30, 1995, Winsbury received
$7,736 from commissions earned on sales of shares of the Equity and Fixed Income
Funds, of which $261 was reallowed to Meridian Securities Inc., an affiliate of
Meridian Bancorp, and an investment dealer of the Funds.
4. Investment Advisory Agreements:
Investment advisory services are provided to the Company by Meridian Investment
Company (the "Investment Advisor"), a subsidiary of Meridian Bancorp, Inc. Under
the terms of the investment advisory agreements, the Investment Advisor is
entitled to receive a fee from the Fund, computed daily and paid monthly, at an
annual rate equal to the lesser of (a) (i) .40% of the average daily net assets
of each of the Cash Management, Tax-Free and U.S. Treasury Securities Funds,
(ii) .74% of the average daily net assets of each of the Equity, Bond,
Intermediate Income, Pennsylvania Tax-Free Bond, and Short-Term Income Funds,
(iii) .75% of the average daily net assets of the Balanced Fund, (iv) 1.00% of
the average daily net assets of the International Equity Fund, and (v) 1.50% of
the average daily net assets of the Special Equity Fund, or (b) such fee as
agreed upon in writing by a Fund and the Investment Advisor in advance of the
period to which the fee relates.
Pursuant to the Company's investment advisory agreement for the
International Equity Fund, the Investment Advisor has retained Marvin & Palmer
Associates, Inc. ("Marvin & Palmer") as Sub-Advisor to such Fund pursuant to a
Sub-Investment Advisory Agreement. For its services under such Sub-Investment
Advisory Agreement, Marvin & Palmer is paid a monthly fee by Meridian calculated
on an annual basis equal to .75% of the first $100 million of the International
Equity Fund's average daily net assets, .70% of the second $100 million of the
International Equity Fund's average daily net assets, .65% of the third $100
million of the International Equity Fund's average daily net assets, and .60% of
the International Equity Fund's average daily net assets in excess of $300
million.
5. Organizational Costs and
Transactions with Affiliates:
Organizational costs have been capitalized by the Company and are being, or
were, amortized on a straight line basis over a maximum of sixty months
following commencement of operations. In the event any of the initial shares of
the Company are redeemed by any holder thereof during the period that the
Company is amortizing its organizational costs, the redemption proceeds payable
to the holder thereof by the Company will be reduced by the unamortized
organizational cost in the same ratio as the number of initial shares being
redeemed bears to the number of initial shares outstanding at the time of
redemption.
Certain officers of the Company are also officers of the Administrator
and/or SEI Financial Services Company (the "Distributor"). Such officers are
paid no fees by the Company for serving as officers of the Company.
6. Investment Transactions:
The cost of security purchases and the proceeds from security sales, excluding
short-term investments, for the year ended October 31, 1995 were as follows:
<TABLE>
<CAPTION>
U.S. Govt.
Purchases Sales Purchases U.S. Govt. Sales
(000) (000) (000) (000)
------- ------- ------- ----------
<S> <C> <C> <C> <C>
Equity $ 228,276 $229,329 -- --
Special Equity 38,281 39,567 -- --
International Equity 14,651 2,343 -- --
Balanced 52,677 20,147 -- --
Bond 255,196 251,397 $ 163,069 $182,327
Intermediate Income 140,542 138,144 101,752 100,103
Short-Term Income 20,442 7,585 16,637 5,479
Pennsylvania
Tax-Free Bond 897 1,865 -- --
</TABLE>
At October 31, 1995, the total cost of securities and net realized gains or
losses on securities sold for Federal income tax purposes was not materially
different from amounts reported for financial reporting purposes. The aggregate
gross unrealized appreciation and depreciation for securities held by the Equity
41
<PAGE>
- --------------------------------------------------------------------------------
and Fixed Income Funds at October 31, 1995 were as follows:
<TABLE>
<CAPTION>
Net
Unrealized
Appreciated Depreciated Appreciation--
Securities Securities (Depreciation)
(000) (000) (000)
------- ------- ---------
<S> <C> <C> <C>
Equity $28,816 $12,474 $16,342
Special Equity 5,315 4,771 544
International Equity 1,081 374 707
Balanced 1,218 359 859
Bond 2,765 192 2,573
Intermediate Income 1,472 73 1,399
Short-Term Income 94 2 92
Pennsylvania Tax-Free Bond 89 77 12
</TABLE>
At October 31, 1995 the following Funds had available realized capital
losses to offset future net capital gains in the amounts shown as follows:
<TABLE>
<CAPTION>
Capital Loss Carryover
Fund October 31, 1995 Expiring 2002 Expiring 2003
- --- -------------- -------- --------
<S> <C> <C> <C>
International Equity $ 21,098 $ -- $21,098
Pennsylvania
Tax-Free Bond 68,029 -- 68,029
Cash Management 217,837 217,837 --
Tax-Free 3,824 -- 3,824
</TABLE>
The Bond Fund utilized its entire capital loss carryforward balance of
$1,283,474 which was carried over from the previous year.
The Cash Management Fund utilized $2,310 of its capital loss carryforward
balance during the year.
The Intermediate Income Fund utilized its entire capital loss carryforward
balance of $383,000 which was carried over from the previous year.
7. Forward Foreign Currency Contracts:
The International Equity Fund may enter into forward foreign currency exchange
contracts as hedges against fund positions. Such contracts, which may protect
the value of the Fund's investment securities against a decline in the value of
currency, do not eliminate fluctuations in the underlying prices of the
securities. They simply establish an exchange rate at a future date. Also,
although such contracts tend to minimize the risk of loss due to a decline in
the value of a hedged currency, at the same time they tend to limit any
potential gain that might be realized should the value of such foreign currency
increase.
The following forward foreign currency contracts
in the International Equity Fund were outstanding at
October 31, 1995:
<TABLE>
<CAPTION>
Net Unrealized
Contracts to In Exchange Appreciation/
Settlement Deliver FX For $ Depreciation
Date Currency (000) (000) (000)
------- ----- ------- ------- ---------
<S> <C> <C> <C> <C> <C>
Foreign Currency 11/30/95 UK 450 $ 709 $ --
Sales 11/30/95 JY 191,660 1,930 46
11/02/95 JY 3,209 31 --
11/02/95 SK 139 21 --
----------- ---
$ 2,691 $ 46
----------- ---
Foreign Currency 11/02/95 JY 2,927 $ 29 $ --
Purchases 11/02/95 JY 2,237 22 --
----------- ---
$ 51 $ --
----------- ---
$ 46
==========
</TABLE>
Currency Legend
JY Japanese Yen
SK Swedish Krona
UK British Sterling Pound
42
<PAGE>
NOTES TO FINANCIAL STATEMENTS -- continued
- --------------------------------------------------------------------------------
The Conestoga Funds--October 31, 1995
8. Share Transactions:
<TABLE>
<CAPTION>
Special International Intermediate
Equity Equity Equity Balanced Bond Income
Fund Fund Fund Fund Fund Fund
---- ---- ------- ----- ----- -------
<S> <C> <C> <C> <C> <C> <C>
PERIOD FROM
NOVEMBER 1, 1994
THROUGH
FEBRUARY 21, 1995:
Exchange out to
Retail Class (401) (52) -- -- (138) (136)
Exchange out to
Institutional Class (3,007) (1,099) -- -- (2,935) (1,478)
Shares issued 331 73 -- -- 938 151
Shares issued in
lieu of cash
distributions 180 13 -- -- 25 18
Shares repurchased (446) (9) -- -- (273) (625)
------ ------ ----- ----- ------ ------
Net Decrease (3,343) (1,074) -- -- (2,383) (2,070)
====== ====== ===== ===== ====== ======
PERIOD FROM
FEBRUARY 22, 1995
THROUGH
OCTOBER 31, 1995:
RETAIL CLASS:
Exchange in from
previous class 401 52 -- -- 138 136
Shares issued 41 17 1 7 15 15
Shares issued in
lieu of cash
distributions 3 -- -- -- 5 4
Shares repurchased (59) (5) -- -- (28) (40)
------ ------ ----- ----- ------ ------
Net Increase 386 64 1 7 130 115
====== ====== ===== ===== ====== ======
INSTITUTIONAL CLASS:
Exchange in from
previous class 3,007 1,099 -- -- 2,935 1,478
Shares issued 22,654 4,786 1,291 3,945 18,682 13,274
Shares issued in
lieu of cash
distributions 151 28 -- 37 491 338
Shares repurchased (3,652) (886) (76) (275) (3,686) (2,180)
------ ------ ----- ----- ------ ------
Increase in net
assets derived from
Institutional
transactions 22,160 5,027 1,215 3,707 18,422 12,910
====== ====== ===== ===== ====== ======
</TABLE>
<TABLE>
<CAPTION>
Pennsylvania
Short-Term Tax-Free Cash U.S. Treasury
Income Bond Management Securities Tax-Free
Fund Fund Fund Fund Fund
------ -------- ------- -------- ------
<S> <C> <C> <C> <C> <C>
PERIOD FROM
NOVEMBER 1, 1994
THROUGH
FEBRUARY 21, 1995:
Exchange out to
Retail Class -- (69) (4,188) (618) (2,456)
Exchange out to
Institutional
Class -- (543) (207,034) (311,574) (67,719)
Shares issued -- 49 229,934 304,528 113,629
Shares issued in lieu
of cash distributions -- 4 31 10 86
Shares repurchased -- (174) (159,426) (317,660) (98,423)
--
---- -------- -------- -------
Net Decrease -- (733) (140,683) (325,314) (54,883)
== ==== ======== ======== =======
PERIOD FROM
FEBRUARY 22, 1995
THROUGH OCTOBER 31,
1995:
RETAIL CLASS:
Exchange in from
previous class -- 69 4,188 618 2,456
Shares issued 1 16 1,981 130,272 332
Shares issued in lieu
of cash distributions -- 2 126 22 42
Shares repurchased -- (7) (2,934) (130,182) (1,548)
--
---- -------- -------- -------
Net Increase 1 80 3,361 730 1,282
== ==== ======== ======== =======
INSTITUTIONAL CLASS:
Exchange in from
previous class -- 543 207,034 311,574 67,719
Shares issued 4,689 185 457,561 1,003,029 201,868
Shares issued in lieu
of cash distributions 91 7 479 683 91
Shares repurchased (1,192) (151) (430,420) (870,863) (209,186)
--
---- -------- -------- -------
Net Increase 3,588 584 234,654 444,423 60,492
== ==== ======== ======== =======
</TABLE>
43
<PAGE>
- --------------------------------------------------------------------------------
9. Shareholder Voting Results:
A special meeting of shareholders was held on January 9, 1995 (reconvened
January 12, 1995, January 13, 1995 and February 10, 1995) for the Company to
vote on the following proposals (i) the election of a Board of seven (7)
trustees (Dominic S. Genuardi, Sr., Steven I. Gross, J. David Huber, Robert C.
Kingston, Dale E. Smith, Thomas J. Taylor and William J. Tomko); (ii) the
ratification of the selection of Coopers & Lybrand, L.L.P. as independent
accountants for the Company for the fiscal year ending October 31, 1995; (iii)
the approval of the adoption of a new Distribution and Services Plan with
respect to the Retail Shares of each of the Company's existing Funds (the U.S.
Treasury Securities Fund, the Cash Management Fund, the Tax-Free Fund, the
Intermediate Income Fund, the Bond Fund, the Equity Fund, the Pennsylvania
Tax-Free Bond Fund and the Special Equity Fund), pursuant to Rule 12b-1 under
the Investment Company Act of 1940; (iv) with respect to the Bond Fund only, the
approval of a change in the fundamental investment objective of the Fund; and
(v) with respect to the Intermediate Income Fund only, the approval of a change
in the fundamental investment objective of the Fund. The following were the
results of the vote (Unaudited):
MEETING OF SHAREHOLDERS
JANUARY 9, 1995
<TABLE>
<CAPTION>
Proposal 3 Cash Management Tax-Free Special Equity
- ---------------------- --------------- ---------- --------------
<S> <C> <C> <C>
For................... 81,862,297 30,681,945 934,540
Against............... 3,217,557 634,459 1,368
Abstentions........... 8,118,366 1,444,175 none
</TABLE>
RECONVENED
JANUARY 13, 1995
<TABLE>
<CAPTION>
Proposal 1 In Favor Withheld
- ------------------------ ----------- -----------
<S> <C> <C>
Dominic S. Genuardi,
Sr..................... 347,299,332 23,395,703
Steven I. Gross......... 347,159,952 23,535,083
J. David Huber.......... 347,283,622 23,411,413
Robert C. Kingston...... 346,762,700 23,932,336
Dale E. Smith........... 347,304,576 23,390,459
Thomas J. Taylor........ 347,283,622 23,411,413
William J. Tomko........ 347,283,622 23,411,413
</TABLE>
<TABLE>
<CAPTION>
Proposal 2
- -------------------------
<S> <C>
COOPERS & LYBRAND, L.L.P.
For...................... 330,010,191
Against.................. 16,943,555
Abstentions.............. 23,741,287
</TABLE>
<TABLE>
<CAPTION>
Proposal 3 Intermediate Income Bond Equity PA Tax-Free
- ---------------------- ------------------- --------- -------------- -----------
<S> <C> <C> <C> <C>
For................... 1,107,049 1,110,841 1,343,747 369,400
Against............... 5,266 54,399 366,865 10,079
Abstentions........... 9,098 39,677 102,000 47,478
</TABLE>
<TABLE>
<CAPTION>
Proposal 4 Bond
- -------------------------- ---------
<S> <C>
For....................... 1,138,236
Against................... 29,140
Abstentions............... 37,540
</TABLE>
<TABLE>
<CAPTION>
Proposal 5 Intermediate Income
- -------------------- -------------------
<S> <C>
For................. 1,107,122
Against............. 5,722
Abstentions......... 8,568
</TABLE>
RECONVENED
FEBRUARY 10, 1995
<TABLE>
<CAPTION>
U.S. Treasury
Proposal 3 Securities
- ----------------- ------------------------
<S> <C>
For.............. 178,314,048
Against.......... 3,692,885
Abstentions...... 50,897,923
</TABLE>
44
<PAGE>
NOTICE TO SHAREHOLDERS OF THE CONESTOGA FUNDS
For shareholders that do not have an October 31, 1995 taxable year end, this
notice is for informational purposes only. For shareholders with an October 31,
1995 taxable year end, please consult your tax advisor as to the pertinence of
this notice.
For the fiscal year ended October 31, 1995 the portfolios of The Conestoga Funds
are designating long term capital gains and qualifying dividend income with
regard to distributions paid during the year as follows:
<TABLE>
<CAPTION>
(A) (B)
LONG TERM ORDINARY
CAPITAL GAINS INCOME TOTAL
DISTRIBUTIONS DISTRIBUTIONS DISTRIBUTIONS
FUND (TAX BASIS) (TAX BASIS) (TAX BASIS)
- ---------------------------------- ------------- ------------- -------------
<S> <C> <C> <C>
Equity 37% 63% 100%
Special Equity 0% 100% 100%
International Equity 0% 100% 100%
Balanced 0% 100% 100%
Bond 0% 100% 100%
Intermediate Income 0% 100% 100%
Short-Term Income 0% 100% 100%
Pennsylvania Tax-Free Bond 3% 97% 100%
Cash Management 0% 100% 100%
U.S. Treasury Securities 0% 100% 100%
Tax-Free 0% 100% 100%
</TABLE>
<TABLE>
<CAPTION>
(C) (D) (E)
QUALIFYING TAX EXEMPT FOREIGN
FUND DIVIDENDS (1) INTEREST TAX CREDIT
- ---------------------------------- ------------- ------------- -------------
<S> <C> <C> <C>
Equity 53% 0% 0%
Special Equity 49% 0% 0%
International Equity 0% 0% 0%
Balanced 10% 0% 0%
Bond N/A 0% 0%
Intermediate Income N/A 0% 0%
Short-Term Income N/A 0% 0%
Pennsylvania Tax-Free Bond N/A 100% 0%
Cash Management N/A 0% 0%
U.S. Treasury Securities N/A 0% 0%
Tax-Free N/A 97% 0%
</TABLE>
(1) Qualifying dividends represent dividends which qualify for the corporate
dividends received deduction.
* Items (A) and (B) are based on the percentage of each portfolio's total
distribution.
** Items (C) and (D) are based on the percentage of gross income of each
portfolio.
45
<PAGE>
