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CORESTATES LOGO
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PAINTING (LAKE SCENERY)
1996
ANNUAL REPORT
TO OUR
SHAREHOLDERS
YEAR ENDING JUNE 30, 1996
COREFUNDS...INVESTING OUR EXPERIENCE IN YOUR FUTURE.
<PAGE>
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CORESTATES LOGO
FUND TRADING
FUND PORTFOLIOS BY ASSET CLASS SYMBOL
(Y SHARES)
Equity Funds
[] Equity Index VEIFX
[] Equity CVEAX
[] Growth Equity CRGEX
[] Special Equity CSEQX
[] International Growth CFIGX
Balanced Funds
[] Balanced CBAAX
Fixed Income Funds
[] Short Term Income COSTX
[] Short-Intermediate Bond CFBDX
[] Government Income N/A
[] Bond CONIX
[] Global Bond CGBIX
Tax-Exempt Income Funds
[] Intermediate Municipal Bond N/A
[] Pennsylvania Municipal Bond N/A
[] New Jersey Municipal Bond N/A
Money Market Funds
[] Treasury Reserve CRTXX
[] Cash Reserve CRCXX
[] Tax-Free Reserve CRXXX
Table of Contents
Choosing the Right Fund
Inside Cover
Message to Our Shareholders 1
CSIA Management Profile 2
Fund Descriptions 3
Investment Advisers' Review 6
Understanding Performance
and Terms 9
Managers' Discussion
of Fund Performance 12
Auditors' Report 36
Financial Statements 37
Shareholder Services
FOR MORE INFORMATION ON OPENING A NEW ACCOUNT, MAKING CHANGES TO EXISTING
ACCOUNTS, PURCHASING, EXCHANGING OR REDEEMING SHARES, OR OTHER INVESTOR
SERVICES, CALL COREFUND AT 1-800-355-CORE (2673).
(LIFT FLAP TO VIEW INSIDE)
<PAGE>
CHOOSING
THE
RIGHT FUND
<TABLE>
<CAPTION>
MUTUAL FUND CATEGORIES STABILITY/RETURN SPECTRUM COREFUND PORTFOLIOS
<S> <C> <C>
STABILITY Using money market funds, this category STABILITY [] Treasury Reserve
seeks to provide greater safety and stability of principal [] Cash Reserve
while providing current income. Funds are built around [] Tax-Free Reserve
high-quality, short-term securities with remaining
maturities of 13 months or less.
INCOME This category includes intermediate- and INCOME [] Short Term Income
long-term taxable or tax-exempt bond funds. [] Short-Intermediate Bond
Depending on the types of bonds in which the funds [] Government Income
invest, these funds seek to provide a moderate to high [] Bond
level of current income, while aiming to preserve an [] Intermediate Municipal Bond
investor's original investment value. [] Pennsylvania Municipal Bond
[] New Jersey Municipal Bond
INTERNATIONAL INCOME Global bond funds invest in [] Global Bond
both U.S. and foreign debt securities. These funds seek
capital appreciation and current income. This category
offers potentially higher returns than domestic bonds,
but with less stability of principal.
GROWTH This category includes stock or balanced funds GROWTH [] Balanced
designed to pursue long-term growth. Balanced funds can [] Equity Index
invest in diversified portfolios of bonds and money market [] Equity
instruments, as well as stocks. Although stocks historically [] Growth Equity
have offered the greatest growth potential, they have [] Special Equity
fluctuated more in price from day to day.
INTERNATIONAL GROWTH This category includes international [] International Growth
stock funds that invest in common stocks and other equity
securities of companies located outside the United States.
Compared with domestic stocks, these funds offer potentially
higher returns, but carry special risks.
</TABLE>
FINDING THE RIGHT MIX OF RISK AND REWARD.
EACH INVESTOR HAS A UNIQUE NOTION OF WHAT THE"RIGHT" MIX OF RISK AND
REWARD SHOULD BE. YOU MAY, FOR EXAMPLE, BE AN INVESTOR WHO SEEKS TO MAINTAIN THE
HIGHEST POSSIBLE DEGREE OF STABILITY IN YOUR PORTFOLIO, AND THEREFORE FAVOR
MONEY MARKET SECURITIES. OR, YOU MAY BE AT THE OPPOSITE END OF THE SPECTRUM --
SOMEONE WHO IS WILLING TO ACCEPT AND TOLERATE HIGHER DEGREES OF RISK IN EXCHANGE
FOR THE POTENTIAL OF HIGHER RETURNS OFFERED BY STOCKS. BECAUSE HIGHER RETURNS
GENERALLY MEAN GREATER PRICE FLUCTUATIONS, INVESTMENT DECISIONS WILL ALWAYS
REVOLVE AROUND THIS TRADEOFF.
TO HELP YOU ALIGN YOUR PORTFOLIO'S PARTICULAR BLEND OF STABILITY AND
RETURN WITH YOUR INVESTMENT PREFERENCES, COREFUND STRIVES TO OFFER AN EVENLY
BALANCED ARRAY OF INVESTMENT OPTIONS.
AS ILLUSTRATED AT LEFT, THE COREFUND FAMILY OF FUNDS FALLS INTO
DISTINCT CATEGORIES THAT MATCH UP WITH THE VARIOUS STAGES OF THE STABILITY/
RETURN SPECTRUM. USING THIS GUIDE, YOU CAN FASHION A WELL-ROUNDED, DIVERSIFIED
PORTFOLIO THAT HELPS YOU ACHIEVE YOUR INDIVIDUAL INVESTMENT GOALS WHILE
MAINTAINING A COMFORTABLE LEVEL OF RISK. IN THIS WAY, COREFUNDS' EXPERTISE AND
EXPERIENCE CAN BEST BE USED TO SHAPE YOUR INVESTMENT FUTURE.
<PAGE>
MESSAGE
TO OUR
SHAREHOLDERS
[] COREFUND
A GROWING FAMILY The past year brought significant and exciting change to the
CoreFund Family of Mutual Funds. Foremost among these changes was the merger on
April 15, 1996, of Conestoga Fund holdings into the CoreFund Family. Through the
addition of the Conestoga Funds, we now offer a broader complex of 17 funds to
our investors. Beginning on page 3 of this report, you will find complete
descriptions of all of the funds in our newly expanded family.
We warmly welcome the many new shareholders who have joined us from
Conestoga. Also, we welcome the Conestoga Fund managers who have joined
CoreFunds through the merger. These new specialists add more strength to our
greatest asset: our talented and experienced investment management team.
EXPANDING SERVICES Beyond the merger with Conestoga, we continue to pursue many
other ways to expand and improve our services, to both existing and prospective
shareholders. Our voice-response unit is continually being enhanced, providing
all investors with easy access to information about any of our funds or
services. (To have your questions answered, call 800-355-CORE from 8:00 AM to
8:00 PM, Monday through Friday).
We also continue to refine our prospectus and statement materials in
order to make sure we communicate as clearly as possible with everyone who has
interest, or investments, in the CoreFund Family of Mutual Funds.
CONTINUING OPPORTUNITY In the midst of this significant change, the
investment climate appears to have calmed after a robust 1995. In this less
turbulent environment, investors have the opportunity to pursue their individual
investment strategies with less concern about short-term disruptions. Returns
from the CoreFund Family of Mutual Funds continue to remain positive, relative
to the funds' individual benchmarks. We look forward to working with you to help
you continue to reach your investment goals, through the rest of 1996 and
beyond.
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PHOTOGRAPH OF EMIL J. MIKITY, CHAIRMAN, COREFUNDS, INC.
/S/EMIL J. MIKITY
EMIL J. MIKITY
CHAIRMAN
1
<PAGE>
FUND
DESCRIPTIONS
JUNE 30, 1996
MORE ABOUT THE INVESTMENT ADVISER TO THE COREFUNDS
CoreFunds, Inc. (CoreFunds) is a family of 20 mutual funds* managed by
CoreStates Investment Advisers, Inc. (CSIA), an affiliate of CoreStates
Financial Corp. CoreStates is one of the nation's largest and most respected
banking institutions, with a commitment to exceptional service dating back
nearly two centuries. As the investment adviser to CoreFunds, CSIA is dedicated
to providing professional investment management to CoreFund investors.
For years, CSIA has served the financial needs of institutions,
corporations, municipalities, and individual investors. And today, it manages
more than $16 billion in assets, including approximately $4 billion in the
CoreFund Family of Mutual Funds.
Each fund is guided by a professional manager who is responsible for
maintaining the fund's investment objectives through research, analysis, and
day-to-day investment decisions.
A full range of quality funds, professional management, clear
communication, and convenience are all essential parts of the experience that
CoreFunds can invest in your future.
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CORESTATES LOGO
CORESTATES
INVESTMENT ADVISERS
THE RIGHT CHOICES FOR A WELL-ROUNDED INVESTMENT PROGRAM
The CoreFund Family offers a diverse range of high-quality mutual fund
investment options designed to help you reach your financial goals.
These include: the capital appreciation potential of equity and
balanced funds; the income potential of fixed-income funds; the tax advantages
of municipal bond funds; the stability of money market funds; and the expanded
reach and potential of international funds. By allowing free exchange among all
funds, CoreFunds make it easy for you to adapt your individual investment
program to your changing needs.
*INCLUDES THREE FIDUCIARY FUNDS, WHICH ARE PRESENTED IN SEPARATE REPORTS.
2
<PAGE>
[] COREFUND FAMILY OF MUTUAL FUNDS
[] EQUITY (STOCK) FUNDS
INVESTING PRIMARILY IN COMMON STOCKS. THESE FUNDS SEEK MAXIMUM LONG-TERM GAINS
THROUGH CAPITAL APPRECIATION.
<TABLE>
<CAPTION>
OBJECTIVE FOR AN INVESTOR WHO...
<S> <C> <C>
[] EQUITY Seeks to achieve price and yield ...is investing for the long term and wants to know that invest-
INDEX FUND performance similar to the S&P 500 ment results will be substantially in line with the performance of
Composite Index. the stock market as a whole.
[] EQUITY Seeks growth of capital by investing ...seeks growth of capital over the long term and is willing to take
FUND primarily in a diversified portfolio of higher risk for potentially higher returns than from bond funds
common stocks. or money market funds.
[] GROWTH Seeks growth of capital and an ...seeks capitalappreciation over the long term and is willing to
EQUITY FUND increasing flow of dividends from take higher risk for potentially higher returns than from bond or
a diversified portfolio of common money market funds.
stocks.
[] SPECIAL Seeks capital growth by investing ...seeks growth of capital over the long term and is willing to take
EQUITY FUND principally in a diversified portfolio higher risk and experiencegreater volatility for potentially higher
of common stocks, using a quanti returns.
tative approach.
[] INTERNATIONAL Seeks long-term growth of capital ...seeks growth of capital over the long term and is willing to
GROWTH FUND by investing in a portfolio of com- assume the higher risks inherent in foreign investing in exchange
mon stocks diversified by country for potentially higher returns.
and industry.
</TABLE>
[] BALANCED FUND
INVESTING IN BOTH COMMON STOCKS AND FIXED INCOME. THIS FUND SEEKS TO PROVIDE
TOTAL RETURN WHILE PRESERVING CAPITAL.
<TABLE>
<CAPTION>
OBJECTIVE FOR AN INVESTOR WHO...
<S> <C> <C>
[] BALANCED Seeks to provide total return while ...wants to participate in a diversified portfolio program that is
FUND preserving capital. continuously and professionally managed and is willing to take
higher risk for potentially higher returns than from bond or
money market funds.
</TABLE>
3
<PAGE>
FUND
DESCRIPTIONS
(CONTINUED)
JUNE 30, 1996
[] FIXED INCOME (BOND) FUNDS
INVESTING PRIMARILY IN INTEREST-PAYING SECURITIES ISSUED BY THE U.S. GOVERNMENT
AND ITS AGENCIES AS WELL AS CORPORATE BONDS AND COMMERCIAL PAPER. THESE FUNDS
SEEK TO PROVIDE A REGULAR STREAM OF CURRENT INCOME.
<TABLE>
<CAPTION>
OBJECTIVE FOR AN INVESTOR WHO...
<S> <C> <C>
[] SHORT TERM Seeks consistent current income ...seeks a higher yield than can be expected from either cash
INCOME FUND and relative stability of principal by management funds or other short-term investments. This fund
investing primarily in a diversified will have less volatility than most longer-term bond funds.
portfolio of investment-grade debt
securities with expected or remaining
maturities of three years or less.
[] SHORT- Seeks consistent current income by ...seeks a higher yield than can be expected from other short-term
INTERMEDIATE investing principally in a diversified investments but would like to avoid the wide swings normally
BOND FUND portfolio of debt securities with an attributable to long-term bond funds.
expected average weighted maturity
of two to five years.
[] GOVERNMENT Seeks to provide current income ...wants investment performance and can tolerate the associated
INCOME FUND while preserving principal value and risk from an actively managed portfolio of taxable fixed-income
maintaining liquidity. securities, and wants no credit risk.
[] BOND Seeks to maximize long-term ...wants investment performance and can tolerate the associated
FUND total return by investing principally risk from an actively managed portfolio of taxable fixed-income
in a diversified portfolio of debt securities.
securities.
[] GLOBAL Seeks to provide capital apprecia- ...seeks capital appreciation and current income over the long
BOND FUND tion and current income through term, is willing to assume the higher risks inherent in foreign
investment in fixed-income investing in exchange for potentially higher returns, and seeks
securities of the United States and the benefits of international diversification.
foreign issuers.
</TABLE>
4
<PAGE>
[] COREFUND FAMILY OF MUTUAL FUNDS
[] TAX-EXEMPT INCOME FUNDS
INVESTING IN GENERAL OBLIGATION BONDS, REVENUE BONDS, AND MUNICIPAL NOTES, ALL
OF WHICH FINANCE PUBLIC WORKS AND SERVICES. THESE FUNDS SEEK TO PROVIDE INCOME
THAT IS GENERALLY EXEMPT FROM FEDERAL INCOME TAX AND IN SOME CASES FROM STATE
AND LOCAL TAXES.
<TABLE>
<CAPTION>
OBJECTIVE FOR AN INVESTOR WHO...
<S> <C> <C>
[] INTERMEDIATE Seeks a high level of income exempt ...wants a conservative investment and seeks after-tax yields while
MUNICIPAL from federal income tax consistent protecting principal.
BOND FUND with the preservation of capital.
[] PENNSYLVANIA Seeks a high level of current income ...seeks a moderate rate of tax-free income with less price
MUNICIPAL consistent with the preservation of volatility than long term municipal bonds and wants enhanced
BOND FUND capital from income that is exempt investment performance from an actively managed portfolio of
from Pennsylvania state and local tax-free securities.
personal income tax.
[] NEW JERSEY Seeks a high level of current income ...seeks a moderate rate of tax-free income with less price
MUNICIPAL consistent with the preservation of volatility than long term municipal bonds and wants enhanced
BOND FUND capital from income that is exempt investment performance from an actively managed portfolio of
from New Jersey state and local tax-free securities.
personal income tax.
</TABLE>
[] MONEY MARKET FUNDS
INVESTING PRIMARILY IN QUALITY SHORT-TERM SECURITIES OF THE U.S. GOVERNMENT AND
ITS AGENCIES, COMMERCIAL PAPER, CERTIFICATES OF DEPOSIT, AND REPURCHASE
AGREEMENTS. THESE FUNDS SEEK TO MAINTAIN A CONSTANT SHARE PRICE OF $1.00 WITH
INCOME VARYING ACCORDING TO MARKET CONDITIONS AND INTEREST RATES. HOWEVER, MONEY
MARKET FUNDS ARE NOT INSURED OR GUARANTEED BY THE U.S. GOVERNMENT AND THERE CAN
BE NO ASSURANCE THAT THESE FUNDS WILL BE ABLE TO MAINTAIN A STABLE NET ASSET
VALUE OF $1.00.
<TABLE>
<CAPTION>
OBJECTIVE FOR AN INVESTOR WHO...
<S> <C> <C>
[] TREASURY Seeks current income with liquidity ...seeks liquidity of assets, current income, and stability of
RESERVE FUND and stability of principal, with principal.
investments exclusively in U.S.
Treasury obligations.
[] CASH Seeks current income with liquidity ...seeks liquidity of assets, current income, and stability of
RESERVE FUND and stability of principal. principal.
[] TAX-FREE Seeks current income that is exempt ...seeks current income exempt from federal income taxes, and
RESERVE FUND from regular income tax with liquidity desires stability of principal and liquidity of assets.
and stability of principal.
</TABLE>
5
<PAGE>
CORESTATES
INVESTMENT
ADVISERS'
REVIEW
JUNE 30, 1996
COREFUND INVESTMENT REVIEW
Returns for the fiscal year ended June 30, 1996 varied greatly,
depending on the asset class to which investors were exposed. During the first
half of the year, both U.S. stocks and fixed-income instruments generated
extraordinary returns. In the last half of the fiscal year, however, returns for
stocks and bonds went in opposite directions.
Specifically, the total return on bonds, as measured by the Salomon
Brothers Broad Investment Grade Bond Index (SBBI), was -1.26% from January 1
through June 30, 1996. During that same six-month period, the Standard & Poor's
500 Composite Index (S&P500) produced a strong 10.09% return. Combined with the
prior six months' results, the S&P produced a total return of 25.99% for the
year ended June 30, while the SBBI returned only 4.98%.
[GRAPHIC OMITTED]
Bar Graph -- Shown here is a bar graph titled Capital Market Returns,
(% Total Return), showing the performance of the Dow Jones Industrial Average,
Standard & Poor's 500 Composite Index, Salomon Brothers Broad Bond Index,
JP Morgan Global Bond Index, US$ hedged, and the Morgan Stanley Capital
International EAFE Index for the year ended June 30, 1996 and the 6 month
period ended June 30, 1996. The following represent the plot points for the
graph:
<TABLE>
<CAPTION>
Dow Jones Standard & Salomon JP Morgan Morgan Stanley
Industrial Poor's 500 Brothers Broad Global Bond Capital
Period Average Composite Index Bond Index Index, US$ International
hedged EAFE Index
<S> <C> <C> <C> <C> <C>
6 month period 11.78% 10.09% -1.26% 1.64% 5.37%
ended June 30,
1996
Year ended 27.13% 25.99% 4.98% 9.12% 13.28%
June 30, 1996
</TABLE>
Clearly then, the asset allocation choice between stocks and bonds was
critical in determining an investor's experience for the entire fiscal year. We
are pleased that each of the actively managed Class Y shares of the CoreFund
domestic equity funds (Equity, Growth Equity and Special Equity) outperformed
the S&P 500 over the full year.
International investors also experienced positive returns for the
year, with the Morgan Stanley Capital International EAFE Index (EAFE)
of international stocks up 13.28% for the year, and the J.P. Morgan Global Bond
Index up 9.12%.
[GRAPHIC OMITTED]
PHOTOGRAPH OF MARK E. STALNECKER, CHAIRMAN, CSIA
MARK E. STALNECKER
CHAIRMAN, CSIA
The first days of the new fiscal year, however, brought a stock market
retreat. Investor fears that economic growth (and thus inflation) may be too
rapid to sustain the current level of short-term interest rates have already
dissipated a portion of stocks' gains in the past year. The continued rise in
long-term rates, which have dampened equity valuations, has also contributed to
a more bearish attitude. We expect the stock market's volatility to continue in
coming months.
6
<PAGE>
[] COREFUND
EQUITY REVIEW
The broad stock market moved consistently higher throughout the fiscal
year ended June 30, 1996. In the first half of the fiscal year, the S&P 500
total return was 14.45%. Combined with the second half's 10.09% return, the
return for the full year was 25.99%.
Lower interest rates and strong profit growth drove prices higher in
the first half. Momentum continued to take the market up as 1996 began, despite
rising interest rates and concerns about inflationary pressures. The market was
led by growth and smaller-capitalization stocks that benefited from
higher-than-anticipated earnings growth.
By mid-year, however, the stock market's high-speed train ride turned
into a roller coaster. Disappointing second-quarter earnings reports and fears
of higher interest rates finally took their toll on a frothy market that had not
suffered a 10% correction since 1990.
The return of downside volatility does have its benefits, however. The
risk of loss will make equity investors more cautious in choosing stocks. We
believe the recent setbacks will set the stage for longer-term advances, albeit
at a slower pace than the 15.72% annual return that the S&P 500 generated over
the five years ended June 30, 1996.
We do not believe we are in the early stages of a protracted bear
market. Rather, we recommend that equity investors begin to take advantage of
market setbacks to purchase stocks for long-term appreciation. Again, we are
pleased that the actively managed CoreFund equity portfolios outperformed the
broader market during the past year. We encourage investors to take note of the
variety of equity styles now offered to CoreFund shareholders.
[GRAPHIC OMITTED]
Line Graph -- Shown is a line graph depicting the U.S. Treasury Securities
yield curve as of June 30, 1995, December 29, 1995, and June 28, 1996.
The following represent the plot points for the graph:
<TABLE>
<CAPTION>
Date 3 mo. 6 mo. 1 Yr. 2 Yr. 3 Yr. 5 Yr. 10 Yr. 30 Yr.
<S> <C> <C> <C> <C> <C> <C> <C> <C>
6/30/95 5.563% 5.576% 5.623% 5.793% 5.852% 5.970% 6.203% 6.617%
12/29/95 5.072 5.147 5.132 5.150 5.208 5.374 5.570 5.949
6/28/96 5.152 5.358 5.674 6.107 6.269 6.462 6.714 6.894
</TABLE>
BOND AND MONEY MARKET REVIEW
Fixed-income market expectations did an abrupt about-face as 1996
began. At the end of 1995, most investors expected the Federal Reserve Board to
continue to ease short-term interest rates, thus prompting modest declines in
longer-term yields.
But then a variety of factors -- strong economic growth, lack of
progress in addressing long-term Federal government spending, and worsening
inflation fears -- quickly combined to produce negative total returns for the
first six months of 1996. This abrupt reversal of fortune was exemplified by
30-year U.S. Treasury bonds, which yielded about 6% at year-end 1995, and had
climbed up to 7% by June 30, 1996.
The Federal funds rate was reduced 0.25% in January 1996 to 5.25%, but
hopes for further cuts were dashed. By June 30, the market expected the Federal
Reserve policy makers' next move to be a rate increase.
(CONTINUED)
7
<PAGE>
CORESTATES
INVESTMENT
ADVISERS'
REVIEW
(CONTINUED)
[] COREFUND
JUNE 30, 1996
While it is possible that short-term rates may rise slightly in the
second half of 1996, our expectation is that economic growth will slow, and that
no significant inflationary pressures will arise. The risk of another major
increase in long-term rates is limited, and rates should decline as evidence of
slower economic growth mounts.
INTERNATIONAL REVIEW
As has been the case for the past five years, U.S. dollar-based
investors earned lower returns on international equities than on U.S. stocks in
the year ended June 30, 1996. For the year, international stocks underperformed
domestic U.S. equities by approximately 13% (EAFE vs. S&P 500). Sluggish
international growth and the strong foreign-exchange value of the U.S. dollar
against most currencies caused the underperformance. We believe, however, that
international equities should outperform the U.S. market over the next five
years for U.S. dollar-based investors. Global bond markets benefited from
falling rates in the first half of the fiscal year, but U.S. dollar strength and
higher rates worldwide hurt performance for U.S. investors in the second half.
[GRAPHIC OMITTED]
Bar Graph -- Shown is a bar graph titled Stocks -- International vs. Domestic,
(% Total Return)comparing the return of the Standard & Poor's 500 Composite
Index (S&P 500) to the Morgan Stanley Capital International EAFE Index (EAFE).
The following represent the plot points for the graph:
<TABLE>
<CAPTION>
Index 1 Yr. 2 Yr. 3 Yr. 4 Yr. 5 Yr.
<S> <C> <C> <C> <C> <C> <C>
S&P 500 25.99% 26.02% 17.22% 16.31% 15.72%
EAFE 13.28% 7.99% 11.42% 12.22% 11.00%
</TABLE>
STOCKS -- INTERNATIONAL VS. DOMESTIC
(% TOTAL RETURN)
S&P 500 = Standard & Poor's 500 Composite Index
EAFE = Morgan Stanley Capital International EAFE Index
OVERALL MARKET OUTLOOK
As we wrote in the December 31, 1995 Semi-Annual Report, it is
unlikely that the outsized equity returns earned by U.S. investors over the
past five years will continue. Indeed, recent market corrections demonstrate
that we are entering a more sober environment for stocks.
Despite what might happen to the stock and bond market over the next
six to twelve months, we believe that inflation remains under control, both
in the U.S. and worldwide. Further, these low levels of inflation provide a
positive, long-term backdrop for financial assets.
Despite recent volatility we urge CoreFund shareholders to adhere to
their long-term investment plan for success. The individual Fund reports that
follow this introduction provide more detailed insight into the strategies that
our CoreFund portfolio managers plan to pursue to maximize investor returns.
/S/MARK STALNECKER
MARK STALNECKER
CHAIRMAN, CSIA
8
<PAGE>
[] COREFUND
WHAT
YOU NEED
TO KNOW
UNDERSTANDING
FUND
REPORTS
On the following pages, you will find reports for each fund in the
CoreFund Family of Mutual Funds. The reports include discussion and analysis
from each fund manager as to an individual fund's performance for the year
ending June 30, 1996. The managers' commentaries provide insight into the
investment strategies they are employing, and look at the market forces that are
expected to prevail during the next six-month period.
For funds with equity holdings, the individual reports include listings
of the top holdings and the percentage of the total fund invested in these
holdings. For funds with only fixed-income or money market holdings, the reports
include pie charts that show how those holdings are divided according to either
maturity diversification or quality ratings.
Accompanying each commentary is a box with QUICK FUND FACTS, which
includes information about when a fund was opened, the size of the portfolio,
the number of shares outstanding, and, where applicable, the average weighted
maturity of a fund's fixed-income holdings along with the 7-day effective yield.
UNDERSTANDING
FUND
PERFORMANCE
Performance for EQUITY and FIXED INCOME Funds is reported in tables
showing average annual returns from inception for both the institutional class
(Y) shares, and retail class (A) shares -- with and without the sales charge.
Also, a line graph shows the change or growth in value of a hypothetical $10,000
investment over the lifetime of each fund. Both Class Y and Class A of each fund
are compared with a commonly used industry index to show how the Fund's
performance stacks up against its peers.
A performance box is provided for each MONEY MARKET Fund. This box
shows the six-month total return, 7-day and 30-day yields for both classes as
compared to the industry benchmark that the Fund manager uses to measure
performance.
As you review the information in these Fund reports, please remember
that past performance of the portfolios does not predict future results. Also,
investment return and principal value will fluctuate so that an investor's
shares, when redeemed, may be worth more or less than their original cost.
For the CoreFund Class A (individual) shares, the performance
information has been adjusted to reflect the 12b-1 fee associated with these
shares. The Class A data has also been divided to show performance with and
without the assessment of the maximum sales charge of 3.25%.
9
<PAGE>
WHAT
YOU NEED
TO KNOW
(CONTINUED)
Various terms used in the fund reports are defined as follows:
CLASS Y/CLASS A&C CoreFund shares are currently available in three different
classes. Class Y shares are for institutional investors and 401(k) plan
participants. Class A (fixed income and equity) and Class C (money market)
shares are for individuals, and have added features such as checkwriting and
automatic investment plans, as well as some additional fees1.
LOAD refers to fees that may be associated with a particular Fund. Where loads
are shown, both sales charges (incurred when purchasing shares) and 12b-1 fees
have been included. The 12b-1 fee, named after the Securities and Exchange
Commission rule that permits it, is assessed to recover costs incurred through
advertising, commission payments to brokers, or other expenses associated with
marketing and distributing a fund.
DEFINING
THE
TERMS
TOTAL RETURN shows how the value of an investment has changed from the beginning
to the end of a period, assuming that dividends andcapital gains have been
reinvested. In the performance tables for equity and fixed income funds, total
return is shown on an "annualized" basis -- it averages performance at a
constant rate for each year over a given period. In the performance tables for
money market funds, the six-month total return is shown on a "cumulative" basis
- -- i.e., the return for the period from January 1, 1996 to June 30, 1996.
NET ASSET VALUE (NAV) reflects the market value of one share of the fund on the
date listed. This figure is determined by taking the fund's total assets --
securities, cash, and any accrued earnings -- and then deducting liabilities and
dividing by the number of shares outstanding.
Money market funds seek to maintain a stable NAV of $1.00, although there
is no guarantee they will always do so. There are three money market portfolios
in the CoreFund Family of Mutual Funds: Cash Reserve, Treasury Reserve, and
Tax-Free Reserve. YIELD refers to the rate of return for an investment
portfolio, expressed as a percentage. Yield for mutual funds is established by a
formula set by the Securities and Exchange Commission. A fund's yield will
fluctuate and reflect the portfolio's net earning power after fund expenses have
been paid.
MATURITY refers to the period over which a bond or other fixed-income security
must be held to earn the full yield offered by the issuer of the security.
Average weighted maturity describes the average period of maturity in a
portfolio that contains fixed-income securities of varying maturities.
1 On April 22, 1996 Series A Institutional shares were redesignated as Class Y
shares and Series B Individual shares were redesignated as Class A with the
exception of the money market funds where individual shares are Class C.
10
<PAGE>
[] COREFUND
DISTRIBUTIONS are the payments of income and capital gains to shareholders of a
mutual fund. For tax purposes, capital gains distributions are calculated
separately from interest income or dividends.
INDEX is a statistical composite of selected stocks or bonds that is used to
measure price fluctuations in these markets. For example, Standard & Poor's 500
Composite Index (S&P 500) is a popular measurement of the stock market's
performance based on prices of 500 common stocks listed on the New York and
American stock exchanges or traded over the counter.
FACE VALUE is the amount the bondholder receives when the bonds are redeemed at
maturity. Interest payments are based on the face value (also called "par
value").
VOLATILITY is a description of how much the price of securities, such as mutual
funds, moves up or down within a given period.
DOLLAR-COST AVERAGING is a technique of investing a fixed amount of money in
mutual fund shares at regular intervals rather than all at once. The objective
is to buy fewer shares when prices are high and more shares when they are low,
so the average cost per share is reduced.
DIVERSIFICATION is spreading of risk by investing assets in a wide-range of
securities. Mutual funds offer automatic diversification.
HEDGE is a defensive investment strategy, often involving the buying or selling
of options, to offset possible losses and thereby to reduce risk.
EXPENSE RATIO is a way to define the amount that shareholders pay for mutual
fund operating and management costs. This ratio is expressed as a percentage.
11
<PAGE>
MANAGERS'
DISCUSSION
OF
FUND
PERFORMANCE
JUNE 30, 1996
[] EQUITY INDEX FUND
The Class Y shares of the CoreFund Equity Index Fund returned 25.69%
for the one-year period ended June 30, 1996. This compared with a return of
25.99% for the benchmark index, the S&P 500 Composite Index (S&P 500), during
the same period.
Assets for the period increased from $112.6 million on June 30, 1995 to
$166.4 million as of June 30, 1996. Well-diversified across the large, familiar
names of the S&P 500, the CoreFund Equity Index Fund remains an attractive
alternative for investors who want to capture the expected favorable long-term
return of the equity market, without the risks often associated with any
particular investment management style.
For purposes of efficiency, the Fund has historically owned
significantly fewer than the 500 issues of the S&P 500. When the Fund was small,
this strategy played an important role in minimizing the impact of transaction
costs.
To focus more on tracking error, the number of issues held was greatly
expanded last year, through a major, one-time rebalancing. Steps were also taken
to minimize the idle cash position held in the Fund. The benefits of these
adjustments were demonstrated during the past year, as a meaningfully lower
tracking error was registered.
QUICK FUND FACTS -- EQUITY INDEX
INCEPTION DATE: FEBRUARY 14, 1985
PORTFOLIO SIZE: $166.4 MILLION
SHARES OUTSTANDING: 5,842,987 (CLASS Y)
TOP FIVE HOLDINGS (AS OF JUNE 30, 1996)
% OF FUND INVESTMENTS
GENERAL ELECTRIC 2.8%
COCA-COLA COMPANY 2.4%
EXXON CORPORATION 2.1%
AT&T CORPORATION 2.0%
PHILIP MORRIS CO. INC. 1.7%
AVERAGE ANNUAL TOTAL RETURN1
1 Year 5 Year 10 Year
Class Y 25.69% 14.76% 12.42%
Class A -- -- --
COMPARISON OF CHANGE IN VALUE
OF $10,000 INVESTMENT (Dollars in Thousands)
[] EQUITY INDEX (CLASS Y) $46,755
[] S&P 500 COMPOSITE INDEX $53,216
[GRAPHIC OMITTED]
Line Graph -- Shown is a line graph comparing the performance of the Equity
Index Fund to the Standard & Poor's 500 Composite Index.
Graph title -- Commparison of Change in Value of $10,000 Investment
The following represent the plot points for the graph:
<TABLE>
<CAPTION>
2/28/85 6/30/85 6/30/86 6/30/87 6/30/88 6/30/89 6/30/90 6/30/91 6/30/92 6/30/93 6/30/94 6/30/95 6/30/96
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Equity $10,000 $10,867 $14,507 $17,828 $16,248 $19,238 $21,906 $23,498 $26,450 $29,727 $29,891 $37,199 $46,755
Index
S&P 500 10,000 10,742 14,590 18,263 17,007 20,497 23,877 25,643 29,085 33,046 33,512 42,239 53,216
</TABLE>
1 FOR THE PERIOD ENDED JUNE 30, 1996. PAST PERFORMANCE OF THE PORTFOLIO IS NOT
PREDICTIVE OF FUTURE PERFORMANCE. CLASS Y SHARES OF THE EQUITY INDEX PORTFOLIO
COMMENCED OPERATIONS ON FEBRUARY 14, 1985, AS A PREDECESSOR FUND WHICH WAS
ACQUIRED JUNE 1, 1991, BY COREFUNDS, INC.
12
<PAGE>
[] COREFUND
[] EQUITY FUND
The Class Y shares of the CoreFund Equity Fund returned 27.88% for the
one-year period ended June 30, 1996. The Fund outperformed its benchmark index,
the S&P 500, which returned 25.99% for the same period.
Assets for the period increased from $365.8 million on June 30, 1995
to $426.0 million as of June 30, 1996. Included in this change is the
acquisition of the Conestoga Equity Fund. Please see the Notes to the Financial
Statements for further information regarding the merger.
Over the past year, the stock market continually disappointed
forecasters calling for a "typical 5%-10% correction." The strength of the
market's advance, fueled by increasing inflows into mutual funds, was nothing
less than astonishing at times. The market's gains were led by healthcare
stocks, which benefited from a large number of product approvals by a much more
responsive Food & Drug Administration. Technology stocks proved to be the
laggards, as they digested incredible advances from previous periods.
The Fund's portfolio benefited from an underweighting in the consumer
cyclicals sector, and an overweighting in the financial sector. In all, 10 of 11
sectors outperformed the Fund's benchmark index, with utilities the lone
exception. The standout sectors included basic materials (led by fertilizer
holdings such as IMC Global and Potash); capital goods (G.E. and Boeing);
consumer staples (Kroger and Philip Morris); financial (led by banks such as
Chase Manhattan and NationsBank); and transportation (boosted by railroads such
as CSX and Union Pacific).
Looking ahead, many factors will challenge the market from making
further advances. These include: uncertainty over future Federal Reserve policy;
valuations that are high as com-
QUICK FUND FACTS -- EQUITY
INCEPTION DATE: FEBRUARY 28, 1990
PORTFOLIO SIZE: $426.0 MILLION
SHARES OUTSTANDING: 24,679,279 (Y&A COMBINED)
TOP FIVE HOLDINGS (AS OF JUNE 30, 1996)
% OF FUND INVESTMENTS
PHILIP MORRIS CO. INC. 4.8%
TRAVELERS INC. 3.3%
AT&T CORPORATION 3.0%
MERCK & CO. INC. 3.0%
IBM CORPORATION 2.7%
AVERAGE ANNUAL TOTAL RETURN1
1 Year 5 Year Inception Class Y (Synthetic) 27.88% 16.17%
15.81% Class A without Load27.78% 16.13% 15.78% Class A with Load 23.61%
15.37% 15.17%
COMPARISON OF CHANGE IN VALUE
OF $10,000 INVESTMENT (Dollars in thousands)
[] EQUITY (Class Y) Synthetic $25,338
[] EQUITY (Class A) $24,478
[] S&P 500 COMPOSITE INDEx $24,315
[GRAPHIC OMITTED]
Line Graph -- Shown is a line graph comparing the performance of the Equity
Fund to the Standard & Poor's 500 Composite Index.
Graph title -- Comparison of Change in Value of $10,000 Investment
The following represent the plot points for the graph:
<TABLE>
<CAPTION>
2/28/90 6/30/90 6/30/91 6/30/92 6/30/93 6/30/94 6/30/95 6/30/96
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Equity, Class A $9,675 $10,608 $11,589 $13,821 $15,586 $15,821 $19,156 $24,478
Equity, Class Y 10,000 10,964 11,978 14,285 16,109 16,352 19,814 25,338
(Synthetic)
S&P 500 10,000 10,909 11,717 13,289 15,099 15,312 19,299 24,315
</TABLE>
1 FOR THE PERIOD ENDED JUNE 30, 1996. PAST PERFORMANCE OF THE PORTFOLIO IS NOT
PREDICTIVE OF FUTURE PERFORMANCE. INSTITUTIONAL CLASS Y SHARES WERE OFFERED
BEGINNING FEBRUARY 21, 1995. THE PERFORMANCE SHOWN FOR EQUITY PORTFOLIO CLASS Y
SHARES (SYNTHETIC) PRIOR TO THAT DATE IS BASED ON THE PERFORMANCE OF INDIVIDUAL
CLASS A SHARES, WITHOUT THE SALES CHARGE FOR CLASS A SHARES. CLASS A SHARES OF
THE EQUITY PORTFOLIO COMMENCED OPERATIONS ON FEBRUARY 28, 1990.
13
<PAGE>
MANAGERS'
DISCUSSION
OF
FUND
PERFORMANCE
(CONTINUED)
JUNE 30, 1996
[] EQUITY FUND (CONTINUED)
pared with historical ranges; speculative excesses (as reflected in the recent
boom of initial public offerings); the outcome of U.S. presidential and
Congressional elections in the fall of 1996; possible slowing of mutual fund
cash flows; fears of inflation, sparked by rising food prices; and a tightening
labor market.
In light of these challenges, the market will have to demonstrate more
astonishing strength and resilience than ever if it is to maintain its record
of defying the forecasters who feel a falloff is inevitable.
[GRAPHIC OMITTED]
PHOTOGRAPH OF TIMOTHY R. STIVES, PORTFOLIO MANAGER -- GROWTH EQUITY FUND
"THERE'S NOTHING FANCY GOING ON IN THIS FUND. WE
OFFER OUR CLIENTS A FUND COMPRISED OF 60-65 OF THE
BEST GROWTH STOCKS WE CAN FIND."
TIMOTHY R. STIVES
PORTFOLIO MANAGER -- GROWTH EQUITY FUND
14
<PAGE>
[] COREFUND
[] GROWTH EQUITY FUND
The Class Y shares of the CoreFund Growth Equity Fund returned 31.36%
for the one-year period ended June 30, 1996. The Fund significantly outperformed
its two benchmark indices, the Lipper Growth Funds Index and the S&P 500, which
returned 22.2% and 25.99%, respectively, during the same period.
Assets for the period increased from $93.4 million on June 30, 1995 to
$123.2 million as of June 30, 1996.
The Fund's strong performance resulted from continuation of a strong
market rally and superior portfolio decision-making that provided investors with
very competitive mutual fund returns.
Last year, all of the macroeconomic variables that move the stock
market worked in investors' favor. There was slow, but positive economic growth,
and inflation was under control. Corporate profit growth was very strong, and
the Federal Reserve acted to lower short-term interest rates.
Currently, the economy continues to grow at a slow, but positive rate
(real GDP increased 2.8% in the first quarter), and inflation is still under
control (the CPI was up 3.2% in the quarter). But inflationary expectations have
changed. Corporate profit growth is slowing relative to last year. Most
important, the Federal Reserve is no longer lowering interest rates; at its May
meeting, the Federal Reserve's Open Market Committee decided to leave short-term
interest rates unchanged, and it is expected to increase rates slightly in the
future.
Given these conditions, investors should not expect the market to
provide the same robust returns as in the past year. The market is still giving
out enough healthy signs, however, to prompt us to remain fully invested in the
Fund. We are keeping
QUICK FUND FACTS -- GROWTH EQUITY
INCEPTION DATE: FEBRUARY 3, 1992
PORTFOLIO SIZE: $123.2 MILLION
SHARES OUTSTANDING: 8,684,001 (Y&A COMBINED)
TOP FIVE HOLDINGS (AS OF JUNE 30, 1996)
% OF FUND INVESTMENTS
SARA LEE CORPORATION 3.1%
GENERAL ELECTRIC CO. 2.3%
COCA-COLA COMPANY 2.3%
ORACLE SYSTEMS CORP. 2.2%
PEPSICO INC. 2.2%
AVERAGE ANNUAL TOTAL RETURN1
1 Year 3 Year Inception
Class Y 31.36% 14.35% 9.79%
Class A without Load 31.00% 14.11% 12.61%
Class A with Load 26.69% 12.87% 11.54%
COMPARISON OF CHANGE IN VALUE
OF $10,000 INVESTMENT (Dollars in thousands)
[] Growth Equity (Class Y) $15,090
[] Growth Equity (Class A) Synthetic $14,507
[] Russell 1000 Growth Index $17,453
[] S&P 500 Composite Index $18,285
[] Lipper Growth Funds Index $16,630
[GRAPHIC OMITTED]
Line Graph -- Shown is a line graph comparing the performance of the Growth
Equity Fund to the Standard & Poor's 500 Composite Index, Russell 1000 Growth
Index and the Lipper Growth Stock Funds Index.
Graph title -- Comparison of Change in Value of $10,000 Investment
The following represent the plot points for the graph:
<TABLE>
<CAPTION>
2/28/90 6/30/92 6/30/93 6/30/94 6/30/95 6/30/96
<S> <C> <C> <C> <C> <C> <C>
Growth Equity, Class Y $10,000 $8,795 $10,093 $9,285 $11,487 $15,090
Equity, Class A (Synthetic) 9,675 8,509 9,765 8,971 11,074 14,507
Russell 1000 Growth Index 10,000 9,622 10,490 10,461 13,654 17,453
S&P 500 Composite Index 10,000 9,993 11,354 11,514 14,513 18,285
Lipper Growth Funds Index 10,000 9,494 11,067 11,254 13,857 16,722
</TABLE>
1 FOR THE PERIOD ENDED JUNE 30, 1996. PAST PERFORMANCE OF THE PORTFOLIO IS NOT
PREDICTIVE OF FUTURE PERFORMANCE. INDIVIDUAL CLASS A SHARES WERE OFFERED
BEGINNING JANUARY 4, 1993. THE PERFORMANCE SHOWN FOR GROWTH EQUITY PORTFOLIO
CLASS A SHARES (SYNTHETIC) PRIOR TO THAT DATE IS BASED ON THE PERFORMANCE OF
INSTITUTIONAL CLASS Y SHARES, ADJUSTED TO REFLECT THE MAXIMUM SALES CHARGE OF
3.25% FOR THE CLASS A SHARES. CLASS Y SHARES OF THE GROWTH EQUITY PORTFOLIO
COMMENCED OPERATIONS ON FEBRUARY 3, 1992. AS OF JUNE 30, 1996 THE INDEX FOR THE
COREFUND GROWTH EQUITY FUND HAS CHANGED FROM THE RUSSELL 1000 INDEX TO THE
LIPPER GROWTH FUNDS INDEX AND THE S&P 500 COMPOSITE INDICES. THE CHANGE WAS
MADE BECAUSE THE RUSSELL 1000 INDEX IS MOST APPROPRIATE FOR MEASURING GROWTH
STOCKSOF CO-MINGLED PENSION FUNDS, WHEREAS THE LIPPER GROWTH STOCK INDEX IS
MOREAPPROPRIATE FOR MEASURING GROWTH STOCK MUTUAL FUNDS. THE S&P 500 INDEX IS
GENERALLY APPROPRIATE TO COMPARE TO ANY STOCK MUTUAL FUND.
15
<PAGE>
MANAGERS'
DISCUSSION
OF
FUND
PERFORMANCE
(CONTINUED)
JUNE 30, 1996
[] GROWTH EQUITY FUND (CONTINUED)
cash at the 5%-10% level in discretionary accounts. In our equity portfolio, we
continue to be overweighted, compared to the S&P 500, in technology stocks, with
a bias toward telecommunication equipment suppliers and computer networking
stocks. We continue to own Microsoft, Oracle Systems, CISCO Systems, and U.S.
Robotics. For purposes of balance, appropriate diversification, and risk
control, we also own GE, Coca-Cola, Merck and other quality growth stocks.
[] SPECIAL EQUITY FUND
The Class Y shares of the CoreFund Special Equity Fund returned 36.21%
for the one-year period ended June 30, 1996. The Fund significantly outperformed
its benchmark index, the Russell 3000 equal weighted, which returned 24.95% for
the same period.
Assets for the period increased from approximately $54.8 million on
June 30, 1995 to $64.8 million as of June 30, 1996.
The Fund's portfolio benefited from an overweighting in the healthcare
sector. In all, 9 out of 11 sectors outperformed the benchmark index.
[GRAPHIC OMITTED]
PHOTOGRAPH OF JOSEPH E. STOCKE, PORTFOLIO MANAGER--SPECIAL EQUITY & EQUITY FUND
"INCREASING CONCERNS ABOUT THE MARKET SUSTAINING ITS ADVANCE LED INVESTORS TO
CONSUMER STAPLES STOCKS, WHICH THEN BECAME THE BEST PERFORMING GROUP."
JOSEPH E. STOCKE
PORTFOLIO MANAGER -- SPECIAL EQUITY
& EQUITY FUND
16
<PAGE>
[] COREFUND
Standouts were consumer cyclicals led by specialty retailers Borders Group and
Mail Boxes, etc., financial services led by Travelers, NationsBank, and Olympic
Financial, and healthcare boosted by Scios Nova and Isis Pharmaceuticals.
QUICK FUND FACTS -- SPECIAL EQUITY
INCEPTION DATE: MARCH 15, 1994
PORTFOLIO SIZE: $64.8 MILLION
SHARES OUTSTANDING: 5,465,417 (Y&A COMBINED)
TOP FIVE HOLDINGS (AS OF JUNE 30, 1996)
% OF FUND INVESTMENTS
BORDERS GROUP INC. 2.5%
SCIOS NOVA INC. 2.2%
PRIME HOSPITALITY CORP. 1.6%
QUALCOMM. INC. 1.6%
WFS FINANCIAL INC. 1.6%
AVERAGE ANNUAL TOTAL RETURN1
1 Year Inception
Class Y (Synthetic) 36.21% 17.04%
Class A without Load 36.05% 16.98%
Class A with Load 31.58% 15.29%
COMPARISON OF CHANGE IN VALUE
OF $10,000 INVESTMENT (Dollars in thousands)
[] SPECIAL EQUITY (Class Y) Synthetic $15,477
[] SPECIAL EQUITY (Class A) $14,953
[] RUSSELL 3000 INDEX EQUAL WEIGHTED $14,711
[GRAPHIC OMITTED]
Line Graph -- Shown is a line graph comparing the performance of the Special
Equity Fund to the Russell 3000 (Equal Weighted) Index.
Graph title -- Comparison of Change in Value of $10,000 Investment
The following represent the plot points for the graph:
<TABLE>
<CAPTION>
3/15/94 6/30/94 6/30/95 6/30/96
<S> <C> <C> <C> <C>
Special Equity, Class A $ 9,675 $8,978 $10,991 $14,953
Special Equity, Class Y (Synthetic) 10,000 9,279 11,363 15,477
Russel 3000 (equal weighted) Index 10,000 9,645 11,773 14,711
</TABLE>
1 FOR THE PERIOD ENDED JUNE 30, 1996. PAST PERFORMANCE OF THE PORTFOLIO IS NOT
PREDICTIVE OF FUTURE PERFORMANCE. INSTITUTIONAL CLASS Y SHARES WERE OFFERED
BEGINNING FEBRUARY 21, 1995. THE PERFORMANCE SHOWN FOR SPECIAL EQUITY PORTFOLIO
CLASS Y SHARES (SYNTHETIC) PRIOR TO THAT DATE IS BASED ON THE PERFORMANCE OF
INDIVIDUAL CLASS A SHARES, WITHOUT THE SALES CHARGE FOR CLASS A SHARES. CLASS A
SHARES OF THE SPECIAL EQUITY PORTFOLIO COMMENCED OPERATIONS ON MARCH 15, 1994.
[] INTERNATIONAL GROWTH FUND
The Class Y shares of the CoreFund International Growth Fund returned
16.72% for the one-year period ended June 30, 1996 -- significantly
outperforming its benchmark index, the Morgan Stanley Capital International
EAFE Index, which returned 13.28% over the same period.
Assets for the period increased from $112.8 million on June 30, 1995
to $141.4 million as of June 30, 1996. Included in this change is the
acquisition of the Conestoga International Equity Fund. Please see the Notes to
the Financial Statements for further information regarding the merger.
The Fund's largest single-country position at the end of the period
was in Japan (33% of the total portfolio). The Tokyo stock market showed a
strong recovery over the period, rising 43%, following Japanese authorities'
decision last summer to revive a stagnating economy by cutting interest rates,
loosening the money supply, and letting the yen weaken. But the weaker yen has
eroded much of the market's gain for foreign investors -- after adjustment for
depreciation against the dollar, for example, the stock market's return amounted
to just 11% for U.S. investors.
The Fund's Japanese portfolio is focused on market sectors that will
achieve the strongest growth in earnings, such as retailing, capital goods, and
technology. This portfolio has outperformed the index, returning 14.3%.
In addition, a currency hedge protected 50% of Japanese assets for
most of the year. This cover was reduced to 25% in May.
17
<PAGE>
MANAGERS'
DISCUSSION
OF
FUND
PERFORMANCE
(CONTINUED)
JUNE 30, 1996
[] INTERNATIONAL GROWTH (CONTINUED)
Hong Kong and Singapore were rewarding markets, but the Fund's
investments in Thailand, Malaysia, Taiwan, and India were generally
disappointing, returning only 10.6%. Signs of improvement in the Chinese
economy are encouraging for the potential of this region, especially Hong Kong
and Taiwan.
Europe (36% of the portfolio) produced the best return for the fund.
The UK, representing the largest single European holding (14%), returned 22.8%.
There were also good gains in Switzerland and Spain, but France and Italy were
somewhat disappointing. European economies are growing only modestly, but
inflation is low and equity markets are supported by rising bond prices. A
greater focus by management on shareholder value--a relatively new phenomenon
in most European countries--is a strong theme in the portfolio.
Stock markets in Latin America (3% of the Fund) have shown a good
recovery from the depressed levels seen after the Mexican economic crisis at the
start of 1995. Stabilization of the Mexican peso, a fall in the inflation rate
after a year of "crisis management," and increased competitiveness of companies
exporting to the U.S., have all generated renewed optimism in Mexican markets.
International investors are likely to return to those markets in growing
numbers, and will probably spread to the rest of the region in time. Already,
Brazil and Argentina have shown strong growth, even in dollar terms. Growth in
Chile has been less robust.
QUICK FUND FACTS -- INTERNATIONAL GROWTH
INCEPTION DATE: FEBRUARY 12, 1990
PORTFOLIO SIZE: $141.4 MILLION
SHARES OUTSTANDING: 10,119,337 (Y&A COMBINED)
TOP FIVE HOLDINGS (AS OF JUNE 30, 1996)
% OF FUND INVESTMENTS
SPOT JPY 7.3%
MITSUBISHI HEAVY IND. 1.8%
HSBC 1.4%
TOYOTA MOTOR 1.4%
ROHM CO. 1.4%
AVERAGE ANNUAL TOTAL RETURN1
1 Year 5 Year Inception
Class Y 16.72% 9.75% 8.68%
Class A without Load 16.54% 9.62% 8.58%
Class A with Load 12.77% 8.90% 8.01%
COMPARISON OF CHANGE IN VALUE
OF $10,000 INVESTMENT (Dollars in thousands)
[] INTERNATIONAL GROWTH (Class Y) $17,018
[] INTERNATIONAL GROWTH (Class A) Synthetic $16,404
[] MORGAN STANLEY EAFE INDEX $13,980
[GRAPHIC OMITTED]
Line Graph -- Shown is a line graph comparing the performance of the
International Growth Fund to the Morgan Stanley EAFE Index.
Graph title -- Comparison of Change in Value of $10,000 Investment
The following represent the plot points for the graph:
<TABLE>
<CAPTION>
2/12/90 6/30/90 6/30/91 6/30/92 6/30/93 6/30/94 6/30/95 6/30/96
<S> <C> <C> <C> <C> <C> <C> <C> <C>
International Growth, $10,000 $10,985 $10,688 $11,210 $12,562 $14,611 $14,581 $17,018
Class Y
International Growth, 9,675 10,628 10,340 10,846 12,191 14,154 14,086 16,404
Class A (Synthetic)
EAFE 10,000 9,814 8,682 8,626 10,375 12,138 12,341 13,980
</TABLE>
1 FOR THE PERIOD ENDED JUNE 30, 1996. PAST PERFORMANCE OF THE PORTFOLIO IS NOT
PREDICTIVE OF FUTURE PERFORMANCE. INDIVIDUAL CLASS A SHARES WERE OFFERED
BEGINNING JANUARY 4, 1993. THE PERFORMANCE SHOWN FOR INTERNATIONAL GROWTH
PORTFOLIO CLASS A SHARES (SYNTHETIC) PRIOR TO THAT DATE IS BASED ON THE
PERFORMANCE OF INSTITUTIONAL CLASS Y SHARES, ADJUSTED TO REFLECT THE MAXIMUM
SALES CHARGE OF 3.25% FOR THE CLASS A SHARES. CLASS Y SHARES OF THE
INTERNATIONAL GROWTH PORTFOLIO COMMENCED OPERATIONS ON FEBRUARY 12, 1990.
18
<PAGE>
[] COREFUND
[GRAPHIC OMITTED]
PHOTOGRAPH OF STEPHEN M. DALTON, PORTFOLIO MANAGER -- BALANCED FUND
"OUR OUTLOOK FOR THE
SECOND HALF OF 1996 IS
THAT INTEREST RATES AND
CORPORATE EARNINGS WILL
CONTINUE TO BE PRIME
MOVERS OF STOCK PRICES."
STEPHEN M. DALTON
PORTFOLIO MANAGER -- BALANCED FUND
[] BALANCED FUND
The Class Y shares of the CoreFund Balanced Fund returned 18.41% for
the one-year period ended June 30, 1996. The Fund's benchmarks, the S&P 500,
and the Lehman Brothers Intermediate Government/Corporate Bond Index returned
10.09% and 5.00% respectively for the same period.
Assets for the period increased from $63.4 million on June 30, 1995 to
$105.7 million as of June 30, 1996. Included in this change is the acquisition
of the Conestoga Balanced Fund. Please see the Notes to the Financial
Statements for further information regarding the merger.
Strong equity performance continues to power the Fund's overall
return. In particular, the Fund's modestly overweighted position in the
technology sector handily outpaced both the overall S&P 500, and its technology
sector, for those periods.
These returns, coupled with solid gains from the basic materials,
capital goods, and consumer staples sectors, more than offset disappointing
returns from the Fund's holdings in financial, selected healthcare, and
telephone issues.
19
<PAGE>
MANAGERS'
DISCUSSION
OF
FUND
PERFORMANCE
(CONTINUED)
JUNE 30, 1996
[] BALANCED FUND (CONTINUED)
A group of diversified stocks also posted healthy returns. These
included HBO (a healthcare information systems company), Coca-Cola, American
Home Products, PepsiCo., Monsanto, Gillette, Cardinal Health, and G.E.
Although the average maturity of the Fund's bond holdings was reduced,
beginning in late winter, it still remains above that of the benchmark index.
Our outlook for the second half of 1996
is for continued volatility in the capital markets. Interest rates, corporate
earnings, and money flows into stocks will continue to be the prime movers of
stock prices. With investor readings on the direction of these factors changing
frequently, we would not be surprised to see flat to negative returns in the
financial markets for the final half of the year.
As a result, we are maintaining our
diversified posture toward equities. Our bias will continue to be toward
attractively priced stocks of those companies that are likely to generate
improved earnings performance, relative to the market, over the next twelve
months . Also, we will continue to favor companies with historically
predictable earnings growth, as well as out-of-favor issues that offer dividend
yields in excess of the current market. This focus should reduce the risk
profile of the Fund's equity holdings.
We expect long-term interest rates to be range-bound between 6.5% and
7.5% over the next six months. We will continue to shorten duration and
maturity, at least in line with the performance benchmark. We will also seek to
opportunistically increase overall yield on the Fund's fixed-income holdings.
QUICK FUND FACTS -- BALANCED
INCEPTION DATE: JANUARY 4, 1993
PORTFOLIO SIZE: $105.7 MILLION
SHARES OUTSTANDING: 8,453,348 (Y&A COMBINED)
TOP FIVE EQUITY HOLDINGS (AS OF JUNE 30, 1996)
% OF FUND INVESTMENTS
GENERAL ELECTRIC CO. 1.3%
SCHERING PLOUGH CO. 1.3%
CISCO SYSTEMS INC. 1.3%
ALUMINUM CO. OF AMERICA 1.2%
GTE CORP. 1.2%
AVERAGE ANNUAL TOTAL RETURN1
1 Year 3 Year Inception
Class Y 18.41% 10.62% 10.77%
Class A without Load 18.13% 10.33% 10.20%
Class A with Load 14.31% 9.12% 9.09%
COMPARISON OF CHANGE IN VALUE
OF $10,000 INVESTMENT (DOLLARS IN THOUSANDS)
[] BALANCED (Class Y) $14,185
[] BALANCED (Class A) Synthetic $13,611
[] S&P 500 COMPOSITE INDEX $16,748
[] LEHMAN GOV'T/CORP BOND INDEX $12,042
[GRAPHIC OMITTED]
Line Graph -- Shown is a line graph comparing the performance of the Balanced
Fund to the S&P 500 Composite and Lehman Government / Corporate Bond Indicies.
Graph title -- Comparison of Change in Value of $10,000 Investment
The following represent the plot points for the graph:
<TABLE>
<CAPTION>
1/4/93 6/30/93 6/30/94 6/30/95 6/30/96
<S> <C> <C> <C> <C> <C>
Balanced, Class Y $10,000 $10,478 $10,309 $11,980 $14,185
Balanced, Class A (synthetic) 9,675 10,135 9,946 11,522 13,611
S&P 500 Composite Index 10,000 10,400 10,547 13,293 16,748
Lehman Gov't/Corp. Bond Index 10,000 10,419 10,392 11,468 12,042
</TABLE>
1 FOR THE PERIOD ENDED JUNE 30, 1996. PAST PERFORMANCE OF THE PORTFOLIO IS NOT
PREDICTIVE OF FUTURE PERFORMANCE. INDIVIDUAL CLASS A SHARES WERE OFFERED
BEGINNING MARCH 16, 1993. THE PERFORMANCE SHOWN FOR BALANCED PORTFOLIO CLASS A
SHARES (SYNTHETIC) PRIOR TO THAT DATE IS BASED ON THE PERFORMANCE OF
INSTITUTIONAL CLASS Y SHARES, ADJUSTED TO REFLECT THE MAXIMUM SALES CHARGE OF
3.25% FOR THE CLASS A SHARES. CLASS Y SHARES OF THE BALANCED PORTFOLIO
COMMENCED OPERATIONS ON JANUARY 4, 1993.
20
<PAGE>
[] COREFUND
[] SHORT TERM INCOME FUND
The Class Y shares of the CoreFund Short Term Income Fund returned
4.86% for the one-year period ended June 30, 1996, compared to a return of
5.55% for the benchmark index, the Merrill Lynch 1-year Treasury Bill Index,
during the same period.
The Fund's average weighted maturity was extended from 0.9 years to
1.13 years during the one-year period.
The Fund underperformed its benchmark index because of the extension
in duration that occurred through the year. Stronger economic statistics
boosted expectations for rate increases by the Federal Reserve, causing
interest rates to rise and prices to decline. The Fund had a large
concentration in two-year maturity securities, which underperformed the 1-year
Treasury Bill. The 1-year Treasury Bill outperformed money markets as well as
Treasury notes between one and three years. The front end of the yield curve
also steepened, due to expectations of a rate increase by the Federal Reserve.
The Fund was overweighted in asset-backed securities, which was the
year's best-performing asset class. The overweighting in select
[GRAPHIC OMITTED]
PHOTOGRAPH OF CATHY L. RAHAB, PORTFOLIO MANAGER -- SHORT TERM INCOME FUND
"STRONGER ECONOMIC STATISTICS BOOSTED EXPECTATIONS FOR RATE INCREASES BY THE
FEDERAL RESERVE, CAUSING INTEREST RATES TO RISE AND PRICES TO DECLINE."
CATHY L. RAHAB
PORTFOLIO MANAGER -- SHORT TERM INCOME FUND
21
<PAGE>
MANAGERS'
DISCUSSION
OF
FUND
PERFORMANCE
(CONTINUED)
JUNE 30, 1996
[] SHORT TERM INCOME FUND (CONTINUED)
corporate securities contributed to the total return, helping to offset the
negative impact of the yield curve distribution.
The direction of Federal Reserve policy this summer will set the
course for interest rates and yield curve shapes for the remainder of the year.
Until the market settles into a range, we will hold the duration of the Fund
relatively close to one year, while adjusting the concentration along the
yield curve, to capture areas of value.
Short-term corporate securities, having benefited from consistent
spread tightening during the year, are generally at historically narrow levels.
We anticipate reducing the Fund's total exposure to short-term corporate
securities during the year. However, specific credits within the sector should
still outperform the market as a whole.
QUICK FUND FACTS -- SHORT TERM INCOME
INCEPTION DATE: MAY 15, 1995
PORTFOLIO SIZE: $30.1 MILLION
SHARES OUTSTANDING: 3,032,229 (Y&A COMBINED)
AVERAGE WEIGHTED MATURITY: 1.1 YEARS
QUALITY DIVERSIFICATION (AS OF JUNE 30, 1996)
[GRAPHIC OMITTED]
Pie chart -- Shown is a chart depicting the Short Term Income Fund's
security quality ratings.
BA 5%
BAA 9%
A 9%
AA 3%
AAA 65%
NOT RATED 9%
MOODY'S RATING
% OF FUND INVESTMENTS
AVERAGE ANNUAL TOTAL RETURN1
1 Year Inception
Class Y 4.86% 5.07%
Class A without Load 4.55% 4.61%
Class A with Load 1.12% 1.54%
COMPARISON OF CHANGE IN VALUE
OF $10,000 INVESTMENT (Dollars in thousands)
[] Short Term Income (Class Y) $10.534
[] Short Term Income (Class A) $10,160
[] Merrill Lynch 1-Yr Treasury Index $10,615
[GRAPHIC OMITTED]
Line Graph -- Shown is a line graph comparing the performance of the Short Term
Income Fund to the Merrill Lynch 1-Yr Treasury Index.
Graph title -- Comparison of Change in Value of $10,000 Investment
The following represent the plot points for the graph:
<TABLE>
<CAPTION>
5/15/95 6/30/95 6/30/96
<S> <C> <C> <C>
Short Term Income, Class Y $10,000 $10,046 $10,534
Short Term Income, Class A 9,675 9,718 10,160
Merrill Lynch 1 Year 10,000 10,057 10,615
Treasury Index
</TABLE>
FOR THE PERIOD ENDED JUNE 30, 1996. PAST PERFORMANCE OF THE PORTFOLIO IS NOT
PREDICTIVE OF FUTURE PERFORMANCE. CLASS Y SHARES WERE OFFERED BEGINNING MAY 15,
1995 AND CLASS A SHARES WERE OFFERED BEGINNING MAY 17, 1995. THE MAXIMUM SALES
CHARGE ON CLASS A SHARES IS 3.25%.
22
<PAGE>
[] COREFUND
[] SHORT-INTERMEDIATE BOND FUND
The Class Y shares of the CoreFund Short-Intermediate Bond Fund
returned 5.05% for the one-year period ended June 30, 1996. This compared to a
return of 5.44% for the benchmark index, the Merrill Lynch 1-3 year Treasury
Index, during the same period.
The Fund's average weighted maturity was approximately 4.25 years for
the one-year period. Assets for the period increased from $57.1 million on June
30, 1995 to $162.9 million as of June 30, 1996. Included in this change is the
acquisition of the Conestoga Intermediate Income Fund. Please see the Notes to
the Financial Statements for further information regarding the merger.
Stronger economic statistics boosted expectations for rate increases
by the Federal Reserve during the period, causing interest rates to rise and
bond prices to decline. As a result, the Fund had a large concentration in
intermediate maturity securities, which underperformed both shorter and
longer-maturity assets as the yield curve flattened.
The Fund was overweighted in asset-backed securities (primarily home
equity loans), which was the best-performing asset class for the year. The
overweighting in select corporate securities contributed to the total return,
and helped offset the negative impact of the yield curve distribution.
The direction of Federal Reserve policy later this summer will set the
course for interest rates and yield curve shapes for the rest of the year.
Until the market settles into a range, we will hold the duration of the Fund
relatively constant, while adjusting the concentration along the yield curve to
capture areas of value.
QUICK FUND FACTS -- SHORT-INTERMEDIATE
INCEPTION DATE: FEBRUARY 3, 1992
PORTFOLIO SIZE: $162.9 MILLION
SHARES OUTSTANDING: 16,684,459 (Y&A COMBINED)
AVERAGE WEIGHTED MATURITY: 4.6 YEARS
QUALITY DIVERSIFICATION (AS OF JUNE 30, 1996)
[GRAPHIC OMITTED]
Pie Chart -- Shown is a pie chart depicting the Short-Inermediate Bond's
security quality ratings.
BA 2%
AAA 71%
AA 3%
A 11%
BAA 13%
MOODY'S RATING
% OF FUND INVESTMENTS
AVERAGE ANNUAL TOTAL RETURN1
1 Year 3 Year Inception
Class Y 5.05% 4.26% 5.26%
Class A without Load 4.79% 4.00% 4.60%
Class A with Load 1.39% 2.87% 3.60%
COMPARISON OF CHANGE IN VALUE
OF $10,000 INVESTMENT (Dollars in thousands)
[] Short-Intermediate Bond (Class Y) $12,533
[] Short-Intermediate Bond (Class A) Synthetic $12,037
[] Merrill Lynch 1-3 Yr Treasury Index $12,651
[GRAPHIC OMITTED]
Line Graph -- Shown is a line graph comparing the performance of the
Short-Intermediate Bond Fund to the Merrill Lynch 1-3 Yr Treasury Index.
Graph title -- Comparison of Change in Value of $10,000 Investment
<TABLE>
<CAPTION>
2/3/92 6/30/92 6/30/93 6/30/94 6/30/95 6/30/96
<S> <C> <C> <C> <C> <C> <C>
Short-Intermediate Bond, $10,000 $10,249 $11,059 $11,025 $11,931 $12,533
Class Y
Short-Intermediate Bond, 9,675 9,916 10,700 10,641 11,487 12,037
Class A (synthetic)
Merrill Lynch 1-3 Yr. 10,000 10,284 10,961 11,138 11,999 12,651
Treasury Index
</TABLE>
1 FOR THE PERIOD ENDED JUNE 30, 1996. PAST PERFORMANCE OF THE PORTFOLIO IS NOT
PREDICTIVE OF FUTURE PERFORMANCE. INDIVIDUAL CLASS A SHARES WERE OFFERED
BEGINNING JANUARY 4, 1993. THE PERFORMANCE SHOWN FOR SHORT-INTERMEDIATE BOND
PORTFOLIO CLASS A SHARES (SYNTHETIC) PRIOR TO THAT DATE IS BASED ON THE
PERFORMANCE OF INSTITUTIONAL CLASS Y SHARES, ADJUSTED TO REFLECT THE MAXIMUM
SALES CHARGE OF 3.25% FOR THE CLASS A SHARES. CLASS Y SHARES OF THE
SHORT-INTERMEDIATE BOND PORTFOLIO COMMENCED OPERATIONS ON FEBRUARY 3, 1992.
23
<PAGE>
MANAGERS'
DISCUSSION
OF
FUND
PERFORMANCE
(CONTINUED)
JUNE 30, 1996
[] SHORT-INTERMEDIATE BOND (CONTINUED)
Short-term corporate securities, having benefited from consistent
spread tightening during the year, are generally at historically narrow levels.
We anticipate reducing our total exposure to corporate issues during the year.
However, specific credits within the sector should still outperform
the market as a whole. Particular value is found in the home equity loan
market, which trades at wider spreads with very stable prepayment rates,
compared to mortgage backed securities or short-term corporate securities.
[] GOVERNMENT INCOME FUND
The Class Y shares of the CoreFund
Government Income Fund returned 4.09% for the year ended June 30, 1996. This
compared to a return of 4.98% for the benchmark index, the Salomon Brothers
Broad Investment Grade Bond Index, during the same period.
Assets for the period increased from
$12.7 million on June 30, 1995 to $15.2 million as of June 30, 1996.
The Fund maintained a neutral to slightly long maturity and duration
structure, relative to its
[GRAPHIC OMITTED]
PHOTOGRAPH OF CRAIG A. MOYER, PORTFOLIO MANAGER--SHORT-INTERMEDIATE BOND FUND
"THE FUND WAS OVER
WEIGHTED IN ASSET-
BACKED SECURITIES,
WHICH WAS THE BEST-
PERFORMING ASSET
CLASS FOR THE YEAR."
CRAIG A. MOYER
PORTFOLIO MANAGER
SHORT-INTERMEDIATE BOND FUND
24
<PAGE>
[] COREFUND
benchmark index. Duration ranged from 4.64 years to 5.40 years during the
period.
The twelve-month period brought all forms of extreme market conditions.
It started with a strong rally through late 1995, culminating in an easing of
interest rates by the Federal Reserve Board, and an inverted yield curve. The
period finished with a dramatic selloff in the spring of 1996, as a steepening
yield curve reflected expectations of a tighter monetary policy.
The wild swings in market sentiment were fueled by an unexpected surge
in consumer spending in early 1996, which caused stronger than expected job
growth and a heightening of inflationary fears. The performance of mortgage
securities was equally volatile during the period.
The Fund's relative performance during the period was hurt by its
longer-duration posture at the outset of 1996. This position was compounded by
a lack of exposure to the strong premium mortgage sector. The Fund's
performance was helped by its overweight in the mortgage sector, which served
to bolster the yield of the portfolio. The mortgage holdings were
opportunistically increased in the fall of 1995 from roughly 60% to 70%, and
then boosted again to 80% in the spring of 1996. The Fund continues to be
concentrated in current coupon and discount mortgages, which tend to be more
stable in volatile market conditions.
Looking to the third quarter, we expect slight upward pressure on
interest rates, which should culminate in a tightening of monetary policy of at
least 25%. The steeper curve and higher yields available in the market should
buffer performance from an otherwise volatile market. The Fund's strategy will
be to emphasize yield enhancement with its overweighted mortgage position,
while minimizing its interest rate bet with a neutral posture on duration.
QUICK FUND FACTS -- GOVERNMENT INCOME
INCEPTION DATE: APRIL 1, 1993
PORTFOLIO SIZE: $15.2 MILLION
SHARES OUTSTANDING: 1,582,774 (Y&A COMBINED)
AVERAGE WEIGHTED MATURITY: 8.7 YEARS
MATURITY DIVERSIFICATION (AS OF JUNE 30, 1996)
[GRAPHIC OMITTED]
% OF TOTAL PORTFOLIO INVESTMENTS
1-5 YEARS 25%
6-10 YEARS 63%
11-20 YEARS 4%
OVER 20 YEARS 8%
MATURITY IN YEARS
% OF FUND INVESTMENTS
AVERAGE ANNUAL TOTAL RETURN1
1 Year 3 Year Inception
Class Y 4.09% 4.23% 4.91%
Class A without Load 3.73% 4.02% 4.38%
Class A with Load 0.36% 2.88% 3.29%
Comparison of Change in Value
of $10,000 Investment (Dollars in thousands)
[] Government Income (Class Y) $11,589
[] Government Income (Class A) Synthetic $11,131
[] Salomon Broad Bond Index $11,905
[] Lehman Aggregate Bond Index $11,892
[GRAPHIC OMITTED]
Line Graph -- Shown is a line graph comparing the performance of the
Government Income Fund to the Salomon Broad Bond and Lehman Aggregate Bond
Index.
Graph title -- Comparison of Change in Value of $10,000 Investment
<TABLE>
<CAPTION>
04/30/93 6/30/93 6/30/94 6/30/95 6/30/96
<S> <C> <C> <C> <C> <C>
Government Income, Class Y $10,000 $10,235 $10,098 $11,134 $11,589
Government Income, Class A 9,675 9,890 9,735 10,730 11,131
(synthetic)
Salomon Broad Bond Index 10,000 10,196 10,076 11,340 11,905
Lehman Aggregate Bond Index 10,000 10,194 10,061 11,324 11,892
</TABLE>
1 FOR THE PERIOD ENDED JUNE 30, 1996. PAST PERFORMANCE OF THE PORTFOLIO IS NOT
PREDICTIVE OF FUTURE PERFORMANCE. INDIVIDUAL CLASS A SHARES WERE OFFERED
BEGINNING MAY 3, 1993. THE PERFORMANCE SHOWN FOR GOVERNMENT INCOME PORTFOLIO
CLASS A SHARES (SYNTHETIC) PRIOR TO THAT DATE IS BASED ON THE PERFORMANCE OF
INSTITUTIONAL CLASS Y SHARES, ADJUSTED TO REFLECT THE MAXIMUM SALES CHARGE OF
3.25% FOR THE CLASS A SHARES. CLASS Y SHARES OF THE GOVERNMENT INCOME PORTFOLIO
COMMENCED OPERATIONS ON APRIL 1, 1993.
25
<PAGE>
MANAGERS'
DISCUSSION
OF
FUND
PERFORMANCE
(CONTINUED)
JUNE 30, 1996
[] BOND FUND
The Class Y shares of the CoreFund Bond Fund returned 4.38% for the
one-year period ended June 30, 1996. This compared to a return of 5.01% for the
benchmark index, the Lehman Aggregate Bond Index, during the same period.
Assets for the period increased from $176.8 million on June 30, 1995
to $199.9 million as of June 30, 1996. Average maturity shortened from 9.9
years to 8.2 years during the one-year period.
Stronger economic statistics boosted expectations for rate increases
by the Federal Reserve during the period, causing interest rates to rise and
bond prices to decline. As a result, the Fund had a large concentration in
intermediate maturity securities, which underperformed both shorter and
longer-maturity assets as the yield curve flattened.
The Fund was overweighted in asset-backed securities (primarily home
equity loans), which was the best-performing asset class for the year. The
overweighting in select corporate securities contributed to the total return,
and helped offset the negative impact of the yield curve distribution.
The direction of Federal Reserve policy later this summer will set the
course for interest rates and yield curve shapes for the rest of the year.
Until the market settles into a range, we will hold the duration of the Fund
relatively constant, while adjusting the concentration along the yield curve to
capture areas of value.
Short-term corporate securities are generally at historically narrow
levels. We anticipate reducing the total exposure to corporate issues during
the year.
However, specific credits within the sector should still outperform
the market as a whole.
QUICK FUND FACTS -- BOND
INCEPTION DATE: FEBRUARY 28, 1990
PORTFOLIO SIZE: $199.9 MILLION
SHARES OUTSTANDING: 19,701,191 (Y&A COMBINED)
AVERAGE WEIGHTED MATURITY: 8.2 YEARS
QUALITY DIVERSIFICATION (AS OF JUNE 30, 1996)
[GRAPHIC OMITTED]
BA 2%
BAA 16%
A 6%
AA 2%
AAA 67%
NOT RATED 7%
MOODY'S RATING
% OF FUND INVESTMENTS
AVERAGE ANNUAL TOTAL RETURN1
1 Year 5 Year Inception
Class Y (Synthetic) 4.38% 7.34% 7.78%
Class A without Load 4.01% 7.28% 7.73%
Class A with Load 0.64% 6.57% 7.16%
COMPARISON OF CHANGE IN VALUE
OF $10,000 INVESTMENT (Dollars in thousands)
[] BOND (Class Y) Synthetic $16,078
[] BOND (Class A) $15,503
[] LEHMAN AGGREGATE BOND INDEX $17,076
[GRAPHIC OMITTED]
Line Graph -- Shown is a line graph comparing the performance of the Bond
Fund to the Lehman Aggregate Bond.
Graph title -- Comparison of Change in Value of $10,000 Investment
The following represent the plot points for the graph:
<TABLE>
<CAPTION>
2/28/90 6/30/90 6/30/91 6/30/92 6/30/93 6/30/94 6/30/95 6/30/96
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Bond, Class A $ 9,675 $ 9,932 $10,912 $12,464 $13,790 $13,492 $14,905 $15,503
Bond, Class Y 10,000 10,266 11,279 12,883 14,254 13,946 15,403 16,078
(Synthetic)
Lehman Brothers 10,000 10,373 11,482 13,095 14,639 14,447 16,261 17,076
Aggregate Bond
Index
</TABLE>
1 FOR THE PERIOD ENDED JUNE 30, 1996. PAST PERFORMANCE OF THE PORTFOLIO IS NOT
PREDICTIVE OF FUTURE PERFORMANCE. INSTITUTIONAL CLASS Y SHARES WERE OFFERED
BEGINNING FEBRUARY 21, 1995. THE PERFORMANCE SHOWN FOR BOND PORTFOLIO CLASS Y
SHARES (SYNTHETIC) PRIOR TO THAT DATE IS BASED ON THE PERFORMANCE OF INDIVIDUAL
CLASS A SHARES, WITHOUT THE SALES CHARGE FOR CLASS A SHARES. CLASS A SHARES OF
THE BOND PORTFOLIO COMMENCED OPERATIONS ON FEBRUARY 28, 1990.
26
<PAGE>
[] COREFUND
[] GLOBAL BOND FUND
The Class Y shares of the CoreFund
Global Bond Fund returned 8.12% for the one-year period ended June 30, 1996, as
compared to its benchmark index, the J.P. Morgan Global Government Bond Index
$US hedged, which returned 9.12% for the same period.
Assets for the period increased from
$27.1 million on June 30, 1995 to $33.2 million as of June 30, 1996. The
average weighted maturity of the Fund decreased from 8.04 years to 6.63 years
during the one-year period.
The past year was split into two distinct halves, in terms of market
attitudes. The first half was marked by apprehension over the possibility that
the U.S. economy would fall back into recession and drag other world economies
down with it. The second half brought an almost-overnight change, with
investors suddenly fearing above-trend growth that could lead to higher
inflation and an increase in interest rates.
The first half of the year, therefore, saw some upward progress for
bond markets, particularly in Europe, which has lagged the U.S. market. In the
second half of the Fund's year, however, market performance was mixed and
volatile.
We have generally taken a cautious view of all markets throughout the
year, and particularly of the U.S. market. Maturities have been kept very
short in the U.S. and longer in the more attractive core European markets.
We have also used over-the-counter options to take advantage of
interim rallies in the bond markets and to protect currency exposures during a
period of high currency volatility.
Overall, bonds offer fundamentally fair value at the present time.
Over the next six months, the market should offer even better opportunities to
lengthen maturity.
QUICK FUND FACTS -- GLOBAL BOND
INCEPTION DATE: DECEMBER 15, 1993
PORTFOLIO SIZE: $33.2 MILLION
SHARES OUTSTANDING: 3,418,170 (Y&A COMBINED)
AVERAGE WEIGHTED MATURITY: 6.6 YEARS
QUALITY DIVERSIFICATION (AS OF JUNE 30, 1996)
[GRAPHIC OMITTED]
Pie Chart -- Shown is a pie chart depicting the Global Bond Fund's
security quality ratings.
AAA 74%
AA 20%
A 5%
NOT RATED 1%
MOODY'S RATING
% OF FUND INVESTMENTS
AVERAGE ANNUAL TOTAL RETURN1
1 Year Inception
Class Y 8.12% 3.05%
Class A without Load 7.74% 2.77%
Class A with Load 4.27% 1.42%
COMPARISON OF CHANGE IN VALUE
OF $10,000 INVESTMENT (Dollars in thousands)
[] GLOBAL BOND (Class Y) $10,717
[] GLOBAL BOND (Class A) $10,307
[] J.P. MORGAN GLOBAL BOND INDEX $11,498
[GRAPHIC OMITTED]
Line Graph -- Shown is a line graph comparing the performance of the Global
Bond Fund to the JP Morgan Global Bond Index in U.S. Dollars, hedged.
Graph title -- Comparison of Change in Value of $10,000 Investment
The following represent the plot points for the graph:
<TABLE>
<CAPTION>
12/15/93 6/30/94 6/30/95 6/30/96
<S> <C> <C> <C> <C>
Global Bond, Class Y $10,000 $9,045 $ 9,923 $10,717
Global Bond, Class A 9,675 8,731 9,566 10,307
JPM Global Bond Index 10,000 9,489 10,537 11,498
</TABLE>
1 FOR THE PERIOD ENDED JUNE 30, 1996. PAST PERFORMANCE OF THE PORTFOLIO IS NOT
PREDICTIVE OF FUTURE PERFORMANCE. CLASS Y SHARES AND CLASS A SHARES WERE
OFFERED BEGINNING DECEMBER 15, 1993. THE MAXIMUM SALES CHARGE ON CLASS A
SHARES IS 3.25%.
27
<PAGE>
MANAGERS'
DISCUSSION
OF
FUND
PERFORMANCE
(CONTINUED)
JUNE 30, 1996
[] INTERMEDIATE MUNICIPAL BOND
The Class Y shares of the CoreFund Intermediate Municipal Bond Fund
returned 4.74% for the one-year period ended June 30, 1996. This compared with
a return of 5.54% for the benchmark index, the Lehman Brothers 7-Year Municipal
Bond Index, over the same period.
Growth in the total net assets of the Fund was essentially flat for
the fiscal year 1996. The average weighted maturity of the Fund decreased from
6.1 years to 5.4 years during the one-year period.
The municipal market was affected by several different factors during
the past year, including economic data, monetary policy, the tax reform issue,
and favorable technicals. Slow growth and low inflation prompted the Federal
Reserve to ease interest rates three times during the period (July and December
1995, and January 1996). As a result, yields declined sharply in the second
half of 1995, as well as in early 1996. However, tax reform fears dominated the
municipal market, and tax-exempt yields fell much less than yields in the
overall market.
[GRAPHIC OMITTED]
PHOTOGRAPH OF JOSEPH R. BAXTER, PORTFOLIO MANAGER -- MUNICIPAL BOND FUNDS
"IN THE PAST YEAR, TAX REFORM
FEARS DOMINATED THE MUNICIPAL
MARKET, AND TAX-EXEMPT YIELDS
FELL MUCH LESS THAN YIELDS IN
THE OVERALL MARKET."
JOSEPH R. BAXTER
PORTFOLIO MANAGER -- MUNICIPAL BOND FUNDS
28
<PAGE>
[] COREFUND
In January 1996, the Kemp Commission released its report on tax
reform.While the report endorsed reform, its vagueness diminished the market's
worst fears of radical change, and attracted participants back to the market.
These favorable factors prompted municipals to outperform in what was about to
become a rising rate environment. In mid-February, Chairman Greenspan's
Humphrey-Hawkins testimony, coupled with stronger-than-expected economic
indicators, raised doubts of any near-term Fed easings, and prompted market
corrections.
Presently, long bond yields near 6% are attracting retail interest,
while the market continues to find support from insurance companies. Adding to
demand were heavy redemptions from bond maturities and interest payments in
June. All this happened against a backdrop of diminishing supply, which
normally slows in a rising rate environment, as many deals are rate-sensitive.
These favorable technicals remained in place as the new fiscal year
began. The municipal market is expected to follow the general direction of
interest rates, while the favorable technicals will continue to aid its overall
performance. At these higher yield levels, we expect to participate in the
market, incrementally adding yield to the portfolio.
QUICK FUND FACTS -- INT. MUNICIPAL BOND
INCEPTION DATE: MAY 3, 1993
PORTFOLIO SIZE: $1.4 MILLION
SHARES OUTSTANDING: 142,927 (Y&A COMBINED)
AVERAGE WEIGHTED MATURITY: 5.4 YEARS
QUALITY DIVERSIFICATION (AS OF JUNE 30, 1996)
[GRAPHIC OMITTED]
Pie Chart -- Shown is a pie chart depicting the Intermediate Municipal
Bond Fund's security quality ratings.
AAA 54%
AA 22%
A 7%
NOT RATED 17%
MOODY'S RATING
% OF FUND INVESTMENTS
AVERAGE ANNUAL TOTAL RETURN1
1 Year 3 Year Inception
Class Y 4.74% 3.32% 3.58%
Class A without Load 4.48% 3.10% 3.32%
Class A with Load 1.09% 1.96% 2.23%
COMPARISON OF CHANGE IN VALUE
OF $10,000 INVESTMENT (Dollars in Thousands)
[] INTERMEDIATE MUNICIPAL (Class Y) $11,165
[] INTERMEDIATE MUNICIPAL (Class A) $10,719
[] LEHMAN 7-YR MUNI BOND INDEX $11,781
[GRAPHIC OMITTED]
Line Graph -- Shown is a line graph comparing the performance of the
Intermediate Municipal Bond Fund to the Lehman 7 Yr. Municipal Bond Index.
Graph title -- Comparison of Change in Value of $10,000 Investment
<TABLE>
<CAPTION>
04/30/93 6/30/93 6/30/94 6/30/95 6/30/96
<S> <C> <C> <C> <C> <C>
Intermediate Municipal, Class Y $10,000 $10,124 $10,097 $10,660 $11,165
Intermediate Municipal, Class A 9,675 9,782 9,732 10,259 10,719
Lehman 7 Yr. Muni Bond Index 10,000 10,183 10,311 11,163 11,781
</TABLE>
1 FOR THE PERIOD ENDED JUNE 30, 1996. PAST PERFORMANCE OF THE PORTFOLIO IS NOT
PREDICTIVE OF FUTURE PERFORMANCE. CLASS Y SHARES AND CLASS A SHARES WERE
OFFERED BEGINNING MAY 3, 1993. THE MAXIMUM SALES CHARGE ON CLASS A SHARES
IS 3.25%.
29
<PAGE>
MANAGERS'
DISCUSSION
OF
FUND
PERFORMANCE
(CONTINUED)
JUNE 30, 1996
[] PA MUNICIPAL BOND FUND
The Class Y shares of the CoreFund Pennsylvania Municipal Bond Fund
returned 6.02% for the one-year period ended June 30, 1996. This compared with
a return of 6.25% for the benchmark index, the Lehman Brothers Pennsylvania
Bond Index, for the same period.
Assets for the period increased from $2.6 million on June 30, 1995 to
$9.9 million as of June 30, 1996. Included in this change is the acquisition of
the Conestoga Pennsylvania Tax-Free Bond Fund. Please see the Notes to the
Financial Statements for further information regarding the merger.
Slow growth and low inflation prompted the Fed to ease interest rates
three times during the period (July and December 1995, and January 1996). As a
result, yields declined sharply in the second half of 1995, as well as in early
1996. However, tax reform fears dominated the municipal market, and tax-exempt
yields fell much less than yields in the overall market.
The 1996 Kemp Commission report endorsed reform, and its vagueness
diminished the market's worst fears of radical change, and attracted
participants back to the market. These favorable factors prompted municipals to
outperform in what was about to become a rising rate environment. In
mid-February, Chairman Greenspan's Humphrey-Hawkins testimony, coupled with
stronger-than-expected economic indicators, raised doubts of any near-term Fed
easings, and prompted market corrections.
Presently, long bond yields near 6% are attracting retail interest,
while the market continues to find support from insurance companies. The
municipal market is expected to follow the general direction of interest rates,
while the favorable technicals will continue to aid its overall performance.
QUICK FUND FACTS -- PA MUNICIPAL BOND
INCEPTION DATE: MAY 16, 1994
PORTFOLIO SIZE: $9.9 MILLION
SHARES OUTSTANDING: 966,880 (Y&A COMBINED)
AVERAGE WEIGHTED MATURITY: 11.1 YEARS
QUALITY DIVERSIFICATION (AS OF JUNE 30, 1996)
[GRAPHIC OMITTED]
Pie Chart -- Shown is a pie chart depicting the Pennsylvania Municipal Bond
Fund's security quality ratings.
AAA 60%
AA 13%
A 15%
NOT RATED 12%
MOODY'S RATING
% OF FUND INVESTMENTS
AVERAGE ANNUAL TOTAL RETURN1
1 Year Inception
Class Y 6.02% 6.42%
Class A without Load 5.76% 6.16%
Class A with Load 2.33% 4.50%
COMPARISON OF CHANGE IN VALUE
OF $10,000 INVESTMENT (Dollars in thousands)
[] PENNSYLVANIA MUNICIPAL BOND (Class Y) $11,298
[] PENNSYLVANIA MUNICIPAL BOND (Class A) $10,863
[] LEHMAN PENNSYLVANIA BOND INDEX $11,642
[GRAPHIC OMITTED]
Line Graph -- Shown is a line graph comparing the performance of the
Pennsylvania Municipal Bond Fund to the Lehman Pennsylvania Bond Index.
Graph title -- Comparison of Change in Value of $10,000 Investment
<TABLE>
<CAPTION>
5/16/94 6/30/94 6/30/95 6/30/96
<S> <C> <C> <C> <C>
Pennsylvania Muni Bond, Class Y $10,000 $9,913 $10,656 $11,298
Pennsylvania Muni Bond, Class A 9,675 9,577 10,272 10,863
Lehman New Pennsylvania Index 10,000 9,946 10,958 11,642
</TABLE>
1 FOR THE PERIOD ENDED JUNE 30, 1996. PAST PERFORMANCE OF THE PORTFOLIO IS NOT
PREDICTIVE OF FUTURE PERFORMANCE. CLASS Y SHARES AND CLASS A SHARES WERE
OFFERED BEGINNING MAY 16, 1994. THE MAXIMUM SALES CHARGE ON CLASS A SHARES
IS 3.25%.
30
<PAGE>
[] COREFUND
[] NJ MUNICIPAL BOND FUND
The Class Y shares of the CoreFund New Jersey Municipal Bond Fund returned
5.28% for the one-year period ended June 30, 1996. This compared with a return
of 6.12% for the benchmark index, the Lehman Brothers New Jersey Bond Index,
over the same period.
The Fund's assets remained stable over the fiscal year from approximately
$1.6 million on June 30, 1995 to approximately $1.6 million on June 30, 1996.
The average weighted maturity of the Fund changed from 13.3 years to 10.1 years
during the one-year period.
Slow growth and low inflation prompted the Fed to ease interest rates three
times during the period (July and December 1995, and January 1996). As a
result, yields declined sharply in the second half of 1995, as well as in early
1996. However, tax reform fears dominated the municipal market, and tax-exempt
yields fell much less than yields in the overall market.
The 1996 Kemp Commission report endorsed reform, and its vagueness
diminished the market's worst fears of radical change, and attracted
participants back to the market. These favorable factors prompted municipals to
outperform in what was about to become a rising rate environment. In
mid-February, Chairman Greenspan's Humphrey-Hawkins testimony, coupled with
stronger-than-expected economic indicators, raised doubts of any near-term Fed
easings, and prompted market corrections.
Presently, long bond yields near 6% are attracting retail interest, while
the market continues to find support from insurance companies. The municipal
market is expected to follow the general direction of interest rates, while the
favorable technicals will continue to aid its overall performance.
QUICK FUND FACTS -- NJ MUNICIPAL BOND
INCEPTION DATE: MAY 16, 1994
PORTFOLIO SIZE: $1.6 MILLION
SHARES OUTSTANDING: 160,843 (Y&A COMBINED)
AVERAGE WEIGHTED MATURITY: 10.1 YEARS
QUALITY DIVERSIFICATION (AS OF JUNE 30, 1996)
[GRAPHIC OMITTED]
AAA 32%
AA 49%
A 7%
NOT RATED 12%
MOODY'S RATING
% OF FUND INVESTMENTS
AVERAGE ANNUAL TOTAL RETURN1
1 Year Inception
Class Y 5.28% 5.89%
Class A without Load 4.93% 5.57%
Class A with Load 1.52% 3.92%
COMPARISON OF CHANGE IN VALUE
OF $10,000 INVESTMENT (Dollars in thousands)
[] NEW JERSEY MUNICIPAL BOND (CLASS Y)$11,212
[] NEW JERSEY MUNICIPAL BOND (CLASS A)$10,779
[] LEHMAN NEW JERSEY BOND INDEX $11,443
[GRAPHIC OMITTED]
Line Graph -- Shown is a line graph comparing the performance of the
New Jersey Municipal Bond Fund to the Lehman New Jersey Bond Index.
Graph title -- Comparison of Change in Value of $10,000 Investment
<TABLE>
<CAPTION>
5/16/94 6/30/94 6/30/95 6/30/96
<S> <C> <C> <C> <C>
New Jersey Muni Bond, Class Y $10,000 $9,930 $10,650 $11,212
New Jersey Muni Bond, Class A 9,675 9,615 10,273 10,779
Lehman New Jersey Bond Index 10,000 9,939 10,783 11,443
</TABLE>
1 FOR THE PERIOD ENDED JUNE 30, 1996. PAST PERFORMANCE OF THE PORTFOLIO IS NOT
PREDICTIVE OF FUTURE PERFORMANCE. CLASS Y SHARES AND CLASS A SHARES WERE
OFFERED BEGINNING MAY 16, 1994. THE MAXIMUM SALES CHARGE ON CLASS A SHARES
IS 3.25%.
31
<PAGE>
MANAGERS'
DISCUSSION
OF
FUND
PERFORMANCE
(CONTINUED)
JUNE 30, 1996
[] TREASURY RESERVE
The Class Y shares of the CoreFund
Treasury Reserve returned 5.20% for the one-year period ended June 30, 1996.
Class C (retail) shares returned 4.94% for the same period.
Assets for the period increased from $500.8 million on June 30, 1995
to $911.9 million as of June 30, 1996. Included in this change is the
acquisition of the Conestoga U.S. Treasury Securities Fund. Please see the
Notes to the Financial Statements for further information regarding the merger.
The average weighted maturity of the Fund increased from 47 to 57 days
during the one-year period, as Treasury securities in the six-month to one-year
range were purchased. The Federal Reserve Board decreased short-term interest
rates by a total of .75% over the course of the year, prompting an extension of
the portfolio to guard against further easing of rates.
As the fiscal year ended, however, the money market was factoring in a
.25% increase in short-term rates. Economic data at the end of the first half
was stronger than expected, prompting market consensus that the Federal Reserve
would move up rates at its August meeting.
To prepare for this expected adjustment, the average maturity of the
Fund was being lowered to the 45- to 50-day range, with purchases being made on
market weakness until clear direction emerged about the Federal Reserve's next
move.
QUICK FUND FACTS -- TREASURY RESERVE
INCEPTION DATE: NOVEMBER 21, 1988
PORTFOLIO SIZE: $911.9 MILLION
AVERAGE WEIGHTED MATURITY: 57 DAYS
SEVEN DAY YIELD: 4.84 (CLASS Y) 4.59 (CLASS C)
QUALITY DIVERSIFICATION (AS OF JUNE 30, 1996)
[GRAPHIC OMITTED]
PIE CHART -- Shown is a pie chart depicting the Treasury Reserve's
security quality ratings.
AAA 39%
NOT RATED* 61%
MOODY'S RATING
% OF FUND INVESTMENTS
PERFORMANCE (AS OF JUNE 30, 1996)
6-MONTH YIELD YIELD
TOTAL RETURN 7-DAY 30-DAY
(CUMULATIVE)(COMPOUNDED)
CLASS Y 2.44% 4.95% 4.82%
CLASS C 2.32% 4.69% 4.58%
IBC/DONOGHUE 2.30% 4.63% --
* These securities are collateralized by U.S. Government securities.
32
<PAGE>
[] COREFUND
[] CASH RESERVE
The Class Y shares of the CoreFund Cash Reserve returned 5.26% for the
year ended June 30, 1996. The Fund outperformed its benchmark index, the IBC
Donoghue All-Taxable Money Fund Average, which returned 5.18% for the same
period. For Series C shares from which a 12b-1 fee is deducted, the Fund's
annualized return was 5.00%.
Assets for the period increased from $527.9 million on June 30, 1995
to $809.9 million as of June 30, 1996. Included in this change is the
acquisition of the Conestoga Cash Management Fund. Please see the Notes to the
Financial Statements for further information regarding the merger.
The average weighted maturity (AWM) of the portfolio was adjusted
quarterly, to respond to changes in Federal Reserve Board policy and movement
of interest rates. At one point, the AWM was extended to 68 days, when
expectations were high that interest rates would decline. However, by the end
of June 1996, when upward pressure on short-term rates had increased, the AWM
was adjusted to 58 days. The Fund's current maturity target is 45 to 50 days.
Overall, the one-year period was marked by steady drops in short-term
rates. The Federal Reserve's Open Market Committee eased monetary
[GRAPHIC OMITTED]
PHOTOGRAPH OF ROSEMARY B. CROWLEY, PORTFOLIO MANAGER -- CASH RESERVE WITH
RONALD BRASTEN, PORTFOLIO MANAGER -- TREASURY RESERVE FUND
"OUR PORTFOLIO STRUCTURE FOR THE FUND
CONTINUES TO FAVOR COMMERCIAL PAPER, WHICH
OFFERS THE BEST ABSOLUTE VALUE."
ROSEMARY B. CROWLEY
PORTFOLIO MANAGER -- CASH RESERVE
33
<PAGE>
MANAGERS'
DISCUSSION
OF
FUND
PERFORMANCE
(CONTINUED)
JUNE 30, 1996
[] CASH RESERVE (CONTINUED)
policy in July 1995, December 1995, and January 1996, with each intervention
dropping short-term rates by .25%. By the end of the second quarter of 1996,
though, economic growth had forced the Committee to end its bias toward
tightening the money supply. The Committee's revised policy put upward
pressure on interest rates, and market prices reflected anticipation of a
.25% tightening.
Our portfolio structure for the Fund continues to favor commercial
paper, which offers the best absolute value. During periods where corporate
supply has dried up, U.S. Government agency discount notes have provided yield.
At the same time, these notes do not present diversification issues.
QUICK FUND FACTS -- CASH RESERVE
INCEPTION DATE: AUGUST 16, 1985
PORTFOLIO SIZE: $809.9 MILLION
AVERAGE WEIGHTED MATURITY: 51 DAYS
SEVEN DAY YIELD: 4.88 (CLASS Y) 4.63 (CLASS C)
QUALITY DIVERSIFICATION (AS OF JUNE 30, 1996)
[GRAPHIC OMITTED]
PIE CHART -- Shown is a pie chart depicting the Cash Reserve's security
quality ratings.
AAA 16%
AA 1.5%
A 0.5%
P-1 77%
NOT RATED 5%
MOODY'S RATING
% OF FUND INVESTMENTS
PERFORMANCE (AS OF JUNE 30, 1996)
6-MONTH YIELD YIELD
TOTAL RETURN 7-DAY 30-DAY
(CUMULATIVE)(COMPOUNDED)
CLASS Y 2.47% 5.00% 4.86%
CLASS C 2.35% 4.73% 4.61%
IBC/DONOGHUE 2.43% 4.92% --
34
<PAGE>
[] COREFUND
[] TAX-FREE RESERVE
The Class Y shares of the CoreFund Tax-Free Reserve returned 3.20% for
the one-year period ended June 30, 1996. The Fund outperformed its benchmark
index, the IBC Donoghue Tax-Free Average, which returned 3.175% for the same
period.
Assets for the period increased from $64.3 million on June 30, 1995 to
$107.0 million as of June 30, 1996. Included in this change is the acquisition
of the Conestoga Tax-Free Fund. Please see the Notes to the Financial
Statements for further information regarding the merger.
The average maturity of the Fund increased from 34 to 45 days during
the one-year period. Maturities were lengthened to lock in yield as interest
rates declined, and shortened when rates changed direction in March of 1996.
Current market sentiment suggests a strong likelihood of another rate hike
before the end of the year. The Fund's average maturity will be managed to
respond to future shifts in interest rates' direction.
QUICK FUND FACTS -- TAX-FREE RESERVE
INCEPTION DATE: APRIL 16, 1991
PORTFOLIO SIZE: $107.0 MILLION
AVERAGE WEIGHTED MATURITY: 45 DAYS
SEVEN DAY YIELD: 3.06 (CLASS Y) 2.81 (CLASS C)
QUALITY DIVERSIFICATION (AS OF JUNE 30, 1996)
[GRAPHIC OMITTED]
PIE CHART -- Shown is a pie chart depicting the Tax-Free Reserve's security
quality ratings.
AAA 6%
AA 11%
A 3%
P-1 35%
MIG1/VMIG1 28%
NOT RATED 17%
MOODY'S RATING
% OF FUND INVESTMENTS
PERFORMANCE (AS OF JUNE 30, 1996)
6-MONTH YIELD YIELD
TOTAL RETURN 7-DAY 30-DAY
(CUMULATIVE)(COMPOUNDED)
CLASS Y 1.51% 3.10% 3.05%
CLASS C 1.40% 2.85% 2.79%
IBC DONOGHUE 1.48% 2.94% --
35
<PAGE>
REPORT
OF
INDEPENDENT
AUDITORS
[] COREFUND
BOARD OF DIRECTORS AND SHAREHOLDERS
COREFUNDS, INC.
We have audited the accompanying statements of net assets of the Growth Equity
Fund, Equity Fund, Equity Index Fund, Special Equity Fund, International Growth
Fund, Balanced Fund, Government Income Fund, Short Term Income Fund,
Short-Intermediate Bond Fund, Intermediate Municipal Bond Fund, Bond Fund,
Pennsylvania Municipal Bond Fund, Cash Reserve, Treasury Reserve, and Tax-Free
Reserve and the schedules of investments and statements of assets and
liabilities of the Global Bond Fund and the New Jersey Municipal Bond Fund of
CoreFunds, Inc. (the "Fund") as of June 30, 1996, and the related statements of
operations for the period then ended, and for the Growth Equity Fund, Equity
Index Fund, International Growth Fund, Balanced Fund, Government Income Fund,
Short-Intermediate Bond Fund, Intermediate Municipal Bond Fund, Global Bond
Fund, Pennsylvania Municipal Bond Fund, New Jersey Municipal Bond Fund, Cash
Reserve, Treasury Reserve, and Tax-Free Reserve, the statements of changes in
net assets and the financial highlights for each of the periods presented
herein. These financial statements and financial highlights are the
responsibility of the Fund's management. Our responsibility is to express an
opinion on these financial statements and financial highlights based on
our audits. The statements of changes in net assets for the period ended
October 31, 1995 and the financial highlights for the period ended October 31,
1990 through October 31, 1995 for the Equity Fund, Special Equity Fund,
Bond Fund, and Short Term Income Fund were audited by other auditors whose
report dated December 8, 1995 expressed an unqualified opinion on those
statements and financial highlights.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included verification by examination of securities
held by the Custodian as of June 30, 1996 and confirmation of securities not
held by the Custodian by correspondence with others. An audit also includes
assessing the accounting principles used and significant estimates made
by management, as well as evaluating, the overall financial statement
presentation. We believe that our audits provide a reasonable basis for
our opinion.
In our opinion, the 1996 financial statements and financial highlights
referred to above present fairly, in all material respects, the financial
position of the Growth Equity Fund, Equity Fund, Equity Index Fund, Special
Equity Fund, International Growth Fund, Balanced Fund, Government Income Fund,
Short Term Income Fund, Short-Intermediate Bond Fund, Intermediate Municipal
Bond Fund, Bond Fund, Global Bond Fund, Pennsylvania Municipal Bond Fund, New
Jersey Municipal Bond Fund, Cash Reserve, Treasury Reserve, and Tax-Free
Reserve of the Fund at June 30, 1996 and the results of their operations for
the period then ended, and for the Growth Equity Fund, Equity Index Fund,
International Growth Fund, Balanced Fund, Government Income Fund,
Short-Intermediate Bond Fund, Intermediate Municipal Bond Fund, Global Bond
Fund, Pennsylvania Municipal Bond Fund, New Jersey Municipal Bond Fund, Cash
Reserve, Treasury Reserve, and Tax-Free Reserve, the changes in their net
assets and the financial highlights for each of the periods presented herein,
in conformity with generally accepted accounting principles.
Philadelphia, Pennsylvania
August 16, 1996
/s/Ernst & Young LLP
36
<PAGE>
STATEMENT
OF
NET ASSETS
AS OF
JUNE 30, 1996
EQUITY INDEX FUND
[GRAPHIC OMITTED]
Pie Chart -- Shown is a pie chart depicting the industry classification for the
Equity Index Fund. The following represent the plot points for the chart:
Industry Classification % of Total Portfolio Investment
Miscellaneous 2
Utilities 12
Transportation 2
Technology 11
Healthcare 10
Finance 13
Basic Materials 7
Capital Goods 8
Consumer Cyclicals 13
Consumer Staples 13
Energy 9
- -------------------------------------------------------
DESCRIPTION SHARES VALUE (000)
- -------------------------------------------------------
COMMON STOCKS--99.8%
AEROSPACE & DEFENSE -- 0.8%
Lockheed Martin 5,800 $ 487
Raytheon 8,900 459
Rockwell International 5,763 330
TRW 1,500 135
-----
1,411
-----
AGRICULTURE -- 0.1%
Pioneer Hi-Bred International 3,000 159
-----
AIR TRANSPORTATION -- 0.5%
AMR* 2,800 255
Delta Air Lines 2,500 208
Southwest Airlines 3,300 96
US Air Group* 15,300 275
-----
834
-----
AIRCRAFT -- 1.5%
Boeing 11,037 962
General Dynamics 1,700 105
McDonnell Douglas 8,200 398
Northrop Grumman 1,700 116
Parker Hannifin 2,850 121
Teledyne 3,700 134
Textron 2,000 160
United Technologies 4,300 495
-----
2,491
-----
APPAREL/TEXTILES -- 0.4%
Liz Claiborne 5,000 173
Nike, Class B 4,400 452
Russell 3,100 86
-----
711
-----
APPLIANCES -- 0.1%
Maytag 5,600 117
Whirlpool 1,700 84
-----
201
-----
- -------------------------------------------------------
DESCRIPTION SHARES VALUE (000)
- -------------------------------------------------------
AUTOMOTIVE -- 2.6%
Allied Signal 9,100 $ 520
Chrysler 13,100 812
Dana 4,600 143
Echlin 2,500 95
Fleetwood Enterprises 4,055 126
Ford Motor 36,900 1,195
General Motors 24,100 1,262
Paccar 1,500 74
Varity* 2,700 130
-----
4,357
-----
BANKS -- 7.4%
Banc One 13,444 457
Bank of Boston 2,900 144
Bank of New York 5,500 282
BankAmerica 12,800 970
Bankers Trust New York 1,800 133
Barnett Banks of Florida 2,200 134
Boatmens Bancshares 4,600 185
Chase Manhattan 13,466 951
Citicorp 16,800 1,388
Comerica 3,600 161
Fifth Third Bancorp 3,000 162
First Bank System 3,800 220
First Chicago 12,701 497
First Union 10,530 641
Fleet Financial Group 9,801 426
Golden West Financial 1,800 101
Great Western Financial 9,800 234
H.F. Ahmanson 10,000 270
J.P. Morgan 5,800 491
Keycorp 7,800 302
MBNA 4,950 141
Mellon Bank 5,700 325
National City 6,800 239
NationsBank 9,000 744
Norwest 10,900 380
PNC Bank 13,900 414
Republic New York 2,200 137
Suntrust Banks 8,400 311
U.S. Bancorp 4,300 155
UST 4,600 158
Wachovia 7,100 311
Wells Fargo 3,433 820
------
12,284
------
BEAUTY PRODUCTS -- 2.3%
Alberto Culver, Class B 3,200 148
Avon Products 3,200 144
Colgate Palmolive 4,246 360
Dial 3,300 94
Ecolab 3,300 109
Gillette 15,600 973
International Flavors
& Fragrances 2,500 119
Procter & Gamble 21,900 1,985
-----
3,932
-----
BROADCASTING, NEWSPAPERS & ADVERTISING-- 0.6%
Comcast, Class A 5,400 100
Interpublic Group 2,200 103
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
37
<PAGE>
STATEMENT
OF
NET ASSETS
AS OF
JUNE 30, 1996
EQUITY INDEX FUND (CONTINUED)
Tele-Communications, Class A* 18,900 $ 343
Viacom, Class B* 10,526 409
-----
955
-----
BUILDING & CONSTRUCTION -- 0.3%
Fluor 1,900 124
Foster Wheeler 3,300 148
Halliburton 2,600 144
McDermott International 3,400 71
-----
487
-----
BUILDING MATERIALS -- 0.1%
Owens Corning* 2,800 120
-----
CHEMICALS -- 3.4%
Air Products & Chemical 2,600 150
B.F. Goodrich 4,200 157
Dow Chemical 8,150 619
E.I. DuPont de Nemours 19,000 1,503
Eastman Chemical 1,900 116
FMC* 1,400 91
Great Lakes Chemical 5,100 317
Hercules 2,700 149
Lilly (Eli) 17,400 1,131
Monsanto 19,500 634
Nalco Chemical 6,900 217
Rohm & Haas 2,500 157
Sigma Aldrich 2,800 150
Union Carbide 3,400 135
W.R. Grace 3,100 220
-----
5,746
-----
COMMUNICATIONS EQUIPMENT -- 2.6%
Andrew * 3,100 167
Cisco Systems* 18,400 1,042
ITT* 3,600 239
ITT Industries 3,500 88
Motorola 19,000 1,195
Northern Telecom 7,300 397
Scientific-Atlanta 11,200 174
Sprint 14,000 588
Tellabs* 3,100 207
US West Media Group* 13,600 248
-----
4,345
-----
COMPUTERS & SERVICES -- 6.7%
3COM* 5,000 229
Amdahl* 8,100 87
Apple Computer* 7,600 160
Automatic Data Processing 7,400 286
Bay Networks* 5,500 142
Ceridian* 3,400 172
Compaq Computer* 8,700 428
Computer Associates International 6,900 492
Computer Sciences* 1,900 142
Digital Equipment* 3,900 175
DSC Communications* 6,591 198
EMC* 7,100 132
First Data 6,500 518
Harris Computer Systems 1,600 98
Hewlett Packard 16,400 1,634
International Business Machines 17,900 1,772
- -------------------------------------------------------
DESCRIPTION SHARES VALUE (000)
- -------------------------------------------------------
Microsoft* 19,800 $ 2,378
Novell* 8,300 115
Oracle Systems* 19,575 772
Pitney Bowes 5,000 239
Silicon Graphics* 4,600 110
Sun Microsystems* 5,600 330
Tandem Computers* 18,986 235
Tandy 2,000 95
Unisys* 23,500 167
------
11,106
------
CONTAINERS & PACKAGING -- 0.2%
Crown Cork & Seal 3,700 167
Newell 3,600 110
-----
277
-----
DRUGS -- 5.5%
Allergan 4,300 169
Alza* 3,400 93
American Home Products 19,800 1,190
Amgen* 7,600 410
Bristol-Myers Squibb 15,720 1,415
Merck 40,200 2,598
Pfizer 20,500 1,463
Pharmacia & Upjohn 16,255 721
Schering Plough 10,900 684
Warner Lambert 7,400 407
-----
9,150
-----
ELECTRICAL EQUIPMENT -- 3.2%
Emerson Electric 7,300 660
General Electric 53,800 4,654
Westinghouse Electric 11,900 223
-----
5,537
-----
ELECTRICAL SERVICES -- 2.9%
American Electric Power 4,300 183
Baltimore Gas & Electric 4,700 133
Carolina Power & Light 3,600 137
Central & South West 5,400 157
Cinergy 4,600 147
Consolidated Edison of New York 5,300 155
Dominion Resources of Virginia 5,500 220
DTE Energy 3,300 102
Duke Power 6,100 313
Edison International 13,400 236
Entergy 5,200 148
FPL Group 6,100 281
General Public Utilities 4,200 148
Houston Industries 5,800 143
Niagara Mohawk Power* 26,200 203
Northern States Power 3,700 183
Ohio Edison 4,100 90
Pacific Gas and Electric 11,500 267
Pacificorp 6,400 142
PECO Energy 5,000 130
PP&L Resources 5,500 130
Public Service Enterprise Group 5,500 151
Southern 20,100 495
Texas Utilities 7,300 312
Unicom 4,800 134
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
38
<PAGE>
[] COREFUND EQUITY FUNDS
- -------------------------------------------------------
DESCRIPTION SHARES VALUE (000)
- -------------------------------------------------------
Union Electric Power 2,300 $ 93
-----
4,833
-----
ENTERTAINMENT -- 1.1%
King World Productions* 2,600 95
Time Warner, Class A 11,700 459
Walt Disney 21,426 1,347
-----
1,901
-----
ENVIRONMENTAL SERVICES -- 0.5%
Browning Ferris Industries 5,900 171
Laidlaw Incorporated, Class B 14,000 142
WMX Technologies 15,200 498
-----
811
-----
FINANCIAL SERVICES -- 2.3%
American Express 14,400 642
Beneficial 2,400 135
Dean Witter Discover 5,200 298
Federal Home Loan Mortgage
Corporation 5,800 496
Federal National Mortgage
Association 35,800 1,199
Green Tree Financial 4,500 141
Household International 4,100 311
Merrill Lynch 4,600 300
Morgan Stanley Group 4,200 206
Salomon 2,500 110
-----
3,838
-----
FOOD, BEVERAGE & TOBACCO -- 8.9%
American Brands 7,600 345
Anheuser Busch 8,200 615
Archer Daniels Midland 15,672 300
Brown Forman, Class B 2,700 108
Campbell Soup 8,100 571
Coca Cola 80,800 3,949
ConAgra 7,300 331
Coors, Adolph, Class B 5,600 100
CPC International 5,400 389
General Mills 5,900 322
H.J. Heinz 10,650 323
Hershey Foods 2,000 147
Kellogg 6,100 447
Pepsico 50,400 1,783
Philip Morris 27,800 2,891
Quaker Oats 3,000 102
Ralston-Purina Group 2,300 147
Sara Lee 16,900 547
Seagram 10,300 346
Unilever 5,300 769
Whitman 5,100 123
Wrigley, William Jr. 2,600 131
------
14,786
------
GAS/NATURAL GAS -- 1.2%
Coastal 2,500 104
Columbia Gas Systems 3,500 182
Consolidated Natural Gas 2,100 110
Enron 7,300 298
Nicor 3,700 105
- -------------------------------------------------------
DESCRIPTION SHARES VALUE (000)
- -------------------------------------------------------
Noram Energy 17,800 $ 194
Oneok 5,900 148
Pacific Enterprises 3,800 113
Panenergy 4,200 138
Peoples Energy 4,100 137
Sonat 6,800 306
Williams 2,500 124
-----
1,959
-----
GLASS PRODUCTS -- 0.4%
Corning 6,100 234
PPG Industries 7,300 356
-----
590
-----
HOTELS & LODGING -- 0.3%
Harrah's Entertainment* 8,200 231
Hilton Hotels 1,100 124
Marriott International 2,900 156
-----
511
-----
HOUSEHOLD FURNITURE & FIXTURES-- 0.5%
Armstrong World Industries 1,600 92
Illinois Tool Works 4,100 277
Masco 3,500 106
Sherwin Williams 2,300 107
Snap-On Tools 2,700 128
Stanley Works 3,600 107
-----
817
-----
HOUSEHOLD PRODUCTS -- 0.5%
Clorox 2,900 257
National Service Industries 3,000 117
Rubbermaid 6,300 172
Tupperware* 5,700 241
-----
787
-----
INSURANCE -- 3.9%
Aetna Life & Casualty 4,500 322
Alexander & Alexander Services 4,400 87
Allstate 13,000 593
American General 5,400 196
American International Group 15,268 1,506
AON 3,500 178
Chubb 6,600 329
Cigna 2,900 342
General Re 2,400 365
ITT Hartford Group 3,100 165
Jefferson-Pilot 2,100 108
Lincoln National 2,100 97
Loews 3,400 268
Marsh and McLennan 1,700 164
Providian 2,300 99
Safeco 2,800 99
St. Paul 2,827 151
Torchmark 5,400 236
Transamerica 1,600 131
Travelers 14,400 657
Unum 1,700 106
USF&G 5,500 90
USLife 3,900 128
-----
6,417
-----
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
39
<PAGE>
STATEMENT
OF
NET ASSETS
AS OF
JUNE 30, 1996
EQUITY INDEX FUND (CONTINUED)
- -------------------------------------------------------
DESCRIPTION SHARES VALUE (000)
- -------------------------------------------------------
LUMBER & WOOD PRODUCTS -- 0.2%
Georgia Pacific 2,700 $ 192
Potlatch 2,100 82
-----
274
-----
MACHINERY -- 1.2%
Black & Decker 3,500 135
Brunswick 3,500 70
Case 3,000 144
Caterpillar 5,900 400
Crane 3,100 127
Deere 7,800 312
Dover 2,800 129
Dresser Industries 3,900 115
Harnischfeger Industries 3,900 130
Ingersoll Rand 2,400 105
Tenneco 5,000 256
Timken 2,500 97
-----
2,020
-----
MEASURING DEVICES -- 0.4%
General Signal 6,400 242
Honeywell 2,900 158
Johnson Controls 1,500 104
Millipore 3,400 142
Pall 4,500 109
-----
755
-----
MEDICAL PRODUCTS & SERVICES-- 4.4%
Abbott Labs 26,000 1,131
Bausch & Lomb 2,000 85
Baxter International 7,800 369
Becton Dickinson 1,900 152
Beverly Enterprises* 19,600 235
Biomet* 7,400 106
Boston Scientific* 4,300 193
C.R. Bard 4,200 143
Columbia/HCA Healthcare 13,900 742
Community Psychiatric Centers* 16,900 161
Humana* 4,800 86
Johnson & Johnson 43,400 2,148
Mallinckrodt Group 3,300 128
Manor Care 3,900 154
Medtronic 8,000 448
Shared Medical Systems 2,400 154
St. Jude Medical 3,300 111
Tenet Healthcare* 4,100 88
U.S. Healthcare 3,600 198
U.S. Surgical 5,500 170
United Healthcare 5,100 258
-----
7,260
-----
METALS & MINING -- 0.9%
Alcan Aluminum 5,000 153
Aluminum Company of America 5,200 298
Asarco 3,300 91
Cyprus Amax Minerals 7,400 167
Engelhard 3,900 90
Freeport-McMoran Copper &
Gold, Class B 6,000 191
- -------------------------------------------------------
DESCRIPTION SHARES VALUE (000)
- -------------------------------------------------------
Inco 2,600 $ 84
Newmont Mining 1,900 94
Phelps Dodge 1,600 100
Reynolds Metals 1,500 78
Santa Fe Pacific Gold 9,000 127
-----
1,473
-----
MISCELLANEOUS BUSINESS SERVICES-- 0.1%
Ogden 8,900 161
-----
MISCELLANEOUS CHEMICAL PRODUCTS-- 0.2%
Morton International 3,300 123
Raychem 1,900 136
-----
259
-----
MISCELLANEOUS CONSUMER SERVICES-- 0.1%
H & R Block 2,400 78
Service International 2,900 167
-----
245
-----
MISCELLANEOUS MANUFACTURING -- 0.5%
Minnesota Mining &
Manufacturing 12,800 883
-----
PAPER & PAPER PRODUCTS -- 1.7%
Alco Standard 3,600 163
Avery Dennison 2,300 126
Bemis 3,500 123
Champion International 2,200 92
International Paper 12,035 444
James River 3,200 84
Kimberly Clark 10,752 831
Mead 1,600 83
Moore 7,600 143
Stone Container 3,800 52
Temple Inland 2,400 112
Union Camp 1,550 76
Westvaco 3,150 94
Weyerhaeuser 6,006 255
Willamette Industries 1,900 113
-----
2,791
-----
PETROLEUM REFINING -- 8.9%
Amerada Hess 2,100 113
Amoco 17,500 1,267
Ashland 2,100 83
Atlantic Richfield 5,000 592
Baker Hughes 4,000 132
Burlington Resources 2,900 125
Chevron 20,500 1,209
Enserch 6,600 144
Exxon 39,900 3,466
Helmerich and Payne 6,600 242
Kerr-McGee 1,500 91
Louisiana Land & Exploration 3,100 179
Mobil 12,700 1,424
Occidental Petroleum 9,900 245
Oryx Energy* 8,400 136
Pennzoil 4,700 217
Phillips Petroleum 7,200 301
Royal Dutch Petroleum 17,800 2,737
Santa Fe Energy Resources* 7,300 87
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
40
<PAGE>
[] COREFUND EQUITY FUNDS
- -------------------------------------------------------
DESCRIPTION SHARES VALUE (000)
- -------------------------------------------------------
Schlumberger 7,400 $ 623
Sun 5,200 158
Texaco 8,500 713
Unocal 6,400 216
USX Marathon Group 6,500 131
Western Atlas* 3,500 204
------
14,835
------
PHOTOGRAPHIC EQUIPMENT & SUPPLIES-- 0.9%
Eastman Kodak 10,800 839
Polaroid 2,300 105
Xerox 10,800 578
-----
1,522
-----
PRECIOUS METALS -- 0.4%
Barrick Gold 12,000 326
Echo Bay Mines 9,100 98
Homestake Mining 6,800 116
Placer Dome Group 5,400 129
-----
669
-----
PRINTING & PUBLISHING -- 0.9%
American Greetings, Class A 3,200 87
Deluxe 2,500 89
Dow Jones 5,600 234
Gannett 4,800 339
Knight-Ridder 1,500 109
McGraw-Hill 2,200 101
Meredith 3,000 125
New York Times, Class A 3,200 104
R.R.Donnelly & Sons 3,200 112
Times Mirror, Class A 3,900 170
Tribune 1,500 109
-----
1,579
-----
PROFESSIONAL SERVICES -- 0.2%
Dun & Bradstreet 4,700 294
-----
RAILROADS -- 1.0%
Burlington Northern Santa Fe 5,464 442
Conrail 1,800 119
CSX 6,200 299
Norfolk Southern 4,600 390
Union Pacific 6,300 440
-----
1,690
-----
RESTAURANTS -- 0.8%
Darden Restaurants 11,800 127
McDonald's 22,400 1,047
Wendy's International 5,900 110
-----
1,284
-----
RETAIL -- 5.4%
Albertson's 6,400 265
American Stores 3,200 132
Charming Shoppes* 35,000 247
Circuit City Stores 3,000 108
Dayton-Hudson 2,600 268
Dillard Department Stores,
Class A 2,700 99
- -------------------------------------------------------
DESCRIPTION SHARES VALUE (000)
- -------------------------------------------------------
Federated Department Stores* 5,700 $ 195
Gap 9,600 308
Giant Food, Class A 3,900 140
Harcourt General 2,300 115
Hasbro 2,400 86
Home Depot 15,266 824
J.C. Penney 6,500 341
Jostens 6,000 118
K Mart* 10,000 124
Kroger* 3,100 122
Limited 9,500 204
Longs Drug Stores 2,900 129
Lowes 3,500 126
Mattel 6,250 179
May Department Stores 6,900 302
Melville 6,400 259
Mercantile Stores 2,500 147
Nordstrom 1,800 80
Pep Boys - Manny, Moe & Jack 3,226 110
Price/Costco* 4,900 106
Reebok International 7,300 245
Rite Aid 3,700 110
Sears Roebuck 11,500 559
TJX Companies 6,700 226
Toys R Us* 6,500 185
Tyco International 3,400 139
Wal Mart Stores 73,600 1,868
Walgreen 7,600 255
Winn Dixie Stores 3,400 120
Woolworth* 7,500 169
-----
9,010
-----
RUBBER & PLASTIC -- 0.2%
Goodyear Tire & Rubber 5,380 260
-----
260
-----
SEMI-CONDUCTORS/INSTRUMENTS-- 1.8%
Advanced Micro Devices* 7,500 102
AMP 6,200 249
Applied Materials* 4,600 140
Intel 26,300 1,931
LSI Logic* 4,000 104
Micron Technology 5,900 153
National Semiconductor* 5,600 87
Texas Instruments 5,200 259
-----
3,025
-----
SPECIALTY MACHINERY -- 0.1%
Cooper Industries 2,600 108
-----
108
-----
STEEL & STEEL WORKS -- 0.2%
Bethlehem Steel* 5,900 70
Nucor 2,000 101
USX U.S. Steel Group 1,900 54
Worthington Industries 4,600 96
-----
321
-----
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
41
<PAGE>
STATEMENT
OF
NET ASSETS
AS OF
JUNE 30, 1996
EQUITY INDEX FUND (CONCLUDED)
- -------------------------------------------------------
DESCRIPTION SHARES VALUE (000)
- -------------------------------------------------------
TECHNOLOGY, SERVICES -- 0.2%
Cabletron Systems* 2,000 $ 137
CUC International* 5,000 178
-----
315
-----
TELEPHONES & TELECOMMUNICATION-- 7.5%
AT&T 52,736 3,270
Airtouch Communications* 19,100 540
Alltel 5,500 169
Ameritech 18,300 1,087
Bell Atlantic 13,200 841
Bellsouth 33,900 1,437
General Instrument* 5,800 167
GTE 31,600 1,414
MCI Communications 20,158 517
NYNEX 12,600 598
Pacific Telesis Group 15,600 526
SBC Telecommunications 22,176 1,092
US West 13,600 433
Worldcom* 6,000 332
------
12,423
------
TRUCKING -- 0.2%
Caliber System 1,300 44
Cummins Engine 1,900 77
Roadway Express 650 9
Ryder System 5,000 141
-----
271
-----
WHOLESALE -- 0.6%
Fleming Companies 17,000 244
Genuine Parts 2,800 128
Praxair 3,500 148
Super-Valu 8,100 255
Sysco 4,100 140
W.W. Grainger 1,200 93
-------
1,008
-------
TOTAL COMMON STOCKS
(Cost $122,974) 166,088
-------
- -------------------------------------------------------
DESCRIPTION PAR (000) VALUE (000)
- -------------------------------------------------------
REPURCHASE AGREEMENTS--0.3%
Aubrey Lanston 5.40%, dated
06/28/96, matures 07/01/96,
repurchase price $204,092
(collateralized by U.S. Treasury
Bill, par value $220,000, 5.68%,
06/26/97; market value
$208,080) $204 $ 204
Hong Kong Shanghai Bank 5.42%,
dated 06/28/96, matures 07/01/96,
repurchase price $203,092
(collateralized by U.S. Treasury
Note, par value $200,000,
6.00%, 12/31/97;
market value $206,090) 203 203
--------
TOTAL REPURCHASE AGREEMENTS
(Cost $407) 407
--------
TOTAL INVESTMENTS -- 100.1%
(Cost $123,381) 166,495
--------
OTHER ASSETS AND LIABILITIES,
NET -- (0.1%) (145)
--------
NET ASSETS:
Portfolio Shares ($0.001 par value -
500 million authorized) based on
5,842,895 outstanding shares 121,761
Accumulated Net Realized Gain
on Investments 1,478
Net Unrealized Appreciation on
Investments 43,114
Distributions in Excess of Net
Investment Income (3)
--------
TOTAL NET ASSETS -- 100.0% $166,350
========
NET ASSET VALUE & REDEMPTION PRICE
PER SHARE $28.47
========
* NON - INCOME PRODUCING SECURITY
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
42
<PAGE>
[] COREFUND EQUITY FUNDS
EQUITY FUND
[GRAPHIC OMITTED]
Pie Chart -- Shown is a pie chart depicting the industry classification for the
Equity Fund. The following represent the plot points for the chart:
Industry Classification % of Total Portfolio Investment
Miscellaneous 2
Utilities 15
Transportation 1
Technology 13
Healthcare 13
Finance 14
Basic Materials 6
Capital Goods 9
Consumer Cyclicals 8
Consumer Staples 10
Energy 9
- -------------------------------------------------------
DESCRIPTION SHARES VALUE (000)
- -------------------------------------------------------
COMMON STOCKS -- 96.6%
AIRCRAFT -- 2.4%
Boeing 60,000 $ 5,228
McDonnell Douglas 60,000 2,910
Textron 30,000 2,396
-------
10,534
-------
APPAREL/TEXTILES -- 0.2%
Burlington Industries* 49,771 703
-------
AUTOMOTIVE -- 3.0%
Allied Signal 90,775 5,186
Ford Motor 108,300 3,506
Magna International, Class A 90,000 4,140
-------
12,832
-------
BANKS -- 5.6%
Bank of Boston 130,000 6,435
Chase Manhattan 110,000 7,769
NationsBank 52,500 4,338
PNC Bank 165,500 4,923
-------
23,465
-------
BEAUTY PRODUCTS -- 0.8%
Owens-Corning 77,500 3,333
-------
CHEMICALS -- 3.7%
Hercules 20,000 1,105
IMC Global 120,000 4,515
Lilly, Eli 80,000 5,200
Monsanto 99,000 3,217
Sigma Aldrich 33,100 1,771
-------
15,808
-------
COMMUNICATIONS EQUIPMENT -- 1.1%
ITT Industries 47,500 1,193
Motorola 58,700 3,691
-------
4,884
-------
- -------------------------------------------------------
DESCRIPTION SHARES VALUE (000)
- -------------------------------------------------------
COMPUTERS & SERVICES -- 7.1%
Bay Networks* 65,000 $ 1,674
Compaq Computer* 57,500 2,832
Computer Associates Interational 50,000 3,563
Digital Equipment* 45,000 2,025
Hewlett Packard 28,500 2,839
International Business Machines 115,000 11,385
Microsoft* 43,500 5,225
Quantum* 49,700 727
-------
30,270
-------
CONTAINERS & PACKAGING -- 0.5%
Ball 67,500 1,941
-------
DRUGS -- 9.3%
Alza* 67,100 1,837
Biogen* 110,000 6,036
Caremark International 273,200 6,898
Elan (ADR)* 79,300 4,530
Ivax 185,000 2,937
Merck 195,000 12,602
Mylan Laboratories 273,200 4,713
-------
39,553
-------
ELECTRICAL SERVICES -- 5.1%
Central & South West 124,200 3,602
Cinergy 135,000 4,320
Consolidated Edison of
New York 145,000 4,241
Edison International 175,000 3,084
Unicom 235,000 6,551
-------
21,798
-------
ELECTRONICS -- 0.6%
Philips Electronics (ADR) 75,000 2,447
-------
ENVIRONMENTAL SERVICES -- 0.8%
Browning Ferris Industries 125,000 3,625
-------
FINANCIAL SERVICES -- 1.9%
Mercury Finance 330,000 4,208
Repsol (ADR) 115,000 3,996
-------
8,204
-------
FOOD, BEVERAGE & TOBACCO -- 8.1%
Canandaigua Wine Class A* 112,500 3,375
Chiquita Brands International 72,500 942
Nabisco Holdings Class A 152,500 5,395
Philip Morris 195,000 20,280
RJR Nabisco Holdings 155,000 4,805
-------
34,797
-------
GAS/NATURAL GAS -- 1.4%
Noram Energy 400,000 4,350
Panenergy 45,500 1,496
-------
5,846
-------
INSURANCE -- 6.6%
Aetna Life & Casualty 35,000 2,503
American International Group 40,000 3,945
Equitable 215,000 5,348
ITT Hartford Group 45,000 2,396
Travelers 310,000 14,144
--------
28,336
--------
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
43
<PAGE>
STATEMENT
OF
NET ASSETS
AS OF
JUNE 30, 1996
EQUITY FUND (CONTINUED)
- -------------------------------------------------------
DESCRIPTION SHARES VALUE (000)
- -------------------------------------------------------
MACHINERY -- 5.4%
Baker Hughes 90,000 $ 2,959
Brunswick 50,300 1,006
Case 45,000 2,160
Caterpillar 42,000 2,845
General Electric 125,000 10,813
Texas Instruments 62,500 3,117
---------
22,900
---------
MEDICAL PRODUCTS & SERVICES-- 2.3%
Beverly Enterprises* 136,600 1,639
FHP International* 35,000 958
Foundation Health* 75,000 2,691
Medpartners/Mullikin* 179,800 3,753
United States Surgical 19,800 614
---------
9,655
---------
METALS & MINING -- 1.5%
Phelps Dodge 28,000 1,747
Potash of Saskatchewan 70,300 4,657
---------
6,404
---------
PAPER & PAPER PRODUCTS -- 0.7%
Kimberly Clark 38,000 2,936
---------
PETROLEUM & FUEL PRODUCTS -- 0.2%
Sonat Offshore Drilling 13,100 662
---------
PETROLEUM REFINING -- 7.2%
British Petroleum (ADR) 60,490 6,465
Burlington Resources 85,000 3,655
Kerr-McGee 37,500 2,283
Mobil 92,500 10,371
Pennzoil 40,000 1,850
USX Marathon Group 175,000 3,522
USX U.S. Steel Group 85,400 2,423
---------
30,569
---------
PHOTOGRAPHIC EQUIPMENT & SUPPLIES -- 0.9%
Xerox 72,000 3,852
---------
RAILROADS -- 0.9%
CSX 45,000 2,171
Union Pacific 25,000 1,747
---------
3,918
---------
REAL ESTATE -- 0.8%
Developers Diversified Realty 70,000 2,231
Kimco Realty 37,500 1,059
---------
3,290
---------
RESTAURANTS -- 1.2%
Darden Restaurants* 400,000 4,300
Vicorp Restaurants* 61,534 754
---------
5,054
--------
RETAIL -- 4.6%
Borders Group* 120,000 3,870
CML Group 275,000 1,169
General Nutrition* 98,550 1,725
Kroger* 100,000 3,950
- -------------------------------------------------------
DESCRIPTION SHARES/PAR (000) VALUE (000)
- -------------------------------------------------------
Lowes 155,000 $ 5,599
Pep Boys - Manny, Moe & Jack 88,900 3,022
Staples* 16,400 320
---------
19,655
---------
RUBBER & PLASTIC -- 0.6%
Goodyear Tire & Rubber 49,000 2,364
---------
SEMI-CONDUCTORS/INSTRUMENTS -- 1.9%
Intel 92,500 6,793
Silicon Valley Group* 80,000 1,500
---------
8,293
---------
SPECIALTY MACHINERY -- 0.7%
Westinghouse Electric 150,000 2,812
---------
TECHNOLOGY, SERVICES -- 0.7%
Cabletron Systems* 43,000 2,951
---------
TELEPHONES & TELECOMMUNICATION -- 7.9%
AT&T 207,500 12,865
Airtouch Communications* 225,000 6,356
BellSouth 140,000 5,932
Cellular Communications,
Series A* 49,339 2,621
Qualcomm* 115,000 6,109
---------
33,883
---------
WHOLESALE -- 0.9%
Praxair 95,700 4,043
---------
TOTAL COMMON STOCKS
(Cost $367,903) 411,617
---------
PREFERRED STOCK -- 0.5%
PRINTING & PUBLISHING -- 0.5%
News (ADR) 110,000 2,214
---------
TOTAL PREFERRED STOCK
(Cost $2,126) 2,214
--------
REPURCHASE AGREEMENTS -- 3.1%
Aubrey Lanston 5.40%, dated 06/28/96, matures
07/01/96, repurchase price
$6,462,907 (collateralized by
U.S. Treasury Bill, par value
$6,975,000, 5.68%, matures
06/26/97; market value
$6,597,077) $6,460 6,460
Sanwa Bank
5.40%, dated 06/28/96, matures
07/01/96, repurchase price
$6,462,907 (collateralized by
U.S. Treasury Note, par value
$6,435,000, 5.875%, matures
07/31/97; market value
$6,589,346) 6,460 6,460
---------
TOTAL REPURCHASE AGREEMENTS
(Cost $12,920) 12,920
---------
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
44
<PAGE>
[] COREFUND EQUITY FUNDS
- -------------------------------------------------------
DESCRIPTION VALUE (000)
- -------------------------------------------------------
TOTAL INVESTMENTS -- 100.2%
(Cost $382,949) $426,751
--------
OTHER ASSETS AND LIABILITIES,
NET -- (0.2%) (749)
--------
NET ASSETS:
Portfolio Shares - Class Y
($0.001 par value - 50
million authorized) based on
24,032,368 outstanding shares 358,275
Portfolio Shares - Class A
($0.001 par value - 50
million authorized) based on
646,911 outstanding shares 8,010
Accumulated Net Realized Gain
on Investments 15,934
Net Unrealized Appreciation on
Investments 43,802
Distributions in excess of Net
Investment Income (19)
---------
TOTAL NET ASSETS -- 100.0% $426,002
=========
NET ASSET VALUE & REDEMPTION PRICE
PER SHARE
CLASS Y $17.26
=========
CLASS A $17.28
=========
* NON-INCOME PRODUCING SECURITY
ADR -- AMERICAN DEPOSITORY RECEIPT
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
GROWTH EQUITY FUND
[GRAPHIC OMITTED]
Pie Chart -- Shown is a pie chart depicting the industry classification for the
Growth Equity Fund. The following represent the plot points for the chart:
Industry Classification % of Total Portfolio Investment
Miscellaneous 2
Utilities 6
Technology 30
Healthcare 17
Finance 11
Capital Goods 4
Consumer Cyclicals 13
Consumer Staples 16
Energy 1
- -------------------------------------------------------
DESCRIPTION SHARES VALUE (000)
- -------------------------------------------------------
COMMON STOCKS--97.1%
BANKS -- 5.8%
Barnett Banks of Florida 35,000 $ 2,135
Citicorp 22,000 1,818
J.P. Morgan 24,000 2,031
Norwest 35,000 1,221
---------
7,205
---------
BEAUTY PRODUCTS -- 1.9%
Colgate Palmolive 28,000 2,373
---------
COMMUNICATIONS EQUIPMENT -- 8.8%
Ascend Communications* 21,000 1,181
Cascade Communications* 27,200 1,850
Cisco Systems* 43,900 2,486
Glenayre Technologies* 45,037 2,252
Motorola 18,800 1,182
U.S. Robotics* 22,212 1,899
---------
10,850
---------
COMPUTERS & SERVICES -- 15.4%
Computer Sciences* 30,494 2,279
CUC International* 66,000 2,343
DST Systems* 3,313 106
First Data 16,500 1,314
HBO 24,000 1,626
Microsoft* 15,016 1,804
Oracle Systems* 69,124 2,726
Parametric Technology* 56,200 2,438
Paychex 54,525 2,624
Peoplesoft* 24,000 1,710
---------
18,970
---------
DRUGS -- 12.0%
American Home Products 44,200 2,658
Amgen* 41,864 2,261
Merck 38,700 2,501
Schering Plough 40,892 2,566
SmithKline Beecham PLC (ADR) 48,550 2,640
Warner Lambert 40,000 2,200
---------
14,826
---------
45
<PAGE>
STATEMENT
OF
NET ASSETS
AS OF
JUNE 30, 1996
GROWTH EQUITY FUND (CONTINUED)
- -------------------------------------------------------
DESCRIPTION SHARES VALUE (000)
- -------------------------------------------------------
ELECTRICAL SERVICES -- 1.0%
Texas Utilities 29,000 $ 1,240
---------
ENTERTAINMENT -- 5.5%
Circus Circus Enterprises* 48,253 1,978
Hilton Hotels 14,000 1,575
International Game Technology 50,660 855
Mirage Resorts* 43,486 2,348
---------
6,756
---------
FINANCIAL SERVICES -- 3.1%
American Express 48,000 2,142
Federal National Mortgage
Association 49,656 1,663
---------
3,805
---------
FOOD, BEVERAGE & TOBACCO -- 11.0%
Coca Cola 58,600 2,864
CPC International 27,100 1,951
Hershey Foods 30,000 2,201
PepsiCo 76,900 2,720
Sara Lee 118,500 3,836
---------
13,572
---------
HEALTHCARE SERVICES -- 1.2%
Health Management Associates,
Class A* 74,025 1,499
---------
HOUSEHOLD PRODUCTS -- 2.2%
Gillette 42,800 2,670
---------
INSURANCE -- 1.5%
American International Group 18,400 1,815
---------
MACHINERY -- 4.3%
GE 33,589 2,905
Illinois Tool Works 35,000 2,367
---------
5,272
---------
MEDICAL PRODUCTS -- 2.0%
Johnson & Johnson 49,000 2,426
---------
MISCELLANEOUS CONSUMER SERVICES -- 2.2%
Service International 47,000 2,703
---------
PETROLEUM REFINING -- 1.0%
Schlumberger 15,100 1,272
---------
RETAIL -- 4.8%
Dayton-Hudson 24,000 2,475
Nordstrom 24,600 1,095
Walgreen 70,000 2,345
---------
5,915
---------
RUBBER & PLASTIC -- 0.2%
Rubbermaid 9,729 265
---------
- -------------------------------------------------------
DESCRIPTION SHARES/PAR (000) VALUE (000)
- -------------------------------------------------------
TELEPHONES & TELECOMMUNICATION-- 10.5%
Brooks Fiber Properties* 47,400 $ 1,564
Frontier 40,410 1,238
GTE 23,000 1,029
LCI International* 82,434 2,586
MCI Communications 86,000 2,204
MFS Communications* 33,812 1,272
Qualcomm* 25,400 1,349
Worldcom* 30,000 1,661
---------
12,903
---------
TECHNOLOGY -- 1.6%
UUNet Technologies* 29,500 1,954
---------
WHOLESALE -- 1.1%
Cardinal Health 19,400 1,399
---------
TOTAL COMMON STOCKS
(Cost $87,125) 119,690
---------
REPURCHASE AGREEMENTS -- 4.6%
Aubrey G. Lanston
5.40%, dated 06/28/96, matures
07/01/96, repurchase price
$1,894,852 (collateralized by
U.S. Treasury Bill, par value
$2,045,000, matures 06/26/97;
market value $1,934,197) $1,894 1,894
Sanwa Bank
5.40%, dated 06/28/96, matures
07/01/96, repurchase price
$1,893,852 (collateralized by
U.S. Treasury Note, par value
$1,885,000, 5.875%, matures
07/31/97; market value
$1,939,135) 1,893 1,893
Swiss Bank
5.45%, dated 06/28/96, matures
07/01/96, repurchase price
$1,894,860 (collateralized by
U.S. Treasury Note, par value
$1,560,000, 10.75%, matures
05/15/03; market value
$1,932,757) 1,894 1,894
---------
TOTAL REPURCHASE AGREEMENTS
(Cost $5,681) 5,681
---------
TOTAL INVESTMENTS -- 101.7%
(Cost $92,806) 125,371
---------
TOTAL OTHER ASSETS AND LIABILITIES,
NET -- (1.7%) (2,136)
---------
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
46
<PAGE>
[] COREFUND EQUITY FUNDS
- -------------------------------------------------------
DESCRIPTION VALUE (000)
- -------------------------------------------------------
NET ASSETS:
Portfolio Shares - Class Y ($0.001 par
value - 100 million authorized) based on
8,460,884 outstanding shares $ 82,096
Portfolio Shares - Class A ($0.001 par
value - 100 million authorized) based on
223,118 outstanding shares 2,159
Accumulated Net Realized Gain on Investments 6,419
Net Unrealized Appreciation on Investments 32,565
Distributions in Excess of Net
Investment Income (4)
---------
TOTAL NET ASSETS -- 100.0% $123,235
=========
NET ASSET VALUE & REDEMPTION PRICE
PER SHARE
CLASS Y $14.19
=========
CLASS A $14.17
=========
* NON-INCOME PRODUCING SECURITY
ADR--AMERICAN DEPOSITORY RECEIPT
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
SPECIAL EQUITY FUND
[GRAPHIC OMITTED]
Pie Chart -- Shown is a pie chart depicting the industry classification for the
Special Equity Fund. The following represent the plot points for the chart:
Industry Classification % of Total Portfolio Investment
Miscellaneous 1
Utilities 5
Transportation 2
Technology 13
Healthcare 20
Finance 17
Basic Materials 3
Capital Goods 10
Consumer Cyclicals 18
Consumer Staples 6
Energy 5
- --------------------------------------------------------
DESCRIPTION SHARES VALUE (000)
- --------------------------------------------------------
COMMON STOCKS--96.7%
AIRCRAFT -- 1.0%
McDonnell Douglas 15,000 $ 728
-------
APPAREL/TEXTILES -- 2.5%
Burlington Industries* 5,117 72
Fieldcrest Cannon* 17,400 341
Haggar 20,000 270
Oneita Industries* 55,000 172
Oxford Industries 20,000 323
Quaker Fabric* 11,900 101
Supreme International* 18,400 317
-------
1,596
-------
AUTOMOTIVE -- 0.9%
Earl Scheib* 4,900 36
Ford Motor 7,500 243
Magna International, Class A 5,000 230
Walbro 3,000 61
-------
570
-------
BANKS -- 3.3%
Bank of Boston 13,000 643
First Chicago NBD 15,000 587
NationsBank 3,750 310
PNC Bank 18,000 536
-------
2,076
-------
BUILDING & CONSTRUCTION -- 1.5%
Cavalier Homes 16,387 379
Zurn Industries 30,000 622
-------
1,001
-------
BUILDING MATERIALS -- 0.9%
Owens Corning 14,000 602
-------
47
<PAGE>
STATEMENT
OF
NET ASSETS
AS OF
JUNE 30, 1996
SPECIAL EQUITY FUND (CONTINUED)
- -------------------------------------------------------
DESCRIPTION SHARES VALUE (000)
- -------------------------------------------------------
CHEMICALS -- 1.0%
Kinark* 60,800 $ 213
Terra Industries 35,000 433
-------
646
-------
COMMUNICATIONS EQUIPMENT -- 0.2%
ITT Industries 5,000 126
-------
COMPUTERS & SERVICES -- 4.3%
Computer Associates Interational 10,000 713
Gametek* 10,000 30
International Business Machines 8,500 841
Mizar* 18,200 118
Pace Health Management Systems* 43,500 272
Spyglass* 30,300 650
Video Lotteries Technologies* 34,200 154
-------
2,778
-------
CONTAINERS & PACKAGING -- 1.2%
Ball 20,000 575
Cronos Group* 31,400 220
-------
795
-------
DRUGS -- 11.7%
Anesta* 45,200 554
Aphton* 24,300 452
Autoimmune* 50,000 469
Biogen* 16,000 878
Collagenex Pharmaceuticals* 46,300 405
Elan (ADR)* 9,100 520
Flamel Technologies (ADR)* 90,000 726
Guilford Pharmaceuticals* 13,600 323
Hybridon* 22,500 263
Isis Pharmaceutical* 27,300 512
NBTY* 26,500 267
Pharmaceutical Resources* 105,000 525
Roberts Pharmaceuticals* 12,500 251
Scios Nova* 218,200 1,445
-------
7,590
-------
ELECTRONICS -- 3.6%
Kuhlman 50,000 869
Lam Research* 12,700 330
Philips Electronics (ADR)* 8,000 261
Smartflex Systems * 2,300 34
Teradyne* 23,000 397
Videonics* 42,600 458
-------
2,349
-------
ENTERTAINMENT -- 2.1%
Boomtown* 5,700 28
Cinergi Pictures Entertainment* 14,300 32
Hollywood Park* 20,000 193
Meridian Sports* 17,300 52
Mikohn Gaming* 110,000 976
Sports Club* 38,000 102
-------
1,383
-------
ENVIRONMENTAL SERVICES -- 1.5%
Browning Ferris Industries 25,000 725
Harding Lawson Associates
Group* 40,300 237
-------
962
-------
- -------------------------------------------------------
DESCRIPTION SHARES VALUE (000)
- -------------------------------------------------------
FINANCIAL SERVICES -- 6.2%
Jayhawk Acceptance* 50,000 $ 681
Mercury Finance 75,000 956
Olympic Financial* 35,000 805
Repsol (ADR) 15,000 521
WFS Financial * 47,000 1,058
-------
4,021
-------
FOOD, BEVERAGE & TOBACCO -- 2.4%
Cott* 19,000 178
Pepsi-Cola Puerto Rico
Bottling, Class B* 69,200 579
Philip Morris 6,300 655
RJR Nabisco Holdings 1,800 56
Rymer Foods* 178,600 112
-------
1,580
-------
FURNITURE/HOME APPLIANCE -- 0.4%
Winsloew Furniture* 44,180 254
-------
HOTELS & LODGING -- 1.8%
John Q. Hammons Hotels* 9,600 104
Prime Hospitality* 64,500 1,064
-------
1,168
-------
INSURANCE -- 4.9%
Everest Reinsurance Holdings 32,700 846
Gryphon Holdings* 36,700 550
Pac Rim Holding* 96,400 193
Travelers 21,000 958
Travelers/Aetna Property
Casualty* 18,100 514
Value Health* 5,400 128
-------
3,189
-------
MACHINERY -- 2.2%
Case 14,000 672
Caterpillar 11,500 779
-------
1,451
-------
MEDICAL PRODUCTS & SERVICES-- 8.3%
Acme United* 129,200 501
Aequitron Medical* 9,000 67
Circon* 25,000 294
Cooper* 49,999 587
Emeritus* 27,000 476
Harborside Healthcare* 18,000 185
Innovasive Devices* 9,000 90
Keravision* 34,500 539
Medpartners/Mullikin* 40,200 839
Metra Biosystems* 6,800 37
Molecular Dynamics* 1,400 9
Perseptive Biosystems* 21,000 196
Possis Medical* 22,600 376
Quest Medical* 9,000 63
Resound* 47,400 604
Spectranetics* 27,000 152
Urologix* 26,500 358
-------
5,373
-------
METALS & MINING -- 0.8%
Potash of Saskatchewan 7,800 517
-------
PETROLEUM & FUEL PRODUCTS -- 1.4%
Louis Dreyfus Natural Gas* 45,700 685
Sonat Offshore Drilling 3,900 197
-------
882
-------
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
48
<PAGE>
[] COREFUND EQUITY FUNDS
- -------------------------------------------------------
DESCRIPTION SHARES VALUE (000)
- -------------------------------------------------------
PETROLEUM REFINING -- 2.8%
Kerr-McGee 12,000 $ 731
Pennzoil 15,000 694
USX-U.S. Steel Group 14,000 397
-------
1,822
-------
RAILROADS -- 0.8%
Union Pacific 7,000 489
-------
REAL ESTATE -- 2.7%
Agree Realty 9,400 168
Liberty Property Trust 25,800 513
Macerich 27,200 571
Pacific Gulf Properties 31,400 526
-------
1,778
-------
RESTAURANTS/FOOD SERVICES -- 4.3%
Darden Restaurants* 65,000 699
Hometown Buffet* 44,800 633
Michael Foods 55,676 647
Uno Restaurant* 90,000 675
Vicorp Restaurants* 5,000 61
Vie de France* 21,000 47
-------
2,762
-------
RETAIL -- 5.8%
Bon-Ton Stores* 46,300 237
Borders Group* 50,000 1,612
Chicos* 4,500 46
CML Group 92,200 392
Drug Emporium* 92,100 414
Kroger* 11,000 435
Sportmart* 14,400 54
Sportmart, Class A* 14,400 40
Staples* 24,000 468
Strouds* 19,000 71
--------
3,769
-------
RUBBER & PLASTIC -- 0.8%
O'Sullivan 45,000 534
-------
SEMI-CONDUCTORS/INSTRUMENTS-- 2.4%
Ess Technology* 4,600 85
Intel 12,500 918
Silicon Valley Group* 28,500 534
-------
1,537
-------
STEEL & STEEL WORKS -- 0.4%
Cold Metal Products* 42,800 284
-------
TECHNOLOGY SERVICES -- 1.3%
Cabletron Systems* 10,000 686
Landmark Graphics* 7,200 139
-------
825
-------
TELEPHONES & TELECOMMUNICATION-- 8.3%
American Portable Telecom* 52,100 560
Amnex* 126,500 459
Cellular Communications,
Series A* 5,439 289
Clearnet Communications,
Class A* 40,000 670
Lucent Technologies 22,500 852
- -------------------------------------------------------
DESCRIPTION SHARES/PAR (000) VALUE (000)
- -------------------------------------------------------
Mcleod, Class A* 32,500 $ 780
Metrocall* 25,000 278
Qualcomm* 20,000 1,063
Rural Cellular* 36,100 460
-------
5,411
-------
TESTING LABORATORIES -- 0.7%
Genome Therapeutics* 45,000 405
-------
TRANSPORTATION -- 0.6%
Expeditors International of
Washington 11,100 344
-------
TRUCKING & LEASING -- 0.3%
PST Vans* 45,900 195
-------
WHOLESALE -- 1.4%
Mail Boxes Etc* 26,800 613
Rexel* 18,800 266
-------
879
-------
TOTAL COMMON STOCKS
(Cost $59,754) 62,671
-------
REPURCHASE AGREEMENT--4.4%
Sanwa Bank
5.40%, dated 06/28/96, matures
07/01/96, repurchase price
$2,863,288 (collateralized by
U.S. Treasury Note, par value
$2,930,000, 5.375%, matures
11/30/97; market value
$2,919,670) $2,862 $ 2,862
-------
TOTAL REPURCHASE AGREEMENT
(Cost $2,862) 2,862
-------
TOTAL INVESTMENTS -- 101.1%
(Cost $62,616) 65,533
-------
OTHER ASSETS AND LIABILITIES,
NET -- (1.1%) (709)
-------
NET ASSETS:
Portfolio Shares - Class Y ($0.001 par value -
1 billion authorized) based on 5,368,869
outstanding shares 51,964
Portfolio Shares - Class A ($0.001 par value -
1 billion authorized) based on
96,547 outstanding shares 990
Accumulated Net Realized Gain on Investments 8,953
Net Unrealized Appreciation on Investments 2,917
-------
TOTAL NET ASSETS -- 100.0% $64,824
=======
NET ASSET VALUE & REDEMPTION PRICE
PER SHARE
CLASS Y $11.86
=======
CLASS A $11.85
=======
* NON-INCOME PRODUCING SECURITY
(ADR) -- AMERICAN DEPOSITORY RECEIPT
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
49
<PAGE>
STATEMENT
OF
NET ASSETS
AS OF
JUNE 30, 1996
INTERNATIONAL GROWTH FUND
[GRAPHIC OMITTED]
Pie Chart -- Shown is a pie chart depicting the industry classification for the
International Growth Fund. The following represent the plot points for the
chart:
Industry Classification % of Total Portfolio Investment
Cash Equivalents 9
Smaller Markets 7
United Kingdom 14
Europe 22
Other Pacific Rim 15
Japan 33
- -------------------------------------------------------
DESCRIPTION SHARES VALUE (000)
- -------------------------------------------------------
FOREIGN STOCKS -- 88.7%
ARGENTINA -- 0.6%
Banco DeGalicia ADR 4,500 $ 116
Banco Frances ADR 6,280 181
Capex GDR 12,500 203
Cementera Argentina * 6,500 30
Commercial del Plata * 19,000 60
Irsa GDR 1,440 49
Quilmes Industrial ADR 2,500 26
YPF Sociedad Anonima ADS 5,400 122
---------
787
---------
AUSTRALIA -- 2.3%
Broken Hill Proprietary 105,770 1,460
M.I.M. Holdings 340,000 438
Qantas Airways 313,000 529
Western Mining 110,000 786
---------
3,213
---------
AUSTRIA -- 0.4%
Vienna International Airport 7,900 543
---------
BRAZIL -- 1.3%
Cemig ADR 9,900 280
Compania Vale Do Rio Doce ADR 16,400 328
Electrobras ADR 19,500 270
Telebras ADR 8,950 623
Usiminas ADR 29,100 316
---------
1,817
---------
CHILE -- 0.6%
Andina Embotelladora ADR 1,200 44
Compania de Telecom Chile ADR 500 49
Madeco ADR 7,930 223
Maderas y Sinteticos Sociedad ADS 9,000 160
Santa Isabel ADR 2,100 58
Sociedad Quimica y Minera ADR 4,861 264
---------
798
---------
- -------------------------------------------------------
DESCRIPTION SHARES VALUE (000)
- -------------------------------------------------------
COLUMBIA -- 0.1%
Cementos Diamante GDS 13,800 $ 210
---------
FINLAND -- 0.3%
Amer Group 20,000 337
Nokia, class A 2,700 100
---------
437
---------
FRANCE -- 4.3%
Air Liquide 4,700 831
AXA 23,509 1,288
Canal Plus 400 98
Imetal SA 3,487 495
L'Oreal 2,600 864
Schneider 20,500 1,077
Seita 18,400 845
Societe Nationale Elf Aquitaine 7,266 535
---------
6,033
---------
GERMANY -- 4.3%
Bayer 2,500 88
Deutsche Bank AG 16,000 759
Hoechst 52,400 1,771
Mannesmann 4,300 1,482
SGL Carbon 2,058 242
Veba 32,500 1,729
---------
6,071
---------
HONG KONG -- 6.3%
Amoy Properties 822,000 993
Cheung Kong Holdings 50,000 360
China Light & Power 174,000 789
Citic Pacific 800 3
Giordano 226,000 219
Hong Kong Telecommunications 600,000 1,077
HSBC Holdings 133,081 2,012
Hutchison Whampoa 220,000 1,384
Sung Hung Kai Properties 22,000 222
Swire Pacific, series A 172,000 1,472
Swire Pacific, series B 250,000 344
Vtech Holdings 20,000 33
---------
8,908
---------
INDIA -- 0.9%
Himilayan Fund * 49,718 711
Indian Opportunities Fund * 41,982 484
---------
1,195
---------
INDONESIA -- 0.0%
Indosat ADR 1,800 60
---------
IRELAND -- 0.1%
Elan ADR* 2,400 137
---------
ISRAEL -- 0.4%
ECI Telecom ADR 1,800 42
Near East Opportunities Fund * 59,000 578
---------
620
---------
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
50
<PAGE>
[] COREFUND EQUITY FUNDS
- -------------------------------------------------------
DESCRIPTION SHARES VALUE (000)
- -------------------------------------------------------
ITALY -- 2.4%
Bulgari 22,000 $ 352
De Rigo ADR * 11,000 250
Gucci Group ADR 2,400 155
LA Rinascente 112,000 803
LA Rinascente Warrants * 6,000 5
Saes Getters 12,000 336
Telecom Italia 637,000 1,371
Telecom Italia Mobile 72,000 161
---------
3,433
---------
JAPAN -- 31.0%
Advantest 1,400 56
Alpine Electronics 4,000 75
Amano 44,000 655
Asahi Chemical Industries 192,000 1,372
Asahi Diamond Industrial 42,000 549
Canon 87,000 1,813
Daifuku 40,000 614
Daiwa Securities 80,000 1,031
DDI 143 1,249
Eiden Sakakiya 30,000 419
Eisai 2,000 38
Hitachi 120,000 1,119
Hitachi Metals 107,000 1,232
Honda Motor 2,000 52
Hoya 2,000 65
Ito Yokado 28,000 1,691
Itochu 199,000 1,393
Jusco 3,000 98
Kamigumi 101,000 923
Kao 6,000 81
Kirin Beverage 32,000 471
Komatsu 14,000 138
Komori 22,000 563
Kuraray Warrants * 360 281
Kyocera 26,000 1,842
Mabuchi Motor 8,000 510
Marui Company 45,000 999
Mitsubishi Electric 10,000 70
Mitsubishi Estate 10,000 138
Mitsubishi Heavy Industries 286,000 2,491
Mitsui Fudosan 105,000 1,420
Mitsui Marine & Fire 10,000 80
NEC 5,000 54
Nikko Securities 8,000 90
Nippon Express 140,000 1,369
Nippon Shinpan 12,000 86
Nippon Steel 22,000 76
Nippon System Development 17,000 294
Nissan Motors 10,000 89
Nitto Denko 40,000 706
Nomura Securities 78,000 1,525
NTT Data Communications 6 180
Omron 4,000 85
Organo 40,000 431
Riso Kagaku Corporation 5,100 410
Rohm Company 30,000 1,985
Sanwa Bank 4,000 74
Sekisui Warrants * 115 207
Shimachu 17,000 505
Shin-Etsu Chemical 62,000 1,190
- -------------------------------------------------------
DESCRIPTION SHARES VALUE (000)
- -------------------------------------------------------
Sony Corporation 27,000 $ 1,779
Sumitomo 17,000 151
Sumitomo Bank 3,000 58
Sumitomo Electric 93,000 1,334
Sumitomo Forestry 74,000 1,102
Sumitomo Marine &
Fire Insurance 13,000 113
Sumitomo Trust & Banking 137,000 1,878
Taisho Pharmaceutical 25,000 542
Takeda Chemical 18,000 319
Tokio Marine & Fire Insurance 112,000 1,494
Tokyo Electronics 2,000 58
Toyota Motor 80,000 2,003
Ushio 2,000 25
Yamanouchi Pharmaceutical 3,000 65
---------
43,805
---------
LUXEMBOURG -- 0.1%
Millicom International Cellular * 1,800 86
---------
MALAYSIA -- 2.7%
AMMB Holdings 99,000 1,389
Edaran Otomobil 80,000 767
New Straits Times Press 20,000 104
Resorts World Berhad 88,000 505
United Engineers 150,000 1,040
---------
3,805
---------
MEXICO -- 0.7%
Cemex, series B 34,500 136
Cifra ADR * 35,000 51
Corporacion Industrial Alfa,
series A 28,945 130
Corporacion Industrial
San Luis ADR 5,000 181
Empresas ICA Sociedad
Controlladora ADR * 8,800 122
Grupo Carso SA ADS * 2,500 34
Grupo Financiero Banamex,
series B * 77,000 161
Grupo Financiero Banamex,
series L * 1,227 2
Grupo Modelo, series C 12,000 57
Kimberly Clark ADR 3,500 127
Kimberly Clark, series A 1,700 31
---------
1,032
---------
NETHERLANDS -- 2.5%
Amev 3,000 86
Elsevier NV 112,150 1,704
Getronics 4,800 106
Heineken 300 67
ING Groep 36,464 1,089
ING Groep Scrip 19,082 291
Polygram 700 41
Wolters Kluwer 800 91
---------
3,475
---------
NEW ZEALAND -- 0.6%
Carter Holt Harvey 350,000 800
Telecom New Zealand ADR 1,015 68
---------
868
---------
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
51
<PAGE>
STATEMENT
OF
NET ASSETS
AS OF
JUNE 30, 1996
INTERNATIONAL GROWTH FUND (CONTINUED)
- -------------------------------------------------------
DESCRIPTION SHARES VALUE (000)
- -------------------------------------------------------
NORWAY -- 0.0%
Nycomed ASA, series B 2,600 $ 37
---------
PERU -- 0.0%
Credicorp 3,525 70
---------
PHILIPPINES -- 0.1%
San Miguel, series B 33,000 114
---------
SINGAPORE -- 2.1%
Development Bank of Singapore 109,000 1,360
First Capital Corporation 118,000 293
Hong Kong Land ADR 32,000 72
Jardine Matheson &
Company (U.S.) 142,566 1,048
Singapore Press 6,400 126
United Overseas Bank 600 6
---------
2,905
---------
SOUTH AFRICA -- 0.8%
Barlow 35,000 366
Safmarime & Rennies Holdings 123,000 362
Sasol 35,000 380
---------
1,108
---------
SOUTH KOREA -- 0.5%
CITIC Seoul Excel Trust IDR * 18 192
Korea Mobile Telecom ADR * 10,500 180
Korea Preferred Share Fund * 41,000 327
Samsung Electronics 2,463 60
Samsung Electronics new 1/2
Non-voting GDS * 115 6
---------
765
---------
SPAIN -- 1.2%
Banco de Santander 20,100 939
Continente 30,472 724
---------
1,663
---------
SWEDEN -- 2.0%
Asea AB, series B Free 500 53
Astra AB, series B Free 8,000 349
Ericsson, series B 48,008 1,037
Ericsson Telephone ADR 17,000 366
SSAB A 20,000 254
Stora Kopparbergs, series A Free 61,000 806
---------
2,865
---------
SWITZERLAND -- 4.4%
ABB AG 45 56
Ascom Holding AG 280 282
Ciba Geigy 1,435 1,750
Nestle SA Registered 1,430 1,634
Roche Holding 137 1,046
Sandoz 360 412
Sulzer AG 453 291
Zurich Insurance 2,960 807
---------
6,278
---------
TAIWAN -- 1.3%
Taiwan Opportunities Fund * 204,500 1,890
---------
- -------------------------------------------------------
DESCRIPTION SHARES VALUE (000)
- -------------------------------------------------------
THAILAND -- 1.4%
Advanced Info Service 7,700 $ 114
Bangkok Bank 3,000 41
Thai Military Bank 290,000 1,142
Total Access Communications
ADR 13,500 115
TPI Polene 140,000 634
---------
2,046
---------
UNITED KINGDOM -- 13.0%
Argyll Group 179,000 964
Barclays Bank 8,850 106
Barratt Development 190,500 751
Bass 9,700 122
British Aerospace 8,750 133
British Petroleum 13,000 114
British Sky Broadcasting ADR 4,200 171
British Steel 33,000 84
British Telecommunications 126,000 677
BTR Warrants * 269,000 31
Cable & Wireless 93,000 615
East Midlands Electricity 80,032 647
GKN 60,500 928
Glaxo Wellcome 85,000 1,143
Granada Group 76,750 1,027
Imperial Chemical 6,800 83
Ladbroke 322,000 900
Lasmo 180,318 493
Logica 11,750 118
McKechnie 76,500 548
Next 17,200 150
NFC 383,000 1,100
Perpetual 3,400 124
Prudential 14,300 90
Reckitt & Coleman 103,000 1,081
Reuters Holdings 25,500 308
RTZ 7,350 109
Shell Transportation & Trading 75,500 1,105
SmithKline Beecham Units 20,500 219
Standard Chartered Bank 12,400 123
Tesco 27,000 123
TSB Lloyds Group 200,500 981
Unilever 58,500 1,162
Wassall 152,250 676
Wolseley 156,000 1,102
Zeneca Group 10,000 221
---------
18,329
---------
TOTAL FOREIGN STOCKS
(Cost $113,589) 125,403
---------
CONVERTIBLE BOND -- 0.7%
JAPAN -- 0.7%
Mitsubishi Bank
3.000%, 11/30/02 $900 1,044
---------
TOTAL CONVERTIBLE BOND
(Cost $923) 1,044
---------
DEMAND DEPOSIT -- 8.2%
Morgan Stanley
4.250%, 07/01/96 11,652 11,652
---------
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
52
<PAGE>
[] COREFUND EQUITY FUNDS
- -------------------------------------------------------
DESCRIPTION SHARES/PAR (000) VALUE (000)
- -------------------------------------------------------
TOTAL DEMAND DEPOSIT
(Cost $11,652) 11,652
---------
TOTAL INVESTMENTS -- 97.6%
(Cost $126,164) 138,099
---------
OTHER ASSETS AND LIABILITIES,
NET -- 2.4% 3,314
---------
NET ASSETS:
Portfolio Shares - Class Y ($0.001 par
value - 25 million authorized) based
on 9,966,192 outstanding shares 116,339
Portfolio Shares - Class A ($0.001 par
value - 25 million authorized) based
on 153,145 outstanding shares 1,972
Accumulated Net Realized Gain
on Investments 9,080
Net Unrealized Appreciation on
Foreign Currency Translation of Other
Assets and Liabilities Denominated in
Foreign Currency 889
Net Unrealized Appreciation
on Investments 11,935
Undistributed Net Investment
Income 1,198
---------
TOTAL NET ASSETS -- 100.0% $141,413
=========
NET ASSET VALUE & REDEMPTION
PRICE PER SHARE
CLASS Y $13.97
=========
CLASS A $13.96
=========
* NON-INCOME PRODUCING SECURITY
ADR -- AMERICAN DEPOSITORY RECEIPTS
ADS -- AMERICAN DEPOSITORY SHARES
GDR -- GLOBAL DEPOSITORY RECEIPTS
GDS -- GLOBAL DEPOSITORY SHARES
IDR -- INTERNATIONAL DEPOSITORY RECEIPTS
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
BALANCED FUND
[GRAPHIC OMITTED]
Pie Chart -- Shown is a pie chart depicting the industry classification for the
Balanced Fund. The following represent the plot points for the chart:
Industry Classification % of Total Equity Investments
Utilities 10
Transportation 3
Technology 19
Healthcare 19
Finance 6
Basic Materials 5
Capital Goods 12
Consumer Cyclicals 6
Consumer Staples 8
Energy 12
- -------------------------------------------------------
DESCRIPTION SHARES VALUE (000)
- -------------------------------------------------------
COMMON STOCKS--63.8%
AIR TRANSPORTATION -- 1.0%
Southwest Airlines 36,500 $ 1,063
---------
AIRCRAFT -- 0.6%
Boeing 7,700 671
---------
AUTOMOTIVE -- 1.1%
General Motors, Class H 18,900 1,136
---------
BANKS -- 1.4%
Barnett Banks of Florida 11,000 671
J.P. Morgan 10,000 846
---------
1,517
---------
CHEMICALS -- 1.2%
Monsanto 39,750 1,292
---------
COMMUNICATIONS EQUIPMENT -- 3.6%
Cascade Communications* 14,400 979
Cisco Systems* 23,600 1,336
Glenayre Technologies* 7,500 375
Motorola 3,300 207
U.S. Robotics* 9,200 787
---------
3,684
---------
COMPUTERS & SERVICES -- 2.6%
Compaq Computer* 2,000 99
Hewlett Packard 10,100 1,006
Microsoft* 6,000 721
Oracle Systems* 22,950 905
---------
2,731
---------
DRUGS -- 8.9%
American Home Products 20,000 1,203
Amgen* 13,600 734
Bristol-Myers Squibb 13,600 1,224
Chiron* 3,767 369
Genzyme* 15,000 754
Glaxo (ADR) 30,400 813
53
<PAGE>
STATEMENT
OF
NET ASSETS
AS OF
JUNE 30, 1996
BALANCED FUND (CONTINUED)
- -------------------------------------------------------
DESCRIPTION SHARES VALUE (000)
- -------------------------------------------------------
Merck 14,500 $ 937
Schering Plough 21,400 1,343
SmithKline Beecham (ADR) 16,000 870
Warner Lambert 20,000 1,100
---------
9,347
---------
ELECTRICAL EQUIPMENT -- 2.6%
Emerson Electric 7,650 691
General Electric 16,400 1,419
Westinghouse Electric 33,300 624
---------
2,734
---------
ELECTRICAL SERVICES -- 1.0%
Texas Utilities 25,000 1,069
---------
ENTERTAINMENT -- 0.4%
International Game Technology 25,330 427
---------
FINANCIAL SERVICES -- 1.3%
American Express 15,000 669
Federal National Mortgage
Association 21,600 724
---------
1,393
---------
FOOD, BEVERAGE & TOBACCO -- 3.5%
Coca Cola 23,600 1,153
PepsiCo 26,800 948
Philip Morris 9,000 936
Sara Lee 21,400 693
---------
3,730
---------
HOUSEHOLD PRODUCTS -- 2.4%
Gillette 10,600 661
Procter & Gamble 11,775 1,067
Rubbermaid 30,600 834
---------
2,562
---------
INSURANCE -- 1.3%
American International Group 6,000 592
General Re 5,000 761
---------
1,353
---------
MACHINERY -- 2.2%
Caterpillar 17,900 1,213
Deere 28,600 1,144
---------
2,357
---------
MEASURING DEVICES -- 0.9%
Honeywell 17,000 927
---------
MEDICAL PRODUCTS & SERVICES-- 4.1%
Cardinal Health 11,700 844
Guidant 15,100 744
HBO 10,000 678
Health Management Associates,
Class A* 29,362 595
Johnson & Johnson 13,200 653
United Healthcare 15,400 778
---------
4,292
---------
- -------------------------------------------------------
DESCRIPTION SHARES/PAR (000) VALUE (000)
- -------------------------------------------------------
METALS & MINING -- 1.2%
Aluminum Company of
America 23,000 $ 1,320
---------
PAPER & PAPER PRODUCTS -- 0.7%
Kimberly Clark 9,204 711
---------
PETROLEUM & FUEL PRODUCTS -- 0.9%
Anadarko Petroleum 16,500 957
---------
PETROLEUM REFINING -- 6.7%
Amoco 12,400 897
Atlantic Richfield 7,375 874
British Petroleum (ADR) 22 2
Chevron 17,100 1,009
Exxon 13,500 1,173
Mobil 10,200 1,144
Schlumberger 11,400 960
Texaco 12,500 1,048
---------
7,107
---------
PHOTOGRAPHIC EQUIPMENT & SUPPLIES -- 0.8%
Eastman Kodak 10,600 824
---------
RAILROADS -- 0.6%
Conrail 10,000 664
---------
RETAIL -- 1.7%
May Department Stores 19,100 836
Nordstrom 21,000 934
---------
1,770
---------
SEMI-CONDUCTORS/INSTRUMENTS-- 0.9%
Intel 13,500 991
---------
TECHNOLOGY, SERVICES -- 1.6%
First Data 7,000 557
Paychex 22,500 1,083
---------
1,640
---------
TELEPHONES & TELECOMMUNICATION-- 8.6%
Alltel 30,000 922
Bell Atlantic 8,000 510
Bellsouth 18,500 784
Brooks Fiber Properties* 21,000 693
Frontier 30,000 919
GTE 29,000 1,298
LCI International* 40,000 1,255
MFS Communications* 28,000 1,054
Qualcomm* 4,500 239
SBC Telecommunications 18,100 891
Worldcom* 10,000 554
---------
9,119
---------
TOTAL COMMON STOCKS
(Cost $53,905) 67,388
---------
U.S. TREASURY OBLIGATIONS--18.0%
U.S. Treasury Bonds
7.250%, 05/15/16 $ 500 512
8.750%, 05/15/17 665 789
U.S. Treasury Notes
7.250%, 08/31/96 500 501
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
54
<PAGE>
[] COREFUND EQUITY FUNDS
- -------------------------------------------------------
DESCRIPTION PAR (000) VALUE (000)
- -------------------------------------------------------
6.500%, 09/30/96 $ 2,500 $ 2,508
8.500%, 07/15/97 1,215 1,247
8.125%, 02/15/98 1,670 1,723
5.125%, 03/31/98 500 492
6.125%, 05/15/98 1,000 1,001
9.250%, 08/15/98 1,620 1,718
8.875%, 11/15/98 1,105 1,169
8.875%, 02/15/99 110 117
6.000%, 10/15/99 500 495
7.750%, 11/30/99 700 729
6.375%, 01/15/00 500 500
7.500%, 11/15/01 3,235 3,377
7.500%, 02/15/05 600 631
6.500%, 08/15/05 500 493
5.875%, 11/15/05 500 471
6.875%, 05/15/06 500 505
---------
TOTAL U.S. TREASURY OBLIGATIONS
(Cost $19,291) 18,978
---------
U.S. GOVERNMENT AGENCY OBLIGATIONS--0.9%
FHLMC
6.440%, 01/28/00 500 497
FNMA
5.940%, 12/12/05 500 463
---------
TOTAL U.S. GOVERNMENT AGENCY OBLIGATIONS
(Cost $1,000) 960
---------
U.S. GOVERNMENT MORTGAGE-BACKED
BONDS--2.8%
FHLMC
6.000%, 05/01/08 724 686
5.500%, 11/01/08 822 762
FNMA
6.500%, 07/01/10 264 256
6.500%, 09/01/10 341 330
6.000%, 04/25/23 235 211
6.500%, 11/01/24 503 471
GNMA
9.000%, 10/15/19 197 206
---------
TOTAL U.S. GOVERNMENT
MORTGAGE-BACKED BONDS
(Cost $3,071) 2,922
---------
ASSET-BACKED SECURITIES--1.0%
Contimortgage Home Equity Loan
Trust, Series 95-4 A7
6.950%, 01/15/14 200 188
Delta Funding Home Equity Loan
Trust, Series 95-A A2 6.57%
6.570%, 12/25/10 195 192
Equicredit Home Equity Loan Trust,
Series 96-1 A3
6.190%, 12/15/10 225 213
Equivantage Home Equity Loan
Trust, Series 96-1 A1
6.550%, 04/01/27 207 202
- -------------------------------------------------------
DESCRIPTION PAR (000) VALUE (000)
- -------------------------------------------------------
IMC Home Equity Loan Trust,
Series 96-1 A5
6.290%, 12/25/13 $ 130 $ 122
The Money Store Home Equity
Loan Trust, Series 95-C A2
6.250%, 08/15/16 195 191
---------
TOTAL ASSET-BACKED SECURITIES
(Cost $1,149) 1,108
---------
NON-AGENCY MORTGAGE-BACKED BONDS--0.3%
GE Capital Mortgage Services,
Series 94-2 A4, CMO
6.000%, 01/25/09 125 122
Prudential Home Mortgage
Securities, Series 94-29 A5,
CMO
7.000%, 10/25/24 235 223
---------
TOTAL NON-AGENCY MORTGAGE-BACKED BONDS
(Cost $351) 345
---------
CORPORATE OBLIGATIONS--8.1%
Arco Chemical
10.250%, 11/01/10 210 264
Bellsouth
7.000%, 02/01/05 500 498
Coastal
10.250%, 10/15/04 195 228
Coca Cola
6.000%, 07/15/03 1,000 945
CSR Finance
7.700%, 07/21/25 200 197
Dayton Hudson
8.500%, 12/01/22 500 496
Donaldson Lufkin & Jenrette
6.875%, 11/01/05 185 177
First Bank System
6.875%, 09/15/07 500 479
Ford Motor Credit
6.375%, 04/15/00 500 493
6.250%, 11/08/00 500 489
7.500%, 01/15/03 1,000 1,024
ITT
7.375%, 11/15/15 360 339
Laidlaw
8.750%, 04/15/25 75 80
MacMillan Bloedel
7.700%, 02/15/26 215 196
MBNA
7.250%, 09/15/02 185 186
Merck
6.300%, 01/01/26 1,000 875
Merrill Lynch
7.000%, 04/27/08 250 242
Midland Bank
6.950%, 03/15/11 200 188
Nationsbank
6.500%, 03/15/06 200 187
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
55
<PAGE>
STATEMENT
OF
NET ASSETS
[] COREFUND EQUITY FUNDS
AS OF
JUNE 30, 1996
BALANCED FUND (CONCLUDED)
- -------------------------------------------------------
DESCRIPTION SHARES/PAR (000) VALUE (000)
- -------------------------------------------------------
Noranda
8.125%, 06/15/04 $ 195 $ 202
Provident Bank
6.125%, 12/15/00 25 24
Royal Bank of Scotland
6.375%, 02/01/11 205 183
Santander
7.250%, 11/01/15 100 95
U.S. Bancorp
6.750%, 10/15/05 500 480
---------
TOTAL CORPORATE OBLIGATIONS
(Cost $8,903) 8,567
---------
REPURCHASE AGREEMENTS--6.0%
Aubrey Lanston
5.40%, dated 06/28/96, matures
07/01/96, repurchase price
$1,607,723 (collateralized by
U.S. Treasury Bill, par value
$1,735,000, 5.68%, 06/26/97;
market value $1,640,993) 1,607 1,607
Hong Kong Shanghai Bank
5.42%, dated 06/28/96, matures
07/01/96, repurchase price
$1,607,726 (collateralized by
U.S. Treasury Note, par value
1,600,000, 6.00%; market
value $1,648,723) 1,607 1,607
Sanwa Bank
5.40%, dated 06/28/96, matures
07/01/96, repurchase price
$1,607,723 (collateralized by
U.S. Treasury Note, par value
$1,600,000, 5.875%; market
value $1,638,978) 1,607 1,607
Swiss Bank
5.45%, dated 06/28/96, matures
07/01/96, repurchase price
$1,607,730 (collateralized by
U.S. Treasury Note, par value
$1,325,000, 10.75%; market
value $1,641,605) 1,607 1,607
---------
TOTAL REPURCHASE AGREEMENTS
(Cost $6,428) 6,428
---------
TOTAL INVESTMENTS -- 100.9%
(Cost $94,098) 106,696
---------
OTHER ASSETS AND LIABILITIES,
NET -- (0.9%) (993)
---------
- -------------------------------------------------------
DESCRIPTION VALUE (000)
- -------------------------------------------------------
NET ASSETS:
Portfolio Shares - Class Y ($0.001 par
value - 100 million authorized) based
on 8,144,688 outstanding shares $ 86,860
Portfolio Shares - Class A ($0.001 par
value - 100 million authorized) based
on 253,194 outstanding shares 2,668
Accumulated Net Realized Gain on
Investments 3,568
Net Unrealized Appreciation on
Investments 12,598
Undistributed Net
Investment Income 9
---------
TOTAL NET ASSETS -- 100.0% $105,703
=========
NET ASSET VALUE & REDEMPTION PRICE
PER SHARE
CLASS Y $12.59
=========
CLASS A $12.59
=========
*NON-INCOME PRODUCING SECURITY
ADR -- AMERICAN DEPOSITORY RECEIPT
CMO -- COLLATERALIZED MORTGAGE OBLIGATION
FHLMC -- FEDERAL HOME LOAN MORTGAGE CORPORATION
FNMA -- FEDERAL NATIONALMORTGAGE ASSOCIATION
GNMA -- GOVERNMENT NATIONAL MORTGAGE ASSOCIATION
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
56
<PAGE>
[This page intentionally left blank.]
<PAGE>
STATEMENT
OF
OPERATIONS
(000)
[] COREFUND EQUITY FUNDS
FOR THE PERIOD
ENDED
JUNE 30, 1996
<TABLE>
<CAPTION>
---------- -------- ----------- -------------- ------------- --------
EQUITY EQUITY GROWTH SPECIAL INTERNATIONAL BALANCED
INDEX FUND FUND(3) EQUITY FUND EQUITY FUND(3) GROWTH FUND FUND
---------- -------- ----------- -------------- ------------- --------
<S> <C> <C> <C> <C> <C> <C>
INVESTMENT INCOME
Dividends $ 3,117 $ 5,338 $ 1,336 $ 402 $ 2,851 $ 1,000
Interest 42 325 327 111 156 1,825
Less: Foreign taxes withheld -- -- -- -- (309) --
-------- -------- -------- -------- -------- --------
Total investment income 3,159 5,663 1,663 513 2,698 2,825
-------- -------- -------- -------- -------- --------
EXPENSES:
Investment advisory fees 548 1,974 813 599 985 548
Waiver of investment advisory fees (365) -- (84) (573) (20) (106)
Administrative fees 343 526 271 78 308 195
Waiver of administrative fees (123) (101) (97) (7) (111) (65)
Transfer agent fees & expenses 45 81 40 6 40 26
Custodian fees -- (17) -- 15 163 --
Professional fees 18 50 10 4 12 6
Registration & filing fees 21 56 15 6 18 8
12b-1 fees -- 15 6 -- 5 7
Taxes--other than income (15) (4) (17) -- 7 (8)
Printing fees 10 2 10 -- 16 5
Organizational costs -- -- -- 5 -- 5
Miscellaneous 4 23 1 2 (11) 21
-------- -------- -------- -------- -------- --------
Total expenses 486 2,605 968 135 1,412 642
-------- -------- -------- -------- -------- --------
NET INVESTMENT INCOME 2,673 3,058 695 378 1,286 2,183
-------- -------- -------- -------- -------- --------
NET REALIZED AND UNREALIZED GAIN
ON INVESTMENTS:
Net realized gain from security
transactions 4,702 43,129 10,837 9,147 9,937 4,822
Net realized gain on forward currency
contracts and foreign currency
transactions -- -- -- -- 1,907 --
Net unrealized appreciation on forward
foreign currency contracts and
translation of assets and liabilities
in foreign currencies -- -- -- -- 200 --
Net change in unrealized appreciation
on investments 23,222 23,229 17,962 2,372 5,512 6,379
-------- -------- -------- -------- -------- --------
NET INCREASE IN NET ASSETS RESULTING FROM
OPERATIONS $ 30,597 $ 69,416 $ 29,494 $ 11,897 $ 18,842 $ 13,384
======== ======== ======== ======== ======== ========
COMPUTATION OF NET ASSET VALUE AND OFFERING
PRICE - JUNE 30, 1996:
CLASS Y
1Net asset value, offer and redemption
price $ 28.47 $ 17.26 $ 14.19 $ 11.86 $ 13.97 $ 12.59
======== ======== ======== ======== ======== ========
CLASS A
1Net asset value, redemption price 17.28 14.17 11.85 13.96 12.59
Maximum sales charge of 3.25% 0.58 0.48 0.40 0.47 0.42
-------- -------- -------- -------- --------
2Offering price $ 17.86 $ 14.65 $ 12.25 $ 14.43 $ 13.01
======== ======== ======== ======== ========
<FN>
AMOUNTS DESIGNATED AS "--" ARE EITHER $0 OR HAVE BEEN ROUNDED TO $0
1 NET ASSET VALUE PER SHARE, AS ILLUSTRATED, IS THE AMOUNT WHICH WOULD BE PAID
UPON THE REDEMPTION OR EXCHANGE OF SHARES.
2 THE OFFER PRICE IS CALCULATED BY DIVIDING THE NET ASSET VALUE OF CLASS A BY 1
MINUS THE MAXIMUM SALES CHARGE OF 3.25%.
3 DUE TO THE MERGER OF THIS FUND WITH A CONESTOGA FUND, AMOUNTS REPRESENT ACTIVITY
FOR THE PERIOD NOVEMBER 1, 1995 THROUGH JUNE 30, 1996. PLEASE SEE THE NOTES TO
THE FINANCIAL STATEMENTS FOR FURTHER DETAILS REGARDING THE MERGER.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
</FN>
</TABLE>
58 & 59
<PAGE>
STATEMENT
OF CHANGES
IN NET ASSETS
(000)
[] COREFUND EQUITY FUNDS
FOR THE PERIODS
ENDED
JUNE 30
<TABLE>
<CAPTION>
------------------- ---------------------- ----------------------
EQUITY EQUITY GROWTH
INDEX FUND FUND EQUITY FUND
------------------- ---------------------- ----------------------
1996 1995 1996(1) 1995(2) 1996 1995
-------- -------- --------- --------- --------- ---------
OPERATIONS:
<S> <C> <C> <C> <C> <C> <C>
Net investment income $ 2,673 $ 2,147 $ 3,058 $ 2,924 $ 695 $ 645
Net realized gain from security transactions
and foreign currency transactions 4,702 3,527 43,129 28,979 10,837 308
Net unrealized appreciation (depreciation) on
investments, forward foreign currency
contracts and translation of assets and
liabilites in foreign currencies 23,222 14,303 23,229 12,894 17,962 16,243
-------- -------- --------- --------- --------- ---------
Net increase (decrease) in net assets
resulting from operations 30,597 19,977 69,416 44,797 29,494 17,196
-------- -------- --------- --------- --------- ---------
DIVIDENDS DISTRIBUTED FROM:
Net investment income:
Prior Class (a) -- -- -- (125) -- --
Retail Class (b) -- -- (35) (53) -- --
Institutional Class (b) -- -- (2,133) (2,638) -- --
Class Y (c) (2,677) (2,147) (1,001) -- (691) (632)
Class A (c) -- -- (21) -- (11) (10)
Net realized gains:
Prior Class (a) -- -- -- (2,660) -- --
Retail Class (b) -- -- (1,150) -- -- --
Institutional Class (b) -- -- (57,348) -- -- --
Class Y (c) (3,835) (3,652) -- -- (2,808) --
Class A (c) -- -- -- -- (63) --
-------- -------- --------- --------- --------- ---------
Total dividends distributed (6,512) (5,799) (61,688) (5,476) (3,573) (642)
-------- -------- --------- --------- --------- ---------
CAPITAL TRANSACTIONS(3):
Prior Class (a):
Redesignated to Retail Class (b) -- -- -- (5,674) -- --
Redesignated to Institutional Class (b) -- -- -- (42,589) -- --
Proceeds from shares issued -- -- -- 4,679 -- --
Reinvestment of cash distributions -- -- -- 2,420 -- --
Cost of shares redeemed -- -- -- (6,294) -- --
-------- -------- --------- --------- --------- ---------
Decrease in net assets from Prior Class
transactions -- -- -- (47,458) -- --
-------- -------- --------- --------- --------- ---------
Retail Class (b):
Redesignated from Prior Class (a) -- -- -- 5,674 -- --
Exchanged for Class A Shares -- -- -- -- -- --
Proceeds from shares issued -- -- 1,033 676 -- --
Reinvestment of cash distributions -- -- 1,168 52 -- --
Cost of shares redeemed -- -- (674) (948) -- --
-------- -------- --------- --------- --------- ---------
Increase (Decrease) in net assets from
Retail Class transactions -- -- 1,527 5,454 -- --
-------- -------- --------- --------- --------- ---------
Institutional Class (b):
Redesignated from Prior Class (a) -- -- -- 42,589 -- --
Exchanged for Class Y Shares -- -- -- -- -- --
Proceeds from shares issued -- -- 35,302 351,837 -- --
Reinvestment of cash distributions -- -- 58,151 2,568 -- --
Cost of shares redeemed -- -- (92,405) (59,497) -- --
-------- -------- --------- --------- --------- ---------
Increase (Decrease) in net assets from
Institutional Class transactions -- -- 1,048 337,497 -- --
-------- -------- --------- --------- --------- ---------
Class Y (c):
Proceeds from shares issued in merger (d) -- -- 34,310 -- -- --
Proceeds from shares issued 50,936 31,601 16,834 -- 24,852 28,885
Reinvestment of cash distributions 6,064 5,180 -- -- 3,081 528
Cost of shares redeemed (27,288) (10,958) (23,221) -- (24,528) (19,116)
-------- -------- --------- --------- --------- ---------
Increase in net assets from Class Y
transactions 29,712 25,823 27,923 -- 3,405 10,297
-------- -------- --------- --------- --------- ---------
Class A (c):
Proceeds from shares issued in merger (d) -- -- 2,807 -- -- --
Proceeds from shares issued -- -- 575 -- 980 280
Reinvestment of cash distributions -- -- -- -- 71 9
Cost of shares redeemed -- -- (549) -- (530) (359)
-------- -------- --------- --------- --------- ---------
Increase (Decrease) in net assets from
Class A transactions -- -- 2,833 -- 521 (70)
-------- -------- --------- --------- --------- ---------
Increase in net assets derived from capital
share transactions 29,712 25,823 33,331 295,493 3,926 10,227
-------- -------- --------- --------- --------- ---------
Net increase in net assets 53,797 40,001 41,059 334,815 29,847 26,781
-------- -------- --------- --------- --------- ---------
NET ASSETS:
Beginning of period 112,553 72,552 384,943 50,128 93,388 66,607
-------- -------- --------- --------- --------- ---------
End of period $166,350 $112,553 $ 426,002 $ 384,943 $ 123,235 $ 93,388
======== ======== ========= ========= ========= =========
<FN>
AMOUNTS DESIGNATED AS "--" ARE EITHER $0 OR HAVE BEEN ROUNDED TO $0.
(A) ON FEBRUARY 21, 1995 THE SHARES OF THE CONESTOGA EQUITY AND SPECIAL EQUITY FUNDS
WERE REDESIGNATED FROM A SINGLE CLASS TO RETAIL AND INSTITUTIONAL CLASSES.
(B) RETAIL AND INSTITUTIONAL CLASS AMOUNTS FOR 1996 REPRESENT ACTIVITY OF THE
ACQUIRED CONESTOGA FUND FROM NOVEMBER 1, 1995 THROUGH APRIL 14, 1996.
(C) ON APRIL 22, 1996 SERIES A SHARES WERE REDESIGNATED CLASS Y SHARES, AND SERIES B
SHARES WERE REDESIGNATED CLASS A SHARES.
(D) ON APRIL 15 & 22, 1996 THE CONESTOGA FUNDS WERE ACQUIRED BY COREFUNDS, INC.
PLEASE SEE THE NOTES TO THE FINANCIAL STATEMENTS FOR FURTHER INFORMATION REGARDING
THE TRANSACTION.
</FN>
</TABLE>
<TABLE>
<CAPTION>
---------------------- ---------------------- ----------------------
SPECIAL INTERNATIONAL BALANCED
EQUITY FUND GROWTH FUND FUND
---------------------- ---------------------- ----------------------
1996(1) 1995(2) 1996 1995 1996 1995
--------- --------- --------- --------- --------- ---------
OPERATIONS:
<S> <C> <C> <C> <C> <C> <C>
Net investment income $ 378 $ 368 $ 1,286 $ 1,115 $ 2,183 $ 1,872
Net realized gain from security transactions
and foreign currency transactions 9,147 8,512 11,844 1,049 4,822 (155)
Net unrealized appreciation (depreciation) on
investments, forward foreign currency
contracts and translation of assets and
liabilites in foreign currencies 2,372 1,127 5,712 (2,683) 6,379 6,794
--------- --------- --------- --------- --------- ---------
Net increase (decrease) in net assets
resulting from operations 11,897 10,007 18,842 (519) 13,384 8,511
--------- --------- --------- --------- --------- ---------
DIVIDENDS DISTRIBUTED FROM:
Net investment income:
Prior Class (a) -- (35) -- -- -- --
Retail Class (b) -- (5) -- -- -- --
Institutional Class (b) -- (316) -- -- -- --
Class Y (c) (388) -- (2,440) (373) (2,108) (1,799)
Class A (c) (6) -- (38) (3) (69) (71)
Net realized gains:
Prior Class (a) -- (80) -- -- -- --
Retail Class (b) -- -- -- -- -- --
Institutional Class (b) -- -- -- -- -- --
Class Y (c) (8,564) -- (548) (7,009) (840) (171)
Class A (c) (113) -- (10) (129) (32) (8)
--------- --------- --------- --------- --------- ---------
Total dividends distributed (9,071) (436) (3,036) (7,514) (3,049) (2,049)
--------- --------- --------- --------- --------- ---------
CAPITAL TRANSACTIONS(3):
Prior Class (a):
Redesignated to Retail Class (b) -- (471) -- -- -- --
Redesignated to Institutional Class (b) -- (9,970) -- -- -- --
Proceeds from shares issued -- 652 -- -- -- --
Reinvestment of cash distributions -- 115 -- -- -- --
Cost of shares redeemed -- (81) -- -- -- --
--------- --------- --------- --------- --------- ---------
Decrease in net assets from Prior Class
transactions -- (9,755) -- -- -- --
--------- --------- --------- --------- --------- ---------
Retail Class (b):
Redesignated from Prior Class (a) -- 471 -- -- -- --
Exchanged for Class A Shares (984) -- -- -- -- --
Proceeds from shares issued 166 186 -- -- -- --
Reinvestment of cash distributions 115 5 -- -- -- --
Cost of shares redeemed (29) (57) -- -- -- --
--------- --------- --------- --------- --------- ---------
Increase (Decrease) in net assets from
Retail Class transactions (732) 605 -- -- -- --
--------- --------- --------- --------- --------- ---------
Institutional Class (b):
Redesignated from Prior Class (a) -- 9,970 -- -- -- --
Exchanged for Class Y Shares (58,929) -- -- -- -- --
Proceeds from shares issued 6,660 46,892 -- -- -- --
Reinvestment of cash distributions 8,821 316 -- -- -- --
Cost of shares redeemed (12,704) (9,538) -- -- -- --
--------- --------- --------- --------- --------- ---------
Increase (Decrease) in net assets from
Institutional Class transactions (56,152) 47,640 -- -- -- --
--------- --------- --------- --------- --------- ---------
Class Y (c):
Proceeds from shares issued in merger (d) 58,929 -- 16,130 -- 38,306 --
Proceeds from shares issued 2,827 -- 17,623 16,395 17,797 19,859
Reinvestment of cash distributions -- -- 2,732 6,850 2,494 1,818
Cost of shares redeemed (2,083) -- (23,593) (13,444) (27,174) (9,222)
--------- --------- --------- --------- --------- ---------
Increase in net assets from Class Y
transactions 59,673 -- 12,892 9,801 31,423 12,455
--------- --------- --------- --------- --------- ---------
Class A (c):
Proceeds from shares issued in merger (d) 984 -- 59 -- 95 --
Proceeds from shares issued 98 -- 421 440 678 216
Reinvestment of cash distributions -- -- 46 129 96 79
Cost of shares redeemed (3) -- (592) (486) (360) (427)
--------- --------- --------- --------- --------- ---------
Increase (Decrease) in net assets from
Class A transactions 1,079 -- (66) 83 509 (132)
--------- --------- --------- --------- --------- ---------
Increase in net assets derived from capital
share transactions 3,868 38,490 12,826 9,884 31,932 12,323
--------- --------- --------- --------- --------- ---------
Net increase in net assets 6,694 48,061 28,632 1,851 42,267 18,785
--------- --------- --------- --------- --------- ---------
NET ASSETS:
Beginning of period 58,130 10,069 112,781 110,930 63,436 44,651
--------- --------- --------- --------- --------- ---------
End of period $ 64,824 $ 58,130 $ 141,413 $ 112,781 $ 105,703 $ 63,436
========= ========= ========= ========= ========= =========
<FN>
AMOUNTS DESIGNATED AS "--" ARE EITHER $0 OR HAVE BEEN ROUNDED TO $0.
(1) AMOUNTS REPRESENT CONESTOGA FUNDS ACTIVITY FROM NOVEMBER 1, 1995 THROUGH
APRIL 14, 1996 AND COREFUND ACTIVITY FROM APRIL 15, 1996 TO JUNE 30, 1996.
(2) AMOUNTS REPRESENT CONESTOGA FUNDS ACTIVITY FOR THE FISCAL YEAR ENDED OCTOBER 31, 1995.
(3) FOR CAPITAL SHARE TRANSACTIONS PLEASE SEE FOOTNOTE 8 IN THE NOTES TO THE
FINANCIAL STATEMENTS.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
</FN>
</TABLE>
60 & 61
<PAGE>
FINANCIAL
HIGHLIGHTS
FOR THE PERIODS
ENDED
JUNE 30
For a Share Outstanding Throughout the Period
<TABLE>
<CAPTION>
NET
NET ASSET REALIZED AND DISTRIBUTIONS DISTRIBUTIONS NET ASSETS RATIO
VALUE NET UNREALIZED FROM NET FROM ASSET VALUE END OF EXPENSES
BEGINNING INVESTMENT GAINS OR (LOSSES) INVESTMENT CAPITAL END TOTAL OF PERIOD TO AVERAGE
OF PERIOD INCOME ON SECURITIES INCOME GAINS OF PERIOD RETURN8 (000) NET ASSETS
--------- ---------- ----------------- ------------- ------------- ----------- ------- --------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
- -----------------
EQUITY INDEX FUND
- -----------------
CLASS Y**
1996 $23.79 $0.51 $ 5.47 $(0.51) $(0.79) $28.47 25.69% $166,350 0.35%
1995 20.54 0.52 4.24 (0.52) (0.99) 23.79 24.45 112,533 0.37
1994 20.97 0.55 (0.43) (0.55) -- 20.54 0.55 72,552 0.35
1993 19.22 0.52 1.84 (0.52) (0.09) 20.97 12.39 50,551 0.49
1992 18.46 0.52 1.80 (0.48) (1.08) 19.22 12.59 20,166 0.57
19911 19.48 0.03 (0.94) (0.02) (0.09) 18.46 (4.64)+ 12,117 0.97
- --------------
EQUITY FUND(9)
- --------------
CLASS Y*
1996 $17.07 $0.14 $ 1.49 $(0.14) $(1.30) $17.26 19.24% $414,824 0.97%
INSTITUTIONAL CLASS*
1995 15.00 0.19 2.87 (0.19) (0.80) 17.07 22.00 378,352 1.05
CLASS A*
1996 $17.08 $0.12 $ 1.49 $(0.11) $(1.30) $17.28 19.11% $ 11,178 1.22%
RETAIL CLASS*
1995 15.00 0.18 2.87 (0.17) (0.80) 17.08 21.94 6,591 1.34
PRIOR CLASS
1994 $15.39 $0.11 $ 0.22 $(0.11) $(0.61) $15.00 2.21% $ 50,128 1.49%
1993 13.93 0.14 1.89 (0.14) (0.43) 15.39 14.90 45,677 1.20
1992 13.08 0.19 1.02 (0.19) (0.17) 13.93 9.27 28,103 0.92
1991 8.95 0.26 4.13 (0.26) -- 13.08 49.37 12,830 0.54
19902 10.00 0.14 (1.05) (0.14) -- 8.95 (9.22) 5,982 0.65
- ------------------
GROWTH EQUITY FUND
- ------------------
CLASS Y**
1996 $11.18 $0.08 $ 3.36 $(0.08) $(0.35) $14.19 31.36% $120,073 0.89%
1995 9.11 0.08 2.07 (0.08) -- 11.18 23.71 91,345 0.76
1994 9.95 0.05 (0.84) (0.05) -- 9.11 (8.01) 64,877 0.69
1993 8.74 0.08 1.21 (0.08) -- 9.95 14.76 63,777 0.43
19923 10.00 0.05 (1.26) (0.05) -- 8.74 (12.05)+ 33,418 0.14
CLASS A**
1996 $11.17 $0.05 $ 3.35 $(0.05) $(0.35) $14.17 31.00% $ 3,162 1.14%
1995 9.10 0.06 2.07 (0.06) -- 11.17 23.44 2,043 1.01
1994 9.95 0.04 (0.85) (0.04) -- 9.10 (8.13) 1,730 0.94
19934 9.80 0.03 0.15 (0.03) -- 9.95 1.80+ 5,224 0.80
- ----------------------
SPECIAL EQUITY FUND(9)
- ----------------------
CLASS Y*
1996 $11.42 $0.07 $ 2.13 $(0.07) $(1.69) $11.86 22.27% $ 63,680 0.34%
INSTITUTIONAL CLASS*
1995 9.37 0.12 2.12 (0.12) (0.07) 11.42 24.44 57,396 0.32
CLASS A*
1996 $11.42 $0.08 $ 2.11 $(0.07) $(1.69) $11.85 22.14% $ 1,144 0.37%
RETAIL CLASS*
1995 9.37 0.12 2.12 (0.12) (0.07) 11.42 24.44 734 0.27
PRIOR CLASS
19945 $10.00 $0.06 $(0.63) $(0.06) -- $9.37 (5.72)% $ 10,069 0.15%
- -------------------------
INTERNATIONAL GROWTH FUND
- -------------------------
CLASS Y**
1996 $12.29 $0.16 $ 1.86 $(0.28) $(0.06) $13.97 16.72% $139,275 1.14%
1995 13.18 0.12 (0.17) (0.04) (0.80) 12.29 (0.21) 110,838 1.05
1994 11.71 0.12 1.78 (0.12) (0.31) 13.18 16.28 108,911 0.99
1993 10.52 0.10 1.16 (0.07) -- 11.71 12.06 61,655 0.99
1992 10.10 0.17 0.31 -- (0.06) 10.52 4.90 42,594 0.96
1991 10.75 0.19 (0.44) (0.27) (0.13) 10.10 (2.71) 20,582 0.99
19906 10.00 0.11 0.86 (0.09) (0.13) 10.75 9.74+ 13,513 1.22
CLASS A**
1996 $12.27 $0.11 $ 1.89 $(0.25) $(0.06) $13.96 16.54% $ 2,138 1.39%
1995 13.17 0.09 (0.17) (0.02) (0.80) 12.27 (0.48) 1,943 1.30
1994 11.71 0.06 1.82 (0.11) (0.31) 13.17 16.08 2,019 1.24
19934 10.07 0.05 1.59 -- -- 11.71 16.29+ 344 1.15
- -------------
BALANCED FUND
- -------------
CLASS Y**
1996 $11.06 $0.33 $1.68 $(0.33) $(0.15) $12.59 18.41% $102,515 0.81%
1995 9.88 0.35 1.21 (0.35) (0.03) 11.06 16.21 61,092 0.73
1994 10.39 0.35 (0.51) (0.35) -- 9.88 (1.62) 42,429 0.62
19934 10.00 0.16 0.39 (0.16) -- 10.39 5.52+ 29,434 0.45
CLASS A**
1996 $11.06 $0.30 $1.68 $(0.30) $(0.15) $12.59 18.13% $ 3,188 1.06%
1995 9.89 0.34 1.19 (0.33) (0.03) 11.06 15.84 2,344 0.98%
1994 10.38 0.31 (0.49) (0.31) -- 9.89 (1.86) 2,222 0.87
19937 10.00 0.16 0.38 (0.16) -- 10.38 2.50+ 701 0.55
</TABLE>
<TABLE>
<CAPTION>
RATIO RATIO OF NET
RATIO OF EXPENSES INCOME (LOSS)
OF NET TO AVERAGE TO AVERAGE
INCOME NET ASSETS NET ASSETS PORTFOLIO AVG.
TO AVERAGE (EXCLUDING (EXCLUDING TURNOVER COMM.
NET ASSETS WAIVERS) WAIVERS) RATE*** RATE10
---------- ----------- ------------- --------- ------
<S> <C> <C> <C> <C> <C>
- -----------------
EQUITY INDEX FUND
- -----------------
CLASS Y**
1996 1.94% 0.71% 1.59% 13% $0.0641
1995 2.48 0.76 2.09 27 --
1994 2.63 0.75 2.23 13 --
1993 2.82 0.88 2.43 4 --
1992 2.66 1.06 2.17 27 --
19911 1.79 1.20 1.56 -- --
- --------------
EQUITY FUND(9)
- --------------
CLASS Y*
1996 1.15% 1.01% 1.11% 114% $0.0636
INSTITUTIONAL CLASS*
1995 1.44 1.10 1.44 119 --
CLASS A*
1996 0.89% 1.26% 0.85% 114% $0.0636
RETAIL CLASS*
1995 1.23 1.53 1.04 119 --
PRIOR CLASS
1994 0.75% 1.51% 0.73% 35% --
1993 0.94 1.41 0.73 24 --
1992 1.47 1.23 1.17 39 --
1991 2.30 1.48 1.36 68 --
19902 2.29 1.59 1.35 43 --
- ------------------
GROWTH EQUITY FUND
- ------------------
CLASS Y**
1996 0.64% 1.05% 0.48% 81% $0.0601
1995 0.84 1.10 0.50 113 --
1994 0.48 1.11 0.06 127 --
1993 0.85 1.11 0.17 103 --
19923 1.38 1.12 0.40 66 --
CLASS A**
1996 0.40% 1.30% 0.23% 81% $0.0601
1995 0.59 1.35 0.25 113 --
1994 0.23 1.36 (0.19) 127 --
19934 0.39 1.48 (0.29) 103 --
- ----------------------
SPECIAL EQUITY FUND(9)
- ----------------------
CLASS Y*
1996 0.94% 1.79% (0.51)% 72% $0.0539
INSTITUTIONAL CLASS*
1995 1.14 1.97 (0.51) 129 --
CLASS A*
1996 0.91% 1.82% (0.55)% 72% $0.0539
RETAIL CLASS*
1995 1.29 2.24 (0.68) 129 --
PRIOR CLASS
19945 1.06% 2.10% (0.89)% 39% --
- -------------------------
INTERNATIONAL GROWTH FUND
- -------------------------
CLASS Y**
1996 1.05% 1.25% 0.94% 41% $0.0270
1995 0.98 1.19 0.84 59 --
1994 0.23 1.18 0.04 67 --
1993 1.22 1.28 0.93 59 --
1992 1.67 1.40 1.23 87 --
1991 1.80 1.56 1.23 49 --
19906 2.57 1.99 1.80 20 --
CLASS A**
1996 0.80% 1.50% 0.69% 41% $0.0270
1995 0.73 1.44 0.59 59 --
1994 0.05 1.43 (0.14) 67 --
19934 1.51 1.44 1.22 59 --
- -------------
BALANCED FUND
- -------------
CLASS Y**
1996 2.79% 1.03% 2.57% 74% $0.0621
1995 3.51 1.07 3.17 46 --
1994 3.46 1.08 3.00 56 --
19934 3.38 1.39 2.45 21 --
CLASS A**
1996 2.53% 1.27% 2.32% 74% $0.0621
1995 3.27 1.32 2.93 46 --
1994 3.21 1.33 2.75 56 --
19937 5.76 1.48 4.83 21 --
<FN>
* ON FEBRUARY 21, 1995 THE SHARES OF THE FUNDS WERE REDESIGNATED AS EITHER RETAIL OR INSTITUTIONAL SHARES. FOR THE YEAR
ENDED OCTOBER 31, 1995, THE FINANCIAL HIGHLIGHTS' RATIOS OF EXPENSES, 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. ADDITIONALLY, ON APRIL 15 & 22, 1996 THE CONESTOGA EQUITY AND SPECIAL EQUITY FUNDS WERE
ACQUIRED BY COREFUNDS, INC.; AT WHICH TIME THE INSTITUTIONAL CLASS OF SHARES OF THESE FUNDS WERE EXCHANGED FOR CLASS Y
SHARES AND THE RETAIL CLASS OF THESE FUNDS WERE EXCHANGED FOR CLASS A SHARES.
** ON APRIL 22, 1996 THE SERIES A SHARES OF EACH FUND WERE REDESIGNATED CLASS Y AND THE SERIES B SHARES OF EACH FUND WERE
REDESIGNATED CLASS A.
*** FOR 1996, TRANSACTIONS RELATING TO THE MERGER WERE EXCLUDED FROM THE CALCULATION OF THE PORTFOLIO TURNOVER RATE.
+ THIS FIGURE HAS NOT BEEN ANNUALIZED.
1 COMMENCED OPERATIONS JUNE 1, 1991. UNLESS OTHERWISE NOTED, ALL RATIOS FOR THE PERIOD HAVE BEEN ANNUALIZED.
2 COMMENCED OPERATIONS FEBRUARY 28, 1990. UNLESS OTHERWISE NOTED, ALL RATIOS FOR THE PERIOD HAVE BEEN ANNUALIZED.
3 COMMENCED OPERATIONS FEBRUARY 3, 1992. UNLESS OTHERWISE NOTED, ALL RATIOS FOR THE PERIOD HAVE BEEN ANNUALIZED.
4 COMMENCED OPERATIONS JANUARY 4, 1993. UNLESS OTHERWISE NOTED, ALL RATIOS FOR THE PERIOD HAVE BEEN ANNUALIZED.
5 COMMENCED OPERATIONS MARCH 15, 1994. UNLESS OTHERWISE NOTED, ALL RATIOS FOR THE PERIOD HAVE BEEN ANNUALIZED.
6 COMMENCED OPERATIONS FEBRUARY 12, 1990. UNLESS OTHERWISE NOTED, ALL RATIOS FOR THE PERIOD HAVE BEEN ANNUALIZED.
7 COMMENCED OPERATIONS MARCH 16, 1993. UNLESS OTHERWISE NOTED, ALL RATIOS FOR THE PERIOD HAVE BEEN ANNUALIZED.
8 TOTAL RETURN DOES NOT REFLECT APPLICABLE SALES LOAD. ADDITIONALLY TOTAL RETURN FOR CLASS Y & CLASS A FOR THE EQUITY &
SPECIAL EQUITY FUNDS FOR 1996 ARE FOR AN EIGHT MONTH PERIOD ENDED JUNE 30, 1996.
9 THE PER SHARE AMOUNT FOR THESE FUNDS FOR 1996 REPRESENTS THE PERIOD FROM NOVEMBER 1, 1995 TO JUNE 30, 1996. ALL PRIOR
YEARS ARE FOR THE PERIODS NOVEMBER 1 TO OCTOBER 31.
10 AVERAGE COMMISSION RATE PAID PER SHARE FOR SECURITY PURCHASES AND SALES DURING THE PERIOD. PRESENTATION OF THE RATE IS
REQUIRED FOR FISCAL YEARS BEGINNING AFTER SEPTEMBER 1, 1995.
</FN>
</TABLE>
62
<PAGE>
STATEMENT
OF
NET ASSETS
[] COREFUND FIXED INCOME FUNDS
AS OF
JUNE 30, 1996
SHORT TERM INCOME FUND
[GRAPHIC OMITTED]
Pie Chart -- Shown is a pie chart depicting the industry classification for the
Short Term Income Fund. The following represent the plot points for the
chart:
Industry Classification % of Total Portfolio Investment
Cash Equivalents 6
Corporate Bonds 40
U.S. Treasury Obligations 54
- -------------------------------------------------------
DESCRIPTION PAR (000) VALUE (000)
- -------------------------------------------------------
U.S. TREASURY OBLIGATIONS--53.6%
U.S. Treasury Notes
7.875%, 07/31/96 $ 800 $ 802
6.500%, 09/30/96 555 557
7.500%, 12/31/96 1,030 1,040
6.500%, 05/15/97 500 503
5.875%, 07/31/97 1,000 1,000
5.625%, 08/31/97 1,000 997
7.375%, 11/15/97 4,000 4,072
6.000%, 12/31/97 5,075 5,078
8.250%, 07/15/98 2,000 2,080
-------
TOTAL U.S. TREASURY OBLIGATIONS
(Cost $16,174) 16,129
-------
CORPORATE BONDS--28.6%
American General Finance
7.000%, 10/01/97 985 993
AT&T Capital
5.970%, 02/27/98 1,000 994
First USA Bank
6.125%, 10/30/97 1,000 993
International Lease
7.830%, 11/14/96 1,000 1,007
Lehman Brothers Holdings
6.375%, 06/01/98 500 498
Salomon Brothers
9.000%, 07/23/96 500 501
Smith Barney
6.000%, 03/15/97 600 601
Tele-Communications
5.280%, 08/20/96 560 559
Time Warner
7.450%, 02/01/98 735 743
Transcont Gas
8.125%, 01/15/97 525 531
USX
6.650%, 10/09/97 1,200 1,203
-------
TOTAL CORPORATE BONDS
(Cost $8,634) 8,623
-------
- -------------------------------------------------------
DESCRIPTION PAR (000) VALUE (000)
- -------------------------------------------------------
ASSET-BACKED SECURITIES--11.3%
Banc One Credit Card Master Trust,
Series 94-A
7.150%, 12/15/98 $ 420 $ 423
Money Store Home Equity Loan
Trust, Series 93-B
5.400%, 08/15/05 517 500
Premier Auto Trust, Series 94-4 A4
6.450%, 05/02/98 600 602
Premier Auto Trust, Series 95-1 A4
7.850%, 09/04/98 1,000 1,015
Union Acceptance, Series 96-A
5.400%, 04/07/03 873 859
-------
TOTAL ASSET-BACKED SECURITIES
(Cost $3,421) 3,399
-------
REPURCHASE AGREEMENT--5.8%
Sanwa Bank
5.40%, dated 06/28/96, matures
07/01/96, repurchase price
$1,762,793 (collateralized by
U.S. Treasury Note, par value
$1,805,000, 5.375%, 11/30/97;
market value $1,798,039) 1,762 1,762
-------
TOTAL REPURCHASE AGREEMENT
(Cost $1,762) 1,762
-------
TOTAL INVESTMENTS -- 99.3%
(Cost $29,991) 29,913
-------
OTHER ASSETS AND LIABILITIES,
NET -- 0.7% 220
-------
NET ASSETS:
Portfolio Shares - Class Y ($0.001 par
value - 1 billion authorized) based on
3,032,169 outstanding shares 30,291
Portfolio Shares - Class A ($0.001 par
value -1 billion authorized) based on
60 outstanding shares 1
Accumulated Net Realized Loss on
Investments (81)
Net Unrealized Depreciation on
Investments (78)
-------
TOTAL NET ASSETS -- 100.0% $30,133
=======
NET ASSET VALUE & REDEMPTION PRICE
PER SHARE
CLASS Y $9.94
=======
CLASS A $9.93
=======
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
63
<PAGE>
STATEMENT
OF
NET ASSETS
AS OF
JUNE 30, 1996
SHORT-INTERMEDIATE BOND FUND
[GRAPHIC OMITTED]
Pie Chart -- Shown is a pie chart depicting the industry classification for the
Short-Intermediate Bond Fund. The following represent the plot points for
the chart:
Industry Classification % of Total Portfolio Investment
US Agency Backed Bonds 6
Corporate Bonds 50
U.S. Treasury Obligations 44
- -------------------------------------------------------
DESCRIPTION PAR (000) VALUE (000)
- -------------------------------------------------------
U.S. TREASURY OBLIGATIONS--43.9%
U.S. Treasury Notes
6.000%, 08/31/97 $ 1,500 $ 1,501
7.375%, 11/15/97 4,000 4,073
6.000%, 12/31/97 1,310 1,311
5.125%, 02/28/98 1,500 1,479
9.250%, 08/15/98 10,500 11,135
8.875%, 11/15/98 275 291
8.875%, 02/15/99 6,120 6,501
7.125%, 09/30/99 12,165 12,432
6.000%, 10/15/99 2,200 2,178
7.750%, 12/31/99 2,500 2,606
7.750%, 01/31/00 8 8
7.125%, 02/29/00 2,660 2,721
6.375%, 03/31/01 9,645 9,601
7.500%, 11/15/01 320 334
7.250%, 05/15/04 8,000 8,289
7.500%, 02/15/05 6,740 7,088
---------
TOTAL U.S. TREASURY OBLIGATIONS
(Cost $71,692) 71,548
---------
U.S. AGENCY MORTGAGE-BACKED BONDS--6.5%
FHLMC
6.500%, 10/15/00 1,003 989
6.750%, 03/15/07 1,755 1,738
6.250%, 11/15/08 663 655
6.000%, 02/15/16 1,725 1,705
FNMA
6.500%, 07/01/10 1,660 1,606
6.500%, 10/01/10 1,271 1,230
6.750%, 06/25/20 2,800 2,708
--------
TOTAL U.S. AGENCY MORTGAGE-BACKED BONDS
(Cost $10,697) 10,631
--------
- -------------------------------------------------------
DESCRIPTION PAR (000) VALUE (000)
- -------------------------------------------------------
CORPORATE OBLIGATIONS--29.7%
Associates Corporation of
North America
6.375%, 08/15/98 $ 1,500 $ 1,498
AT&T Capital
5.970%, 02/27/98 2,255 2,241
Bear Stearns
6.875%, 10/01/05 1,840 1,773
BHP Financial Limited
5.625%, 11/01/00 1,730 1,650
Coastal
8.125%, 09/15/02 1,370 1,425
Colonial National Bank
7.000%, 08/01/03 1,595 1,565
Conseco
10.500%, 12/15/04 1,085 1,199
CSR America
6.875%, 07/21/05 1,670 1,620
Dean Witter Discover
6.000%, 03/01/98 1,250 1,242
Fleet Financial Group
7.180%, 07/09/97 160 162
Fletcher Challenge
7.750%, 06/20/06 1,700 1,721
Ford Motor Credit
6.800%, 08/15/97 1,000 1,008
Great Lakes Power
8.900%, 12/01/99 990 1,042
H.F. Ahmanson
6.000%, 03/27/97 1,500 1,501
ITT
6.750%, 11/15/05 1,530 1,457
John Deere Capital
4.625%, 09/02/96 1,500 1,497
Lehman Brothers Holdings
8.750%, 03/15/05 2,000 2,140
MBNA America Bank
7.250%, 09/15/02 1,080 1,084
Merrill Lynch
6.000%, 01/15/01 2,000 1,925
Morgan Stanley Group
5.625%, 03/01/99 1,000 975
Nabisco
6.850%, 06/15/05 1,425 1,357
Noranda
8.125%, 06/15/04 1,350 1,401
Norwest Financial
6.250%, 02/15/97 1,500 1,504
Paine Webber Group
6.630%, 09/17/97 160 161
9.250%, 12/15/01 2,205 2,379
Penn Power and Light
7.750%, 05/01/02 1,280 1,317
Santander Financial Issuances
7.875%, 04/15/05 1,625 1,668
Security Pacific
11.500%, 11/15/00 1,955 2,285
System Energy Resources
10.500%, 09/01/96 725 730
Time Warner
7.750%, 06/15/05 1,645 1,608
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
64
<PAGE>
[] COREFUND FIXED INCOME FUNDS
- -------------------------------------------------------
DESCRIPTION PAR (000) VALUE (000)
- -------------------------------------------------------
Transcont Gas
8.125%, 01/15/97 $ 1,055 $ 1,067
United Air Lines
6.750%, 12/01/97 2,435 2,432
USX
9.625%, 08/15/03 1,490 1,663
---------
TOTAL CORPORATE OBLIGATIONS
(Cost $48,648) 48,297
---------
ASSET-BACKED SECURITIES--19.6%
Aames Mortgage Trust,
Ser 96-B A1B
7.275%, 05/15/20 2,100 2,114
American Express Master
Trust, Ser 94-1A
7.150%, 08/15/99 1,000 1,014
Banc One Credit Card Master
Trust, Ser 94-A
7.150%, 12/15/98 1,675 1,686
Case Equipment Loan Trust,
Ser 95-B A2
5.950%, 09/15/00 760 760
Contimortgage Home Equity
Loan Trust, Ser 96-1 A2
5.580%, 01/15/11 1,999 1,956
Contimortgage Home Equity
Loan Trust, Ser 95-4 A7
6.950%, 01/15/14 1,350 1,271
Delta Funding Home Equity Loan
Trust, Ser 96-1 A4
7.230%, 06/25/11 1,520 1,528
Equicredit Home Equity Loan
Trust, Ser 96-1 A3
6.190%, 12/15/10 1,450 1,372
Equivantage Home Loan Trust,
Ser 96-1 A1
6.550%, 04/01/27 1,247 1,215
Money Store Home Equity Trust,
Ser 93-B
5.400%, 08/15/05 2,796 2,701
Money Store Home Equity Trust,
Ser 96-A A7
7.360%, 03/15/24 1,365 1,359
Money Store Home Equity Trust,
Ser 96-B A7
7.550%, 06/15/20 3,000 3,026
- -------------------------------------------------------
DESCRIPTION PAR (000) VALUE (000)
- -------------------------------------------------------
Premier Auto Trust, Ser 94-4
6.450%, 05/02/98 $ 1,625 $ 1,631
Premier Auto Trust, Ser 95-1 A4
7.850%, 02/04/98 2,870 2,912
Sears Credit Account Master
Trust, Ser 95-3 A
7.000%, 10/15/04 3,000 3,039
Standard Credit Card Master
Trust, Ser 95-6 A
6.750%, 06/07/00 2,000 2,014
Union Acceptance, Ser 96-A
5.400%, 04/07/03 2,356 2,321
---------
TOTAL ASSET-BACKED SECURITIES
(Cost $32,053) 31,919
---------
TOTAL INVESTMENTS -- 99.7%
(Cost $163,091) $162,395
---------
OTHER ASSETS AND LIABILITIES,
NET -- 0.3% 508
---------
NET ASSETS:
Portfolio Shares - Class Y ($0.001 par
value - 100 million authorized) based on
16,370,741 outstanding shares 162,813
Portfolio Shares - Class A ($0.001 par
value - 100 million authorized) based on
313,718 outstanding shares 3,711
Accumulated Net Realized Loss on
Investments (2,925)
Net Unrealized Depreciation on
Investments (696)
--------
TOTAL NET ASSETS -- 100.0% $162,903
========
NET ASSET VALUE & REDEMPTION PRICE
PER SHARE
CLASS Y $9.76
========
CLASS A $9.76
========
CMO -- COLLATERALIZED MORTGAGE OBLIGATION
FHLMC -- FEDERAL HOME LOAN MORTGAGE CORPORATION
FNMA -- FEDERAL NATIONAL MORTGAGE ASSOCIATION
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
65
<PAGE>
STATEMENT
OF
NET ASSETS
AS OF
JUNE 30, 1996
GOVERNMENT INCOME FUND
[GRAPHIC OMITTED]
Pie Chart -- Shown is a pie chart depicting the industry classification for the
Government Income Fund. The following represent the plot points for the
chart:
Industry Classification % of Total Portfolio Investment
US Agency Backed Bonds 8
US Government Backed Bonds 76
U.S. Treasury Obligations 16
- -------------------------------------------------------
DESCRIPTION PAR (000) VALUE (000)
- -------------------------------------------------------
U.S. GOVERNMENT MORTGAGE-BACKED
BONDS -- 74.3%
GNMA
8.000%, 09/15/09 $ 730 $ 748
8.000%, 02/15/22 377 381
8.000%, 09/15/22 60 60
8.000%, 10/15/22 276 279
8.000%, 11/15/22 474 479
7.000%, 04/15/23 382 367
7.500%, 08/15/23 1,340 1,325
6.500%, 11/15/23 478 446
6.500%, 12/15/23 1,923 1,791
7.000%, 01/15/24 931 893
8.000%, 05/15/25 846 854
6.500%, 12/15/25 1,004 935
7.500%, 02/15/26 493 487
7.000%, 03/15/26 598 574
8.000%, 05/15/26 989 998
8.000%, 06/15/26 700 706
-------
TOTAL U.S. GOVERNMENT
MORTGAGE-BACKED BONDS
(Cost $11,556) 11,323
-------
U.S. AGENCY MORTGAGE-BACKED BONDS -- 7.4%
FHLMC
6.000%, 05/01/08 374 354
FNMA
7.000%, 10/01/22 795 766
-------
TOTAL U.S. AGENCY MORTGAGE-BACKED BONDS
(Cost $1,176) 1,120
-------
- -------------------------------------------------------
DESCRIPTION PAR (000) VALUE (000)
- -------------------------------------------------------
U.S. TREASURY OBLIGATIONS -- 15.1%
U.S. Treasury Bond
6.875%, 08/15/25 $ 750 $ 742
U.S. Treasury Notes
5.875%, 04/30/98 1,000 996
5.625%, 02/28/01 250 242
6.500%, 05/31/01 320 320
-------
TOTAL U.S. TREASURY OBLIGATIONS
(Cost $2,395) 2,300
-------
TOTAL INVESTMENTS -- 96.8%
(Cost $15,127) 14,743
-------
OTHER ASSETS AND LIABILITIES,
NET -- 3.2% 487
-------
NET ASSETS:
Portfolio Shares - Class Y ($0.001 par
value - 100 million authorized) based
on 1,449,067 outstanding shares 14,474
Portfolio Shares - Class A ($0.001 par
value - 100 million authorized) based
on 133,706 outstanding shares 1,369
Accumulated Net Realized Loss on
Investments (229)
Net Unrealized Depreciation on Investments (384)
-------
TOTAL NET ASSETS -- 100.0% $15,230
=======
NET ASSET VALUE & REDEMPTION PRICE
PER SHARE
CLASS Y $9.62
=======
CLASS A $9.62
=======
FHLMC -- FEDERAL HOME LOAN MORTGAGE CORPORATION
FNMA -- FEDERAL NATIONAL
MORTGAGE CORPORATION
GNMA -- GOVERNMENT NATIONAL MORTGAGE CORPORATION
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
66
<PAGE>
[] COREFUND FIXED INCOME FUNDS
BOND FUND
[GRAPHIC OMITTED]
Pie Chart -- Shown is a pie chart depicting the industry classification for the
Bond Fund. The following represent the plot points for the chart:
Industry Classification % of Total Portfolio Investment
US Agency Backed Bonds 21
US Government Backed Bonds 4
U.S. Treasury Obligations 34
Cash Equivalents 4
Corporate Bonds 37
- -------------------------------------------------------
DESCRIPTION PAR (000) VALUE (000)
- -------------------------------------------------------
U.S. TREASURY OBLIGATIONS--33.2%
U.S. Treasury Bonds
8.750%, 05/15/17 $ 1,850 $ 2,194
8.000%, 11/15/21 2,090 2,324
7.625%, 02/15/25 2,775 2,993
6.875%, 08/15/25 150 148
U.S. Treasury Notes
6.000%, 12/31/97 2,650 2,651
6.000%, 05/31/98 1,940 1,936
9.250%, 08/15/98 4,800 5,090
8.875%, 11/15/98 4,015 4,247
8.875%, 02/15/99 11,255 11,955
7.125%, 09/30/99 3,475 3,551
7.750%, 11/30/99 3,150 3,280
7.750%, 01/31/00 503 524
7.125%, 02/29/00 8,680 8,879
6.375%, 03/31/01 4,075 4,056
7.500%, 11/15/01 6,975 7,282
7.500%, 02/15/05 4,985 5,243
---------
TOTAL U.S. TREASURY OBLIGATIONS
(Cost $66,790) 66,353
---------
U.S. GOVERNMENT MORTGAGE-BACKED BONDS--24.5%
FHLMC
6.750%, 03/15/07 1,925 1,907
7.500%, 01/01/08 3,473 3,490
6.250%, 11/15/08 1,725 1,705
6.000%, 02/15/16 2,705 2,673
FNMA
6.500%, 07/01/10 3,406 3,294
6.500%, 09/01/10 3,881 3,753
7.500%, 06/01/11 2,699 2,712
7.500%, 06/01/11 1,759 1,767
6.750%, 01/25/16 1,740 1,730
6.500%, 03/25/19 1,660 1,617
8.500%, 01/25/20 1,836 1,909
6.750%, 06/25/20 3,180 3,076
7.000%, 05/01/23 3,710 3,569
- -------------------------------------------------------
DESCRIPTION PAR (000) VALUE (000)
- -------------------------------------------------------
7.500%, 08/01/25 $ 3,215 $ 3,174
7.500%, 09/01/25 4,757 4,695
GNMA
7.500%, 12/15/25 7,995 7,881
---------
TOTAL U.S. GOVERNMENT
MORTGAGE-BACKED BONDS
(Cost $49,251) 48,952
---------
ASSET-BACKED SECURITIES--8.4%
Aames Mortgage Trust,
Series 96-B A1B
7.275%, 05/15/20 2,374 2,390
Advanta Mortgage Loan Trust,
Series 96-2 A5
8.080%, 06/25/27 2,240 2,240
Contimortgage Home Equity
Loan Trust, Series 95-4 A7
6.950%, 01/15/14 1,900 1,788
Delta Funding Home Equity
Loan Trust, Series 96-1 A4
7.230%, 06/25/11 2,020 2,030
Equicredit Home Equity Loan
Trust, Series 96-1 A3
6.190%, 12/15/10 2,025 1,916
Equivantage Home Equity Loan
Trust, Series 96-1 A1
6.550%, 04/01/27 1,801 1,755
Money Store Home Equity
Trust, Series 96-A A7
7.360%, 03/15/24 1,575 1,568
Money Store Home Equity
Trust, Series 96-B A7
7.550%, 06/15/20 3,000 3,026
---------
TOTAL ASSET-BACKED SECURITIES
(Cost $16,888) 16,713
---------
NON-AGENCY MORTGAGE-BACKED BONDS--2.5%
GE Capital Mortgage Services,
Series 94-2 A4 (CMO)
6.000%, 01/25/09 2,680 2,606
Prudential Home Mortgage
Securities, Series 94-29
A5 (CMO)
7.000%, 10/25/24 2,595 2,467
---------
TOTAL NON-AGENCY MORTGAGE-BACKED BONDS
(Cost $5,094) 5,073
---------
CORPORATE BONDS--26.2%
Advanta
7.000%, 05/01/01 1,940 1,918
American Stores
8.000%, 06/01/26 2,110 2,115
Arco Chemical
10.250%, 11/01/10 1,990 2,497
AT&T Capital
5.970%, 02/27/98 2,210 2,196
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
67
<PAGE>
STATEMENT
OF
NET ASSETS
AS OF
JUNE 30, 1996
BOND FUND (CONCLUDED)
- -------------------------------------------------------
DESCRIPTION PAR (000) VALUE (000)
- -------------------------------------------------------
Boise Cascade
7.350%, 02/01/16 $ 1,175 $ 1,081
Coastal
10.250%, 10/15/04 1,940 2,267
Conseco
10.500%, 12/15/04 2,055 2,271
CSR Finance
7.700%, 07/21/25 1,815 1,786
Donaldson Lufkin & Jenrette
6.875%, 11/01/05 1,725 1,647
Fletcher Challenge Capital
8.250%, 06/20/16 2,000 2,027
Great Lakes Power
8.900%, 12/01/99 750 789
H.F. Ahmanson
6.000%, 03/27/97 1,900 1,901
ITT
7.375%, 11/15/15 3,570 3,365
Lehman Brothers Holdings
8.750%, 03/15/05 1,650 1,766
MBNA
7.250%, 09/15/02 1,745 1,752
Midland Bank
6.950%, 03/15/11 2,045 1,925
Nabisco
7.550%, 06/15/15 1,845 1,771
NationsBank
9.375%, 09/15/09 1,090 1,255
Noranda
8.125%, 06/15/04 1,940 2,013
Paine Webber Group
9.250%, 12/15/01 2,635 2,843
Quebec Province
7.500%, 07/15/23 2,085 1,989
Royal Bank of Scotland
6.375%, 02/01/11 1,870 1,674
Santander Fin Issuances
6.375%, 02/15/11 1,955 1,740
Smurfit Capital Funding
7.500%, 11/20/25 1,975 1,834
System Energy Resources
10.500%, 09/01/96 1,020 1,026
Time Warner
9.125%, 01/15/13 1,550 1,628
Tosco
7.625%, 05/15/06 1,410 1,399
USX
9.375%, 05/15/22 1,800 1,978
---------
TOTAL CORPORATE BONDS
(Cost $53,633) 52,453
---------
- -------------------------------------------------------
DESCRIPTION PAR (000) VALUE (000)
- -------------------------------------------------------
REPURCHASE AGREEMENT -- 4.1%
Sanwa Bank
5.40%, dated 06/28/96, matures
07/01/96, repurchase price
$8,183,681 (collateralized by
various U.S. Treasury Notes,
ranging in par value $1,865,000-
$6,455,000, 5.375%-5.875%,
07/31/97-11/30/97; total market
value $8,340,539) $8,180 $ 8,180
---------
TOTAL REPURCHASE AGREEMENT
(Cost $8,180) 8,180
---------
TOTAL INVESTMENTS -- 98.9%
(Cost $199,838) 197,724
---------
OTHER ASSETS AND LIABILITIES,
NET -- 1.1% 2,154
---------
NET ASSETS:
Portfolio Shares - Class Y ($0.001 par
value - 1 billion authorized) based
on 19,575,777 outstanding shares 201,684
Portfolio Shares - Class A ($0.001 par
value - 1 billion authorized) based
on 125,414 outstanding shares 1,330
Accumulated Net Realized Loss on
Investments (1,022)
Net Unrealized Depreciation on
Investments (2,114)
---------
TOTAL NET ASSETS -- 100.0% $199,878
=========
NET ASSET VALUE & REDEMPTION PRICE
PER SHARE
CLASS Y $10.15
=========
CLASS A $10.15
=========
(CMO) -- COLLATERALIZED MORTGAGE OBLIGATION
FHLMC -- FEDERAL HOME LOAN MORTGAGE CORPORATION
FNMA -- FEDERAL NATIONAL MORTGAGE ASSOCIATION
GNMA -- GOVERNMENT NATIONAL MORTGAGE ASSOCIATION
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
68
<PAGE>
SCHEDULE
OF
INVESTMENTS
[] COREFUND FIXED INCOME FUNDS
AS OF
JUNE 30, 1996
GLOBAL BOND FUND
[GRAPHIC OMITTED]
Pie Chart -- Shown is a pie chart depicting the security classification for the
Global Bond Fund. The following represent the plot points for the chart:
Industry Classification % of Total Portfolio Investment
United States 30
Portugal 5
New Zealand 5
Netherlands 9
Austraila 10
Denmark 12
France 8
Germany 19
Ireland 2
- -------------------------------------------------------
DESCRIPTION PAR (000)(1) VALUE (000)
- -------------------------------------------------------
FOREIGN BONDS -- 65.5%
AUSTRALIA -- 9.7%
Australian Government
8.750%, 01/15/01 $2,245 $ 1,777
New South Wales Treasury
12.000%, 12/01/01 1,600 1,428
-------
3,205
-------
DENMARK -- 11.4%
Kingdom of Denmark
8.000%, 03/15/06 10,030 1,780
8.000%, 05/15/03 10,958 1,986
-------
3,766
-------
FRANCE -- 7.9%
Electric de France
7.500%, 05/11/12 3,950 812
Government of France OAT
7.500%, 04/25/05 6,028 1,257
Kansai Electric Power
7.000%, 08/04/03 2,700 546
-------
2,615
-------
GERMANY -- 17.0%
Bundesrepublic
7.375%, 01/03/05 5,765 4,006
6.250%, 01/04/24 450 262
World Bank
7.125%, 04/12/05 1,980 1,355
-------
5,623
-------
IRELAND -- 1.9%
Government of Ireland
9.250%, 07/11/03 356 634
-------
- -------------------------------------------------------
DESCRIPTION PAR (000)(1) VALUE (000)
- -------------------------------------------------------
NETHERLANDS -- 8.7%
LKB Baden-Wuerttemburg
5.750%, 02/10/04 $2,420 $ 1,369
Kingdom of Netherlands
8.250%, 09/15/07 2,096 1,387
7.500%, 01/15/23 215 133
-------
2,889
-------
NEW ZEALAND -- 4.6%
Government of New Zealand
8.000%, 02/15/01 2,336 1,541
-------
PORTUGAL -- 4.3%
Republic of Portugal
7.700%, 06/07/05 FRF 6,910 1,439
-------
TOTAL FOREIGN BONDS
(Cost $21,506) 21,712
-------
U.S. TREASURY OBLIGATIONS -- 28.3%
U.S. Treasury Notes
7.750%, 11/30/99 $ 1,510 1,573
4.750%, 09/30/98 6,800 6,602
6.875%, 07/31/99 1,180 1,198
-------
TOTAL U.S. TREASURY OBLIGATIONS
(Cost $9,453) 9,373
-------
DEBT OPTIONS -- 0.3%
Bundrepublic 7.375% Put,
strike 105.39* 7,300 46
Government of France OAT
7.5% Put, strike 106.7* 23,000 56
-------
TOTAL DEBT OPTIONS
(Cost $147) 102
-------
CURRENCY OPTIONS -- 0.7%
Deutsche Mark Call, strike 1.525 6,700 122
Deutsche Mark Call, strike 1.5141 8,500 125
-------
TOTAL CURRENCY OPTIONS
(Cost $278) 247
-------
TOTAL INVESTMENTS -- 94.8%
(Cost $31,384) $31,434
=======
* NON-INCOME PRODUCING SECURITY
FRF -- FRENCH FRANCS
(1) IN LOCAL CURRENCY UNLESS OTHERWISE INDICATED
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
69
<PAGE>
STATEMENT
OF
NET ASSETS
AS OF
JUNE 30, 1996
INTERMEDIATE MUNICIPAL BOND FUND
[GRAPHIC OMITTED]
Pie Chart -- Shown is a pie chart depicting the industry classification for the
Intermediate Municipal Fund. The following represent the plot points for the
chart:
Industry Classification % of Total Portfolio Investment
Cash Equivalents 5
Pre-Refunded Securities 15
General Obligations 35
Revenue Bonds 45
- -------------------------------------------------------
DESCRIPTION PAR (000) VALUE (000)
- -------------------------------------------------------
MUNICIPAL BONDS--92.3%
FLORIDA -- 3.6%
Jacksonville, Florida Electric
Authority Revenue Bond,
Series 3-A
5.200%, 10/01/02 $ 50 $ 51
-------
GEORGIA -- 3.6%
De Kalb County, Georgia Health
Facilities GO
5.300%, 01/01/03 50 51
-------
HAWAII -- 3.5%
Hawaii State GO
5.200%, 06/01/04 50 50
-------
MARYLAND -- 3.6%
Maryland State Health & Higher
Education Facilities Authority
Revenue Bond for Johns
Hopkins Project
5.125%, 07/01/03 50 51
-------
MASSACHUSETTS -- 3.6%
Massachusetts Bay Transportation
Authority Revenue Bond, Series A
5.300%, 03/01/05 50 51
-------
MICHIGAN -- 7.1%
Grand Haven, Michigan Electric
Revenue Bond (MBIA)
5.000%, 07/01/04 100 100
-------
NEW JERSEY -- 3.6%
Burlington County, New Jersey
Community Bridge Systems
Revenue Bond, Callable
10/01/03 at 101 (CG)
5.050%, 10/01/04 50 51
-------
- -------------------------------------------------------
DESCRIPTION PAR (000) VALUE (000)
- -------------------------------------------------------
OREGON -- 3.5%
Umatilla County, Oregon Franciscan
Health Systems Revenue
Bond (A) (SG)
3.650%, 12/01/24 $ 50 $ 50
-------
PENNSYLVANIA -- 58.4%
Allegheny County Revenue Bond
for Pennsylvania Community
College Project, Series A (CG)
4.375%, 07/15/02 100 95
Allegheny County, Pennsylvania,
Series C-33, GO
7.450%, 02/15/98 50 52
Bethlehem, Pennsylvania School
District GO (FGIC)
4.800%, 09/01/01 50 50
Governor Mifflin, Pennsylvania
School District GO (AMBAC)
4.850%, 11/15/01 50 50
Luzerne County, Pennsylvania,
Series A, GO, Callable 09/15/00
at 100 (FGIC)
5.850%, 09/15/02 50 52
Pennsylvania State Higher Education
Facilities Authority Hospital
Revenue Bond for Thomas
Jefferson University Project,
Pre-refunded 01/01/98 at 102
8.000%, 01/01/18 85 91
Pennsylvania State Infrastructure
Authority Revenue Bond for
Pennvest Loan Pool Project
(MBIA)
6.000%, 09/01/03 65 69
Pennsylvania State Turnpike
Commission Revenue Bond,
Series F, Pre-Refunded 12/01/99
at 102 (AMBAC)
7.250%, 12/01/17 50 55
Pennsylvania State Turnpike
Commission Revenue Bond,
Series 1, Pre-Refunded 12/01/01
at 102 (FGIC)
7.150%, 12/01/11 50 56
Pittsburgh, Pennsylvania School
District, Series A, GO (FGIC)
4.850%, 09/01/03 100 99
Reading, Pennsylvania Parking
Authority Revenue Bond (MBIA)
4.950%, 11/15/02 50 50
Wallenpaupack, Pennsylvania Area
School District, Series C, GO,
Callable 09/01/00 at 100 (FGIC)
6.000%, 09/01/03 50 52
West View, Pennsylvania Municipal
Water Authority Revenue Bond
(FGIC)
4.800%, 11/15/06 60 57
-------
828
-------
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
70
<PAGE>
[] COREFUND FIXED INCOME FUNDS
- -------------------------------------------------------
DESCRIPTION PAR (000) VALUE (000)
- -------------------------------------------------------
TENNESSEE -- 1.8%
Tennessee State, Series B, GO
5.900%, 06/01/98 $ 25 $ 26
-------
TOTAL MUNICIPAL BONDS
(Cost $1,313) 1,309
-------
CASH EQUIVALENT--4.9%
SEI Institutional Tax Free Portfolio 70 70
-------
TOTAL CASH EQUIVALENT
(Cost $70) 70
-------
TOTAL INVESTMENTS -- 97.2%
(Cost $1,383) 1,379
-------
OTHER ASSETS AND LIABILITIES,
NET -- 2.8% 39
-------
NET ASSETS:
Portfolio Shares - Class Y ($0.001 par
value - 100 million authorized) based on
40,637 outstanding shares 441
Portfolio Shares - Class A ($0.001 par
value - 100 million authorized) based on
102,290 outstanding shares 1,058
- -------------------------------------------------------
DESCRIPTION VALUE (000)
- -------------------------------------------------------
Accumulated Net Realized Loss on
Investments $ (77)
Net Unrealized Depreciation on
Investments (4)
-------
TOTAL NET ASSETS -- 100.0% $1,418
=======
NET ASSET VALUE & REDEMPTION PRICE
PER SHARE
CLASS Y $9.92
=======
CLASS A $9.92
=======
GO -- GENERAL OBLIGATION
(A) VARIABLE RATE SECURITY -- THE RATE SHOWN ON THE STATEMENT OF NET ASSETS IS
THE RATE IN EFFECT ON JUNE 30, 1996
AMBAC -- AMERICAN MUNICIPAL BOND ASSURANCE COMPANY
CG -- COUNTY GUARANTY
FGIC -- FINANCIAL GUARANTY INSURANCE COMPANY
MBIA -- MUNICIPAL BOND INVESTORS ASSURANCE
SG -- SOCIETE GENERALE
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
71
<PAGE>
STATEMENT
OF
NET ASSETS
AS OF
JUNE 30, 1996
PENNSYLVANIA MUNICIPAL BOND FUND
[GRAPHIC OMITTED]
Pie Chart -- Shown is a pie chart depicting the industry classification for the
Pennsylvania Municipal Bond Fund. The following represent the plot points
for the chart:
Industry Classification % of Total Portfolio Investment
Cash Equivalents 1
Pre-Refunded Securities 1
General Obligations 33
Revenue Bonds 65
- -------------------------------------------------------
DESCRIPTION PAR (000) VALUE (000)
- -------------------------------------------------------
MUNICIPAL BONDS -- 97.9%
PENNSYLVANIA -- 97.9%
Allegheny County, Pennsylvania
GO, Series C-43, Callable
09/15/04 at 100 (MBIA)
5.875%, 09/15/10 $ 60 $ 61
5.875%, 09/15/13 100 101
Allegheny County, Pennsylvania
Hospital Development Authority
Revenue Bond for Mercy Hospital
of Pittsburgh (AMBAC)
6.450%, 04/01/01 200 213
Allegheny County, Pennsylvania
Hospital Development Authority
Revenue Bond for Montefiore
Hospital Association
5.800%, 10/01/03 140 143
Allegheny County, Pennsylvania
Hospital Development Authority
Revenue Bond for Presbyterian
Health Center, Series B, Callable
11/01/02 at 102 (MBIA)
6.000%, 11/01/12 25 25
Allegheny County, Pennsylvania
Redevelopment Authority
Revenue Bond for Home
Improvement Loan Project,
Series A, Callable 02/01/04
at 102 (FHA)
5.700%, 02/01/07 15 15
Allegheny County, Pennsylvania
Sanitation Authority Sewer
Revenue Bond, Series B,
Callable 06/01/99 at 100 (FGIC)
7.450%, 12/01/09 130 141
- -------------------------------------------------------
DESCRIPTION PAR (000) VALUE (000)
- -------------------------------------------------------
Berks County, Pennsylvania
Revenue Bond for Reading
Hospital & Medical Center,
Series B, Callable 10/01/04
at 102 (MBIA)
5.600%, 10/01/06 $ 65 $ 66
Burrell, Pennsylvania School
District GO (FGIC)
5.250%, 11/15/10 215 207
Center City District, Pennsylvania
Business Improvement
Assessment Bond, Callable
12/01/07 at 100 (AMBAC)
5.600%, 12/01/08 60 60
Central Bucks, Pennsylvania
School District GO, Callable
02/01/01 at 100
6.600%, 06/01/03 175 187
Chester County, Pennsylvania
GO, Series B
5.625%, 11/15/16 100 97
Crawford, Pennsylvania Central
School District GO (FGIC)
7.000%, 02/15/05 100 113
Dauphin County, Pennsylvania
GO (MBIA)
5.450%, 08/01/07 200 201
Delaware County, Pennsylvania GO
7.100%, 12/01/98 170 172
5.500%, 10/01/15 75 73
Delaware County, Pennsylvania
Revenue Bond for Villanova
University (AMBAC)
5.400%, 08/01/08 200 198
Dover Township, Pennsylvania
Sewer Authority Revenue Bond
6.250%, 05/01/12 20 21
Elizabethtown, Pennsylvania Area
School District GO (MBIA)
5.125%, 09/01/09 265 257
Erie County, Pennsylvania Prison
Authority Revenue Bond (MBIA)
5.850%, 11/01/96 100 101
Hampden Township, Pennsylvania
Sewer Authority Special
Obligation Bond, Callable
10/01/96 at 100
5.350%, 04/01/03 130 132
Hempfield, Pennsylvania School
District GO
5.300%, 10/15/14 250 234
Lower Burrell, Pennsylvania City
Municipal Sewer Authority
Revenue Bond (AMBAC)
5.125%, 02/01/16 250 230
Lower Merion Township,
Pennsylvania GO, Callable
08/01/02 at 100
5.625%, 08/01/05 100 103
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
72
<PAGE>
[] COREFUND FIXED INCOME FUNDS
- -------------------------------------------------------
DESCRIPTION PAR (000) VALUE (000)
- -------------------------------------------------------
Manheim, Pennsylvania Central
School District GO, Callable
05/15/04 at 100 (FGIC)
6.100%, 05/15/14 $100 $ 101
Millcreek Township, Pennsylvania
Sewer Authority Revenue Bond,
Callable 11/01/99 at 100 (MBIA)
6.000%, 11/01/06 150 157
Montgomery County,
Pennsylvania GO,
Callable 10/15/03 at 100
5.750%, 10/15/11 175 176
Montgomery County, Pennsylvania
Higher Education and Health
Authority Revenue Bond for
Abington Memorial Hospital,
Series A (AMBAC)
5.125%, 06/01/14 250 228
Nazareth, Pennsylvania Area School
District GO, Callable 05/15/02
at 100 (AMBAC)
5.500%, 11/15/12 200 195
North Wales, Pennsylvania Water
Authority Revenue Bond
6.750%, 11/01/10 100 112
Northampton County, Pennsylvania
Higher Education Authority
Revenue Bond for Lehigh
University, Series A (MBIA)
5.750%, 11/15/18 150 149
Pennsylvania State Convention
Center Authority Revenue Bond,
Series A (FGIC)
6.700%, 09/01/16 75 83
Pennsylvania State GO,
Callable 09/01/99 at 100
6.250%, 09/01/00 150 153
Pennsylvania State GO, Second Series
6.000%, 07/01/05 25 26
Pennsylvania State GO, Series 2
6.250%, 07/01/11 60 64
Pennsylvania State Higher Education
Facilities Authority Health Services
Revenue Bond for Allegheny/
Delaware Valley, Series A (MBIA)
5.500%, 11/15/08 400 398
Pennsylvania State Higher Education
Facilities Authority Revenue Bond
Callable 12/15/02 at 100 (AMBAC)
6.000%, 12/15/09 225 231
Pennsylvania State Higher Education
Facilities Authority Revenue Bond
for Allegheny General Hospital,
Series A
6.300%, 09/01/97 200 204
Pennsylvania State Higher Education
Facilities Authority Revenue Bond
for Health Services, Series A,
Callable 01/01/04 at 102
6.000%, 01/01/10 100 103
- -------------------------------------------------------
DESCRIPTION PAR (000) VALUE (000)
- -------------------------------------------------------
Pennsylvania State Higher Education
Facilities Authority Revenue Bond
for Thomas Jefferson University,
Series A, Callable 07/01/99 at 102
6.000%, 07/01/19 $150 $ 151
Pennsylvania State Higher Education
Facilities Authority Revenue Bond
for University of Pennsylvania,
Series B
5.700%, 01/01/11 150 149
5.850%, 09/01/13 100 100
Pennsylvania State Housing Finance
Agency Revenue Bond, Series C
6.400%, 07/01/12 300 303
Pennsylvania State Industrial
Development Authority Revenue
Bond (AMBAC)
6.000%, 01/01/05 25 26
5.800%, 07/01/09 250 255
6.000%, 01/01/12 100 102
Pennsylvania State Infrastructure
Investment Authority Revenue
Bond for Pennvest Loan
Pool (MBIA)
6.000%, 09/01/04 400 424
Pennsylvania State Turnpike
Commission Revenue Bond,
Series O, Callable 12/01/02
at 102 (FGIC)
5.900%, 12/01/08 125 127
Pennsylvania State Turnpike
Commission Revenue Bond,
Series P
5.100%, 12/01/99 250 254
5.350%, 12/01/01 250 256
5.800%, 12/01/06 75 78
Pennsylvania State University
Revenue Bond
5.200%, 03/01/98 250 253
Pennsylvania State University
Revenue Bond, Callable
03/01/04 at 100
6.150%, 03/01/05 185 196
Philadelphia, Pennsylvania Gas
Works Revenue Bond,
Series 15 (MBIA)
4.600%, 08/01/03 250 241
Philadelphia, Pennsylvania
Hospitals and Higher Education
Facilities Authority Revenue
Bond for Pennsylvania Hospital,
Series A (FGIC)
5.250%, 02/15/14 250 232
Pittsburgh, Pennsylvania GO,
Series D, Callable 09/01/02
at 102 (AMBAC)
6.125%, 09/01/17 25 26
73
<PAGE>
STATEMENT
OF
NET ASSETS
AS OF
JUNE 30, 1996
PENNSYLVANIA MUNICIPAL BOND FUND (CONCLUDED)
- -------------------------------------------------------
DESCRIPTION PAR (000) VALUE (000)
- -------------------------------------------------------
Pittsburgh, Pennsylvania Higher
Education Authority Revenue
Bond for University Capital
Project, Series A, Callable
06/01/02 at 102 (MBIA)
6.125%, 06/01/21 $115 $ 118
Radnor Township, Pennsylvania GO,
Callable 05/01/06 at 100
5.250%, 11/01/16 200 186
Rose Tree/Media, Pennsylvania
School District GO (FGIC)
5.350%, 02/15/10 150 147
Scranton-Lackawanna, Pennsylvania
Health and Welfare Authority
Revenue Bond for University
of Scranton, Series A
6.150%, 03/01/03 150 156
Seneca Valley, Pennsylvania GO
5.850%, 02/15/15 105 104
Wayne County, Pennsylvania
Housing Authority Revenue
Bond for Section 8 Assisted
Project (MBIA)
5.350%, 10/01/07 190 185
York, Pennsylvania City School
District GO, Callable 03/01/03
at 100 (FGIC)
5.600%, 03/01/07 75 76
-------
TOTAL MUNICIPAL BONDS
(Cost $9,658) 9,676
-------
CASH EQUIVALENT -- 0.9%
SEI Institutional
Tax Free Portfolio 85 85
-------
TOTAL CASH EQUIVALENT
(Cost $85) 85
-------
TOTAL INVESTMENTS -- 98.8%
(Cost $9,743) 9,761
-------
OTHER ASSETS AND LIABILITIES,
NET -- 1.2% 122
-------
- -------------------------------------------------------
DESCRIPTION VALUE (000)
- -------------------------------------------------------
NET ASSETS:
Portfolio Shares - Class Y ($0.001 par
value - 100 million authorized) based on
869,658 outstanding shares $8,982
Portfolio Shares - Class A ($0.001 par
value - 100 million authorized) based on
97,222 outstanding shares 1,000
Accumulated Net Realized Loss on
Investments (117)
Net Unrealized Appreciation on
Investments 18
-------
TOTAL NET ASSETS -- 100.0% $9,883
=======
NET ASSET VALUE & REDEMPTION PRICE
PER SHARE
CLASS Y $10.22
=======
CLASS A $10.22
=======
AMBAC -- AMERICAN MUNICIPAL BOND ASSURANCE COMPANY
FGIC -- FINANCIAL GUARANTY INSURANCE COMPANY
FHA -- FEDERAL HOUSING AGENCY
FNMA -- FEDERAL NATIONAL MORTGAGE ASSOCIATION
MBIA -- MUNICIPAL BOND INVESTORS ASSURANCE
GO -- GENERAL OBLIGATION
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
74
<PAGE>
SCHEDULE
OF
INVESTMENTS
[] COREFUND FIXED INCOME FUNDS
AS OF
JUNE 30, 1996
NEW JERSEY MUNICIPAL BOND FUND
[GRAPHIC OMITTED]
Pie Chart -- Shown is a pie chart depicting the industry classification for the
New Jersey Municipal Bond Fund. The following represent the plot points for
the chart:
Industry Classification % of Total Portfolio Investment
Cash Equivalents 5
General Obligations 44
Revenue Bonds 51
- -------------------------------------------------------
DESCRIPTION PAR (000) VALUE (000)
- -------------------------------------------------------
MUNICIPAL BONDS -- 83.6%
NEW JERSEY -- 68.2%
Bayonne, New Jersey GO (FGIC)
5.900%, 05/01/08 $150 $ 154
Cherry Hill Township,
New Jersey GO
5.900%, 06/01/05 50 53
Flemington-Raritan, New Jersey
Regional School District GO
5.700%, 05/01/06 50 51
Marlboro Township, New Jersey
GO (FGIC)
5.500%, 07/15/09 40 40
Millburn Township, New Jersey GO
5.350%, 07/15/12 100 99
Monmouth County, New Jersey
Improvement Authority
Revenue Bond (CG)
6.625%, 12/01/05 40 43
New Jersey Health Care Facilities
Finance Authority Revenue Bond
for Bridgeton Hospital Association,
Series B
6.000%, 07/01/13 50 51
New Jersey Health Care Facilities
Finance Authority Revenue Bond
for Burlington County Memorial
Hospital Project
6.000%, 07/01/12 50 51
New Jersey State Economic
Development Authority Revenue
Bond for Peddie School Project,
Series A
5.400%, 02/01/06 50 51
- -------------------------------------------------------
DESCRIPTION PAR (000) VALUE (000)
- -------------------------------------------------------
New Jersey State Economic
Development Authority Revenue
Bond for Rutgers State University
(AMBAC)
6.125%, 07/01/24 $ 55 $ 56
New Jersey State Educational
Facilities Authority Revenue
Bond for University of Medicine
and Dentistry, Series B (AMBAC)
5.250%, 12/01/13 60 56
New York & New Jersey States Port
Authority Revenue Bond,
Eighty-First Series
5.700%, 08/01/07 50 51
North Brunswick Township,
New Jersey GO
6.125%, 05/15/04 24 26
North Brunswick Township,
New Jersey GO,
Callable 02/01/05 at 100
6.300%, 02/01/12 150 158
Secaucus, New Jersey Sewer
Authority Revenue Bond, Series A
6.100%, 12/01/10 60 63
South Monmouth, New Jersey Sewer
Authority Revenue Bond (MBIA)
5.550%, 01/15/06 50 51
West Windsor Township, New Jersey
Parking Authority Revenue Bond
6.100%, 12/01/12 50 52
-------
1,106
-------
OREGON -- 3.1%
Umatilla County, Oregon Hospital
Facilities Authority Revenue Bond
for Franciscan Health Systems
Project, Series B (A) (TD)
3.650%, 12/01/24 50 50
-------
VIRGINIA -- 12.3%
Peninsula Ports Authority of
Virginia Revenue Bond for
Dominion Terminal Project,
Series C (A) (NW)
3.600%, 07/01/16 200 200
-------
TOTAL MUNICIPAL BONDS
(Cost $1,333) 1,356
-------
CASH EQUIVALENT -- 4.6%
SEI Institutional
Tax Free Portfolio 75 75
-------
TOTAL CASH EQUIVALENT
(Cost $75) 75
-------
TOTAL INVESTMENTS -- 88.2%
(Cost $1,408) $1,431
=======
GO -- GENERAL OBLIGATION
(A) VARIABLE RATE SECURITY -- THE RATE REPORTED ON THE STATEMENT OF NET ASSETS
IS THE RATE IN EFFECT ON JUNE 30, 1996.
AMBAC -- AMERICAN MUNICIPAL BOND ASSURANCE COMPANY
CG -- COUNTY GUARANTY
FGIC -- FINANCIAL GUARANTY INSURANCE COMPANY
TD -- TORONTO DOMINION BANK
NW -- NATIONAL WESTMINSTER
MBIA -- MUNICIPAL BOND INVESTORS ASSURANCE
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
75
<PAGE>
[This page intentionally left blank.]
<PAGE>
STATEMENT OF ASSETS AND LIABILITIES
(000)
[] COREFUND FIXED INCOME FUNDS
FOR THE PERIOD
ENDED
JUNE 30, 1996
<TABLE>
<CAPTION>
--------- --------------
GLOBAL NEW JERSEY
BOND FUND MUNICIPAL FUND
--------- --------------
<S> <C> <C>
ASSETS:
Investments at Market Value (Cost $31,384, $1,408, respectively) $ 31,434 $ 1,431
Cash 1,192 79
Foreign Currency (Cost $328) 328 --
Receivable for Accrued Interest 691 20
Other Assets 88 103
-------- --------
Total Assets 33,733 1,633
-------- --------
LIABILITIES:
Income Distribution Payable 554 5
Other Liabilities 29 7
-------- --------
Total Liabilities 583 12
-------- --------
NET ASSETS:
Portfolio Shares--Class Y ($0.001 Par Value--25 million authorized) based
on 3,402,528 outstanding shares, and ($0.001 Par Value --100 million
authorized)
based on 130,650 outstanding shares, respectively 33,829 1,278
Portfolio Shares-- Class A ($0.001 Par Value--25 million authorized) based
on 15,642 outstanding shares, and ($0.001 Par Value--100 million
authorized)
based on 30,193 outstanding shares, respectively 156 310
Accumulated Net Realized Gain (Loss) on Investments (990) 10
Net Unrealized Appreciation on Foreign Currency and
Translation of Other Assets and Liabilities
Denominated in Foreign Currencies 73 --
Net Unrealized Appreciation on Investments 50 23
Undistributed Net Investment Income 32 --
-------- --------
TOTAL NET ASSETS $ 33,150 $ 1,621
======== ========
NET ASSET VALUE AND REDEMPTION PRICE PER SHARE
CLASS Y $ 9.70 $ 10.08
======== ========
CLASS A $ 9.68 $ 10.07
======== ========
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
77
<PAGE>
<PAGE>
STATEMENT
OF
OPERATIONS
(000)
[] COREFUND FIXED INCOME FUNDS
FOR THE PERIOD
ENDED
JUNE 30, 1996
<TABLE>
<CAPTION>
---------- ------------ ----------- ------- ------- ------------ ------------ ----------
SHORT TERM SHORT- GLOBAL INTERMEDIATE PENNSYLVANIA NEW JERSEY
INCOME INTERMEDIATE GOVERNMENT BOND BOND MUNICIPAL MUNICIPAL MUNICIPAL
FUND(3) BOND FUND INCOME FUND FUND(3) FUND BOND FUND BOND FUND BOND FUND
---------- ------------ ----------- ------- ------- ------------ ------------ ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
INVESTMENT INCOME
Interest $ 1,286 $ 5,147 $ 988 $ 8,920 $ 2,080 $ 59 $ 244 $ 84
------- ------- ------- ------- ------- ------- ------- -------
Total Investment income 1,286 5,147 988 8,920 2,080 59 244 84
------- ------- ------- ------- ------- ------- ------- -------
EXPENSES
Investment advisory fees 164 404 72 966 191 6 22 8
Waiver of investment advisory fees (108) (137) (23) (509) (45) (5) (22) (8)
Administrative fees 42 202 36 251 80 3 11 4
Waiver of administrative fees (6) (74) (13) (34) (29) (1) (11) (4)
Transfer agent fees & expenses 5 20 5 41 12 3 5 1
Custodian fees -- -- -- (14) 15 -- -- --
Professional fees 5 10 2 23 -- (3) 1 --
Registration & filing fees 5 3 11 8 5 (2) -- 2
12b-1 fees -- 5 3 2 -- 2 1 --
Taxes--other than income -- (13) (4) -- 2 (1) -- --
Printing fees -- 16 1 (2) 4 -- 1 --
Organizational costs 3 -- 6 -- 3 10 1 2
Miscellaneous 2 15 -- (7) (9) 1 1 2
------- ------- ------- ------- ------- ------- ------- -------
Total expenses 112 451 96 725 229 13 10 7
------- ------- ------- ------- ------- ------- ------- -------
NET INVESTMENT INCOME 1,174 4,696 892 8,195 1,851 46 234 77
------- ------- ------- ------- ------- ------- ------- -------
NET REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS: Net realized gain
(loss) from:
Security transactions (81) (987) 31 (1,251) 496 -- (30) 16
Option transactions -- -- -- -- (283) -- -- --
Net realized gain on forward foreign
currency contracts and foreign
currency transactions -- -- -- -- 984 -- -- --
Net unrealized appreciation on
forward foreign currency contracts
and translation of other assets
and liabilities in foreign
currencies -- -- -- -- 167 -- -- --
Net change in unrealized appreciation
(depreciation) on investments (170) 156 (414) (4,687) (805) 13 36 (8)
------- ------- ------- ------- ------- ------- ------- -------
NET INCREASE IN NET ASSETS RESULTING
FROM OPERATIONS $ 923 $ 3,865 $ 509 $ 2,257 $ 2,410 $ 59 $ 240 $ 85
======= ======= ======= ======= ======= ======= ======= =======
COMPUTATION OF NET ASSET VALUE AND OFFERING
PRICE - JUNE 30, 1996:
CLASS Y
1Net asset value, offer and
redemption price $ 9.94 $ 9.76 $ 9.62 $ 10.15 $ 9.70 $ 9.92 $ 10.22 $ 10.08
======= ======= ======= ======= ======= ======= ======= =======
CLASS A
1Net asset value, redemption price 9.93 9.76 9.62 10.15 9.68 9.92 10.22 10.07
Maximum sales charge of 3.25% 0.33 0.33 0.32 0.34 0.33 0.33 0.34 0.34
------- ------- ------- ------- ------- ------- ------- -------
2Offering price $ 10.26 $ 10.09 $ 9.94 $ 10.49 $ 10.01 $ 10.25 $ 10.56 $ 10.41
======= ======= ======= ======= ======= ======= ======= =======
<FN>
AMOUNTS DESIGNATED AS "--" ARE EITHER $0 OR HAVE BEEN ROUNDED TO $0.
1 NET ASSET VALUE PER SHARE, AS ILLUSTRATED, IS THE AMOUNT WHICH WOULD BE PAID
UPON THE REDEMPTION OR EXCHANGE OF SHARES.
2 THE OFFER PRICE IS CALCULATED BY DIVIDING THE NET ASSET VALUE OF CLASS A BY 1
MINUS THE MAXIMUM SALES CHARGE OF 3.25%.
3 DUE TO THE MERGER OF THIS FUND WITH A CONESTOGA FUND, AMOUNTS REPRESENT ACTIVITY
FOR THE PERIOD NOVEMBER 1, 1995 THROUGH JUNE 30, 1996. PLEASE SEE THE NOTES TO
THE FINANCIAL STATEMENTS FOR FURTHER DETAILS REGARDING THE MERGER.
</FN>
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
78 & 79
<PAGE>
STATEMENT
OF CHANGES
IN NET ASSETS
(000)
[] COREFUND FIXED INCOME FUNDS
FOR THE PERIODS
ENDED
JUNE 30
<TABLE>
<CAPTION>
---------------- ----------------- ----------------- --------------------
SHORT-
SHORT TERM INTERMEDIATE GOVERNMENT BOND
INCOME FUND BOND FUND INCOME FUND FUND
---------------- ------------------ ----------------- --------------------
1996(1) 1995(3) 1996 1995 1996 1995 1996(1) 1995(3)
------- ------- -------- ------- ------- ------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
OPERATIONS:
Net investment income $ 1,174 $ 981 $ 4,696 $ 3,311 $ 892 $ 732 $ 8,196 $ 6,198
Net realized gain (loss) from security
transactions and foreign
currency transactions (81) 32 (987) (738) 31 (213) (1,252) 3,058
Net unrealized appreciation (depreciation)
on investments,
forward foreign currency contracts and
translation of
assets and liabilites in foreign
currencies (170) 92 156 1,857 (414) 611 (4,687) 3,499
------- ------- -------- ------- ------- ------- -------- --------
Net increase (decrease) in net assets
resulting from operations 923 1,105 3,865 4,430 509 1,130 2,257 12,755
------- ------- -------- ------- ------- ------- -------- --------
DIVIDENDS DISTRIBUTED FROM:
Net investment income:
Prior Class (a) -- -- -- -- -- -- -- (359)
Retail Class (b) -- -- -- -- -- -- -- (56)
Institutional Class (b) -- (917) -- -- -- -- -- (5,443)
Class Y (c) (1,238) -- (4,567) (2,981) (812) (648) (8,523) --
Class A (c) -- -- (123) (331) (78) (86) (56) --
Net realized gains:
Prior Class (a) -- -- -- -- -- -- -- --
Retail Class (b) -- -- -- -- -- -- (10) --
Institutional Class (b) (32) -- -- -- -- -- (1,458) --
Class Y (c) -- -- -- (9) -- (1) -- --
Class A (c) -- -- -- (2) -- -- -- --
------- ------- -------- ------- ------- ------- -------- --------
Total dividends distributed (1,270) (917) (4,690) (3,323) (890) (735) (10,047) (5,858)
------- ------- -------- ------- ------- ------- -------- --------
CAPITAL TRANSACTIONS (2):
Prior Class (a):
Redesignated to Retail Class (b) -- -- -- -- -- -- -- (1,365)
Redesignated to Institutional Class (b) -- -- -- -- -- -- -- (29,097)
Proceeds from shares issued -- -- -- -- -- -- -- 9,204
Reinvestment of cash distributions -- -- -- -- -- -- -- 244
Cost of shares redeemed -- -- -- -- -- -- -- (2,665)
------- ------- -------- ------- ------- ------- -------- --------
Increase (decrease) in net assets from
Prior Class transactions -- -- -- -- -- -- -- (23,679)
------- ------- -------- ------- ------- ------- -------- --------
Retail Class (b):
Redesignated from Prior Class (a) -- -- -- -- -- -- -- 1,365
Exchanged for Class A Shares (1) -- -- -- -- -- (1,294) --
Proceeds from shares issued -- 11 -- -- -- -- 122 164
Reinvestment of cash distributions -- -- -- -- -- -- 44 48
Cost of shares redeemed (11) -- -- -- -- -- (198) (291)
------- ------- -------- ------- ------- ------- -------- --------
Increase (decrease) in net assets from
Retail Class transactions (12) 11 -- -- -- -- (1,326) 1,286
------- ------- -------- ------- ------- ------- -------- --------
Institutional Class (b):
Redesignated from Prior Class (a) -- -- -- -- -- -- -- 29,097
Exchanged for Class Y Shares (29,918) -- -- -- -- -- (194,533) --
Proceeds from shares issued 5,788 46,933 -- -- -- -- 28,200 192,154
Reinvestment of cash distributions 931 917 -- -- -- -- 7,057 5,109
Cost of shares redeemed (12,577) (11,979) -- -- -- -- (28,354) (38,426)
------- ------- -------- ------- ------- ------- -------- --------
Increase (decrease) in net assets from
Institutional Class transactions (35,776) 35,871 -- -- -- -- (187,630) 187,934
------- ------- -------- ------- ------- ------- -------- --------
Class Y (c):
Proceeds from shares issued in merger (d) 29,918 -- 113,422 -- -- -- 194,533 --
Proceeds from shares issued 2,116 -- 16,680 17,116 5,296 3,952 13,215 --
Reinvestment of cash distributions 203 -- 3,735 2,752 412 268 1,409 --
Cost of shares redeemed (2,040) -- (28,327) (14,254) (2,718) (2,353) (9,632) --
------- ------- -------- ------- ------- ------- -------- --------
Increase in net assets from Class Y
transactions 30,197 -- 105,510 5,614 2,990 1,867 199,525 --
------- ------- -------- ------- ------- ------- -------- --------
Class A (c):
Proceeds from shares issued in merger (d) 1 -- 1,207 -- -- -- 1,294 --
Proceeds from shares issued -- -- 282 62 157 170 65 --
Reinvestment of cash distributions -- -- 85 325 70 72 13 --
Cost of shares redeemed -- -- (445) (7,763) (285) (450) (88) --
------- ------- -------- ------- ------- ------- -------- --------
Increase (decrease) in net assets from
Class A transactions 1 -- 1,129 (7,376) (58) (208) 1,284 --
------- ------- -------- ------- ------- ------- -------- --------
Increase (decrease) in net assets derived
from capital share transactions (5,590) 35,882 106,639 (1,762) 2,932 1,659 11,853 165,541
------- ------- -------- ------- ------- ------- -------- --------
Net increase (decrease) in net assets (5,937) 36,070 105,814 (655) 2,551 2,054 4,063 172,438
------- ------- -------- ------- ------- ------- -------- --------
NET ASSETS:
Beginning of period 36,070 -- 57,089 57,744 12,679 10,625 195,815 23,377
------- ------- -------- ------- ------- ------- -------- --------
End of period $30,133 $36,070 $162,903 $57,089 $15,230 $12,679 $199,878 $195,815
======= ======= ======== ======= ======= ======= ======== ========
</TABLE>
<TABLE>
<CAPTION>
----------------- ----------------- ----------------- ------------------
INTERMEDIATE PENNSYLVANIA NEW JERSEY
GLOBAL MUNICIPAL MUNICIPAL MUNICIPAL
BOND FUND BOND FUND BOND FUND BOND FUND
----------------- ----------------- ----------------- ------------------
1996 1995 1996 1995 1996 1995 1996 1995
------- ------- ------- ------- ------ ------ ------- ------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
OPERATIONS:
Net investment income $ 1,851 $ 1,772 $ 46 $ 69 $ 234 $ 115 $ 77 $ 84
Net realized gain (loss) from security
transactions and foreign
currency transactions 1,197 (180) -- (57) (30) (12) 16 4
Net unrealized appreciation (depreciation)
on investments,
forward foreign currency contracts and
translation of
assets and liabilites in foreign
currencies (638) 847 13 70 36 64 (8) 40
------- ------- ------- ------- ------ ------ ------- ------
Net increase (decrease) in net assets
resulting from operations $ 2,410 2,439 59 82 240 167 85 128
------- ------- ------- ------- ------ ------ ------- ------
DIVIDENDS DISTRIBUTED FROM:
Net investment income:
Prior Class (a) -- -- -- -- -- -- -- --
Retail Class (b) -- -- -- -- -- -- -- --
Institutional Class (b) -- -- -- -- -- -- -- --
Class Y (c) (2,254) (845) (10) (27) (212) (105) (72) (84)
Class A (c) (11) (5) (35) (42) (21) (10) (5) --
Net realized gains:
Prior Class (a) -- -- -- -- -- -- -- --
Retail Class (b) -- -- -- -- -- -- -- --
Institutional Class (b) -- -- -- -- -- -- -- --
Class Y (c) -- -- -- -- -- -- (9) --
Class A (c) -- -- -- -- -- -- (1) --
------- ------- ------- ------- ------ ------ ------- ------
Total dividends distributed (2,265) (850) (45) (69) (233) (115) (87) (84)
------- ------- ------- ------- ------ ------ ------- ------
CAPITAL TRANSACTIONS (2):
Prior Class (a):
Redesignated to Retail Class (b) -- -- -- -- -- -- -- --
Redesignated to Institutional Class (b) -- -- -- -- -- -- -- --
Proceeds from shares issued -- -- -- -- -- -- -- --
Reinvestment of cash distributions -- -- -- -- -- -- -- --
Cost of shares redeemed -- -- -- -- -- -- -- --
------- ------- ------- ------- ------ ------ ------- ------
Increase (decrease) in net assets from
Prior Class transactions -- -- -- -- -- -- -- --
------- ------- ------- ------- ------ ------ ------- ------
Retail Class (b):
Redesignated from Prior Class (a) -- -- -- -- -- -- -- --
Exchanged for Class A Shares -- -- -- -- -- -- -- --
Proceeds from shares issued -- -- -- -- -- -- -- --
Reinvestment of cash distributions -- -- -- -- -- -- -- --
Cost of shares redeemed -- -- -- -- -- -- -- --
------- ------- ------- ------- ------ ------ ------- ------
Increase (decrease) in net assets from
Retail Class transactions -- -- -- -- -- -- -- --
------- ------- ------- ------- ------ ------ ------- ------
Institutional Class (b):
Redesignated from Prior Class (a) -- -- -- -- -- -- -- --
Exchanged for Class Y Shares -- -- -- -- -- -- -- --
Proceeds from shares issued -- -- -- -- -- -- -- --
Reinvestment of cash distributions -- -- -- -- -- -- -- --
Cost of shares redeemed -- -- -- -- -- -- -- --
------- ------- ------- ------- ------ ------ ------- ------
Increase (decrease) in net assets from
Institutional Class transactions -- -- -- -- -- -- -- --
------- ------- ------- ------- ------ ------ ------- ------
Class Y (c):
Proceeds from shares issued in merger (d) -- -- -- -- 5,703 -- -- --
Proceeds from shares issued 5,150 327 193 -- 1,175 1,718 438 520
Reinvestment of cash distributions 1,604 564 8 10 134 73 39 54
Cost of shares redeemed (797) (529) (167) (732) (397) -- (625) (499)
------- ------- ------- ------- ------ ------ ------- ------
Increase in net assets from Class Y
transactions 5,957 362 34 (722) 6,615 1,791 (148) 75
------- ------- ------- ------- ------ ------ ------- ------
Class A (c):
Proceeds from shares issued in merger (d) -- -- -- -- 684 -- -- --
Proceeds from shares issued 2 76 126 76 124 154 196 21
Reinvestment of cash distributions 10 4 31 33 17 9 4 --
Cost of shares redeemed (32) (87) (179) (407) (153) (14) (3) --
------- ------- ------- ------- ------ ------ ------- ------
Increase (decrease) in net assets from
Class A transactions (20) (7) (22) (298) 672 149 197 21
------- ------- ------- ------- ------ ------ ------- ------
Increase (decrease) in net assets derived
from capital share transactions 5,937 355 13 (1,020) 7,287 1,940 49 96
------- ------- ------- ------- ------ ------ ------- ------
Net increase (decrease) in net assets 6,082 1,944 26 (1,007) 7,294 1,992 47 140
------- ------- ------- ------- ------ ------ ------- ------
NET ASSETS:
Beginning of period 27,068 25,124 1,392 2,399 2,589 597 1,574 1,434
------- ------- ------- ------- ------ ------ ------- ------
End of period $33,150 $27,068 $ 1,418 $ 1,392 $9,883 $2,589 $ 1,621 $1,574
======= ======= ======= ======= ====== ====== ======= ======
<FN>
AMOUNTS DESIGNATED AS "--" ARE EITHER $0 OR HAVE BEEN ROUNDED TO $0.
(1) FIGURES REPRESENT ACTIVITY FOR THE PERIOD NOVEMBER 1 1995 THROUGH JUNE 30, 1996.
(2) FOR CAPITAL SHARE TRANSACTIONS PLEASE SEE FOOTNOTE 8 IN THE NOTES TO THE FINANCIAL STATEMENTS.
(3) 1995 AMOUNTS FOR THE SHORT TERM INCOME AND BOND FUND ARE FOR THE PERIODS MAY 15 THROUGH
OCTOBER 31, 1995 AND NOVEMBER 1, 1994 THROUGH OCTOBER 31, 1995, RESPECTIVELY.
(A) ON FEBRUARY 21, 1995 THE SHARES OF THE BOND FUND WAS REDESIGNATED FROM A
SINGLE CLASS TO RETAIL AND INSTITUTIONAL CLASSES.
(B) RETAIL AND INSTITUTIONAL CLASS AMOUNTS REPRESENT ACTIVITY OF THE ACQUIRED CONESTOGA
FUND FROM NOVEMBER 1, 1995 THROUGH APRIL 21, 1996.
(C) ON APRIL 22, 1996 SERIES A SHARES WERE REDESIGNATED CLASS Y SHARES, AND SERIES B
SHARES WERE REDESIGNATED CLASS A SHARES.
(D) ON APRIL 15 & 22, THE CONESTOGA FUNDS WERE ACQUIRED BY COREFUNDS, INC.
PLEASE SEE THE NOTES TO THE FINANCIAL STATEMENTS FOR FUTHER INFORMATION
REGARDING THE TRANSACTION.
</FN>
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
80 & 81
<PAGE>
FINANCIAL
HIGHLIGHTS
FOR THE PERIODS
ENDED
JUNE 30
For a Share Outstanding Throughout the Period
<TABLE>
<CAPTION>
NET REALIZED AND NET RATIO
ASSET UNREALIZED DISTRIBUTIONS DISTRIBUTIONS NET ASSETS RATIO OF NET
VALUE NET GAINS FROM NET FROM ASSET VALUE END OF EXPENSES INCOME
BEGINNING INVESTMENT OR (LOSSES) INVESTMENT CAPITAL END TOTAL OF PERIOD TO AVERAGE TO AVERAGE
OF PERIOD INCOME ON SECURITIES INCOME GAINS OF PERIOD RETURN10 (000) NET ASSETS NET ASSETS
--------- ---------- ------------- ------------- ------------- ----------- -------- --------- ----------- ----------
- ------------------------
SHORT TERM INCOME FUND11
- ------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
CLASS Y*
1996 $10.05 $0.36 $(0.08) $(0.38) $(0.01) $ 9.94 2.78% $30,132 0.51% 5.31%
INSTITUTIONAL CLASS*
19951 $10.00 $0.25 $0.03 $(0.23) $ -- $10.05 2.57%+ $36,059 0.63% 5.43%
CLASS A*
1996 $10.04 $0.35 $(0.10) $(0.35) $(0.01) $ 9.93 2.55% $ 1 0.76% 5.05%
RETAIL CLASS*
19952 $10.01 $0.23 $0.02 $(0.22) $ -- $10.04 2.87%+ $ 11 0.88% 5.05%
- ----------------------------
SHORT-INTERMEDIATE BOND FUND
- ----------------------------
CLASS Y**
1996 $ 9.84 $0.57 $(0.08) $(0.57) $ -- $ 9.76 5.05% $159,841 0.55% 5.80%
1995 9.63 0.53 0.21 (0.53) -- 9.84 8.22 55,128 0.60 5.76
1994 10.18 0.43 (0.53) (0.43) (0.02) 9.63 (0.32) 48,379 0.58 4.30
1993 10.01 0.47 0.31 (0.47) (0.14) 10.18 7.90 44,692 0.42 4.62
19923 10.00 0.23 0.01 (0.23) -- 10.01 2.49+ 22,623 0.11 5.73
CLASS A**
1996 $ 9.84 $0.54 $(0.08) $(0.54) $ -- $ 9.76 4.79% $ 3,062 0.81% 5.51%
1995 9.63 0.54 0.20 (0.53) -- 9.84 7.95 1,961 0.85 5.27
1994 10.18 0.41 (0.53) (0.41) (0.02) 9.63 (0.56) 9,365 0.83 4.05
19934 10.01 0.20 0.17 (0.20) -- 10.18 3.95+ 5,752 0.75 3.78
- ----------------------
GOVERNMENT INCOME FUND
- ----------------------
CLASS Y**
1996 $ 9.83 $0.61 $(0.21) $(0.61) $ -- $ 9.62 4.09% $13,943 0.64% 6.17%
1995 9.52 0.62 0.31 (0.62) -- 9.83 10.26 11,305 0.59 6.53
1994 10.18 0.50 (0.62) (0.50) (0.04) 9.52 (1.34) 9,089 0.50 4.93
19935 10.00 0.13 0.18 (0.13) -- 10.18 3.12+ 6,323 0.44 5.41
CLASS A**
1996 $ 9.84 $0.58 $(0.22) $(0.58) $ -- $ 9.62 3.73% $ 1,287 0.88% 5.93%
1995 9.51 0.61 0.33 (0.61) -- 9.84 10.23 1,374 0.85 6.25
1994 10.17 0.47 (0.62) (0.47) (0.04) 9.51 (1.57) 1,536 0.75 4.68
19934 10.00 0.07 0.17 (0.07) -- 10.17 1.71+ 201 0.63 5.35
- -----------
BOND FUND11
- -----------
CLASS Y*
1996 $10.55 $0.43 $(0.30) $(0.45) $(0.08) $10.15 1.23% $198,605 0.55% 6.28%
INSTITUTIONAL CLASS*
1995 $ 9.81 $0.61 $ 0.71 $(0.58) $ -- $10.55 13.87% $194,442 0.71% 6.09%
CLASS A*
1996 $10.56 $0.44 $(0.33) $(0.44) $(0.08) $10.15 0.98% $ 1,273 0.80% 6.02%
RETAIL CLASS*
1995 $ 9.81 $0.60 $ 0.72 $(0.57) $ -- $10.56 13.83% $ 1,373 0.97% 6.02%
PRIOR CLASS
1994 $11.18 $0.53 $(1.04) $(0.52) $(0.34) $ 9.81 (4.75)% $ 23,377 1.01% 5.07%
1993 10.89 0.56 0.54 (0.56) (0.25) 11.18 10.63 27,346 0.88 5.16
1992 10.65 0.70 0.32 (0.68) (0.10) 10.89 9.82 15,180 0.46 6.78
1991 9.96 0.78 0.69 (0.78) -- 10.65 15.16 7,255 0.47 7.71
19906 10.00 0.50 (0.04) (0.50) -- 9.96 4.64+ 4,593 0.68 7.75
</TABLE>
<TABLE>
<CAPTION>
RATIO RATIO OF
OF EXPENSES NET INCOME
TO AVERAGE TO AVERAGE
NET ASSETS NET ASSETS PORTFOLIO
(EXCLUDING (EXCLUDING TURNOVER
WAIVERS) WAIVERS) RATE***
----------- ----------- ---------
- ------------------------
SHORT TERM INCOME FUND11
- ------------------------
<S> <C> <C> <C>
CLASS Y*
1996 1.03% 4.79% 102%
INSTITUTIONAL CLASS*
19951 1.08% 4.98% 40%
CLASS A*
1996 1.25% 4.56% 102%
RETAIL CLASS*
19952 1.33% 4.60% 40%
- ----------------------------
SHORT-INTERMEDIATE BOND FUND
- ----------------------------
CLASS Y**
1996 0.81% 5.54% 257%
1995 0.84 5.52 405
1994 0.86 4.02 299
1993 0.86 4.18 188
19923 0.84 5.00 51
CLASS A**
1996 1.06% 5.27% 257%
1995 1.09 5.03 405
1994 1.11 3.77 299
19934 1.19 3.34 188
- ----------------------
GOVERNMENT INCOME FUND
- ----------------------
CLASS Y**
1996 0.89% 5.92% 131%
1995 0.98 6.14 368
1994 1.00 4.43 157
19935 1.10 4.75 93
CLASS A**
1996 1.14% 5.67% 131%
1995 1.24 5.86 368
1994 1.25 4.18 157
19934 1.29 4.69 93
- -----------
BOND FUND11
- -----------
CLASS Y*
1996 0.97% 5.86% 190%
INSTITUTIONAL CLASS*
1995 1.12% 5.68% 352%
CLASS A*
1996 1.22% 5.61% 190%
RETAIL CLASS*
1995 1.44% 5.55% 352%
PRIOR CLASS
1994 1.60% 4.48% 232%
1993 1.49 4.55 158
1992 1.24 6.01 99
1991 1.41 6.78 47
19906 1.62 6.81 23
</TABLE>
82
<PAGE>
[] COREFUND FIXED INCOME FUNDS
For a Share Outstanding Throughout the Period
<TABLE>
<CAPTION>
NET REALIZED AND NET RATIO
ASSET UNREALIZED DISTRIBUTIONS DISTRIBUTIONS NET ASSETS RATIO OF NET
VALUE NET GAINS FROM NET FROM ASSET VALUE END OF EXPENSES INCOME
BEGINNING INVESTMENT OR (LOSSES) INVESTMENT CAPITAL END TOTAL OF PERIOD TO AVERAGE TO AVERAGE
OF PERIOD INCOME ON SECURITIES INCOME GAINS OF PERIOD RETURN10 (000) NET ASSETS NET ASSETS
--------- ---------- ------------- ------------- ------------- ----------- -------- --------- ----------- ----------
- ----------------
GLOBAL BOND FUND
- ----------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
CLASS Y**
1996 $ 9.62 $0.47 $ 0.30 $(0.69) $ -- $ 9.70 8.00% $ 32,998 0.71% 5.81%
1995 9.06 0.62 0.24 (0.30) -- 9.62 9.70 26,898 0.64 6.84
19947 10.00 0.25 (1.15) (0.04) -- 9.06 (9.00)+ 24,957 0.73 5.04
CLASS A**
1996 $ 9.61 $0.61 $ 0.12 $(0.66) $ -- $ 9.68 7.74% $ 152 0.96% 5.56%
1995 9.04 0.61 0.24 (0.28) -- 9.61 9.57 170 0.89 6.59
19947 10.00 0.19 (1.11) (0.04) -- 9.04 (9.22)+ 167 0.98 4.79
- --------------------------------
INTERMEDIATE MUNICIPAL BOND FUND
- --------------------------------
CLASS Y**
1996 $ 9.83 $0.37 $ 0.09 $(0.37) $-- $ 9.92 4.74% $ 403 0.81% 3.73%
1995 9.68 0.38 0.15 (0.38) -- 9.83 5.58 365 0.82 3.91
1994 10.09 0.39 (0.41) (0.39) -- 9.68 (0.27) 1,088 0.63 3.91
19938 10.00 0.04 0.09 (0.04) -- 10.09 1.33+ 2,009 0.58 2.74
CLASS A**
1996 $ 9.83 $0.35 $ 0.09 $(0.35) $-- $ 9.92 4.48% $ 1,015 1.08% 3.47%
1995 9.67 0.35 0.16 (0.35) -- 9.83 5.42 1,027 1.08 3.65
1994 10.08 0.37 (0.41) (0.37) -- 9.67 (0.52) 1,311 0.88 3.66
19934 10.00 0.03 0.08 (0.03) -- 10.08 1.19+ 166 0.81 2.51
- --------------------------------
PENNSYLVANIA MUNICIPAL BOND FUND
- --------------------------------
CLASS Y**
1996 $10.16 $0.55 $ 0.06 $(0.55) $ -- $10.22 6.02% $ 8,864 0.21% 5.25%
1995 9.95 0.51 0.21 (0.51) -- 10.16 7.50 2,272 0.39 5.26
19949 10.00 0.06 (0.05) (0.06) -- 9.95 0.14+ 434 0.42 5.09
CLASS A**
1996 $10.16 $0.52 $ 0.06 $(0.52) $ -- $10.22 5.76%$ 994 0.46% 4.93%
1995 9.95 0.49 0.21 (0.49) -- 10.16 7.25 317 0.64 4.95
19949 10.00 0.06 (0.05) (0.06) -- 9.95 0.09+ 163 0.67 4.84
- ------------------------------
NEW JERSEY MUNICIPAL BOND FUND
- ------------------------------
CLASS Y**
1996 $10.12 $0.51 $(0.02) $(0.51) $ (0.06) $10.08 5.28% $ 1,317 0.37% 4.93%
1995 9.94 0.52 0.18 (0.52) -- 10.12 7.25 1,550 0.42 5.21
19949 10.00 0.06 (0.06) (0.06) -- 9.94 0.01+ 1,432 0.43 5.07
CLASS A**
1996 $10.12 $0.48 $(0.01) $(0.48) $ (0.06) $10.07 4.93% $ 304 0.60% 4.65%
1995 9.95 0.49 0.17 (0.49) -- 10.12 6.84 24 0.68 4.97
19949 10.00 0.06 (0.05) (0.06) -- 9.95 0.08+ 2 0.68 4.82
</TABLE>
<TABLE>
<CAPTION>
RATIO RATIO OF
OF EXPENSES NET INCOME
TO AVERAGE TO AVERAGE
NET ASSETS NET ASSETS PORTFOLIO
(EXCLUDING (EXCLUDING TURNOVER
WAIVERS) WAIVERS) RATE***
----------- ----------- ---------
- ----------------
GLOBAL BOND FUND
- ----------------
<S> <C> <C> <C>
CLASS Y**
1996 0.95% 5.57% 67%
1995 1.03 6.45 133
19947 1.12 4.65 161
CLASS A**
1996 1.20% 5.32% 67%
1995 1.28 6.20 133
19947 1.37 4.40 161
- --------------------------------
INTERMEDIATE MUNICIPAL BOND FUND
- --------------------------------
CLASS Y**
1996 1.31% 3.23% 10%
1995 1.26 3.47 9
1994 1.17 3.37 43
19938 1.45 1.87 10
CLASS A**
1996 1.61% 2.94% 10%
1995 1.52 3.21 9
1994 1.42 3.12 43
19934 1.68 1.64 10
- --------------------------------
PENNSYLVANIA MUNICIPAL BOND FUND
- --------------------------------
CLASS Y**
1996 0.96% 4.50% 92%
1995 1.14 4.51 18%
19949 1.17 4.34 3
CLASS A**
1996 1.21% 4.18% 92%
1995 1.39 4.20 18
19949 1.42 4.09 3
- ------------------------------
NEW JERSEY MUNICIPAL BOND FUND
- ------------------------------
CLASS Y**
1996 1.12% 4.18% 21%
1995 1.17 4.46 32
19949 1.35 4.15 13
CLASS A**
1996 1.35% 3.90% 21%
1995 1.44 4.21 32
19949 1.60 3.90 13
<FN>
* ON FEBRUARY 21, 1995 THE SHARES OF THE FUNDS WERE REDESIGNATED AS EITHER
RETAIL OR INSTITUTIONAL SHARES. FOR THE YEAR ENDED OCTOBER 31, 1995, THE
FINANCIAL HIGHLIGHTS' RATIOS OF EXPENSES, 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. ADDITIONALLY, ON APRIL 22,
1996 THE CONESTOGA SHORT-TERM INCOME AND BOND FUNDS WERE ACQUIRED BY
COREFUNDS, INC. AT WHICH TIME THE INSTITUTIONAL CLASS OF SHARES OF THESE
FUNDS WERE REDESIGNATED CLASS Y AND THE RETAIL CLASS OF THESE FUNDS WERE
REDESIGNATED CLASS A.
** ON APRIL 22, 1996 THE SERIES A SHARES OF EACH FUND, EXCLUDING THE SHORT TERM
INCOME AND BOND FUNDS, WERE REDESIGNATED CLASS Y AND THE SERIES B SHARES OF
EACH FUND, EXCLUDING THE SHORT TERM INCOME AND BOND FUNDS, WERE REDESIGNATED
CLASS A.
*** FOR 1996 TRANSACTIONS RELATING TO THE MERGER WERE EXCLUDED FROM THE CALCULATION
OF THE PORTFOLIO TURNOVER RATE.
+ THIS FIGURE HAS NOT BEEN ANNULAIZED.
1 COMMENCED OPERATIONS MAY 15, 1995. UNLESS OTHERWISE NOTED, ALL RATIOS FOR THE
PERIOD HAVE BEEN ANNUALIZED.
2 COMMENCED OPERATIONS MAY 17, 1995. UNLESS OTHERWISE NOTED, ALL RATIOS FOR
THE PERIOD HAVE BEEN ANNUALIZED.
3 COMMENCED OPERATIONS FEBRUARY 3, 1992. UNLESS OTHERWISE NOTED, ALL RATIOS FOR
THE PERIOD HAVE BEEN ANNUALIZED.
4 COMMENCED OPERATIONS JANUARY 4, 1993. UNLESS OTHERWISE NOTED, ALL RATIOS FOR
THE PERIOD HAVE BEEN ANNUALIZED.
5 COMMENCED OPERATIONS APRIL 1, 1993. UNLESS OTHERWISE NOTED, ALL RATIOS FOR
THE PERIOD HAVE BEEN ANNUALIZED.
6 COMMENCED OPERATIONS FEBRUARY 28, 1990. UNLESS OTHERWISE NOTED, ALL RATIOS FOR
THE PERIOD HAVE BEEN ANNUALIZED.
7 COMMENCED OPERATIONS DECEMBER 15, 1993. UNLESS OTHERWISE NOTED, ALL RATIOS FOR
THE PERIOD HAVE BEEN ANNUALIZED.
8 COMMENCED OPERATIONS MAY 3, 1993. UNLESS OTHERWISE NOTED, ALL RATIOS FOR THE
PERIOD HAVE BEEN ANNUALIZED.
9 COMMENCED OPERATIONS MAY 16, 1994. UNLESS OTHERWISE NOTED, ALL RATIOS FOR THE
PERIOD HAVE BEEN ANNUALIZED.
10 TOTAL RETURN DOES NOT REFLECT THE SALES LOAD CHARGED ON THE CLASS A SHARES.
ADDITIONALLY, TOTAL RETURN FOR CLASS Y & CLASS A FOR THE SHORT TERM INCOME
AND BOND FUNDS FOR 1996 ARE FOR THE EIGHT MONTH PERIOD ENDED JUNE 30, 1996.
11 THE PER SHARE AMOUNT FOR THESE FUNDS FOR 1996 REPRESENTS THE PERIOD FROM
NOVEMBER 1, 1995 TO JUNE 30, 1996. ALL PRIOR YEARS ARE FOR THE PERIODS
NOVEMBER 1 TO OCTOBER 31.
</FN>
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
83
<PAGE>
STATEMENT
OF
NET ASSETS
AS OF
JUNE 30, 1996
TREASURY RESERVE
[GRAPHIC OMITTED]
Pie Chart -- Shown is a pie chart depicting the industry classification for the
Treasury Reserve. The following represent the plot points for the chart:
Industry Classification % of Total Portfolio Investments
Cash Equivalents 61
US Treasury Securities 39
- -------------------------------------------------------
DESCRIPTION PAR (000) VALUE (000)
- -------------------------------------------------------
U.S. TREASURY OBLIGATIONS -- 39.3%
U.S. Treasury Bills+
5.170%, 07/25/96 $10,000 $ 9,966
5.340%, 07/25/96 5,000 4,983
5.850%, 07/25/96 5,000 4,982
5.120%, 08/01/96 5,000 4,978
4.980%, 08/15/96 5,000 4,970
5.080%, 08/22/96 15,500 15,388
5.120%, 09/19/96 15,000 14,832
5.130%, 09/26/96 10,000 9,879
5.140%, 09/26/96 10,000 9,879
5.260%, 10/03/96 15,000 14,799
5.150%, 10/10/96 20,000 19,718
4.980%, 10/17/96 10,000 9,855
5.060%, 10/17/96 10,000 9,853
5.170%, 10/24/96 20,000 19,678
5.230%, 10/31/96 10,000 9,827
5.220%, 11/07/96 15,000 14,726
5.370%, 11/14/96 10,000 9,802
5.230%, 11/21/96 10,000 9,798
5.300%, 11/29/96 10,000 9,784
5.460%, 12/05/96 10,000 9,768
5.310%, 12/12/96 15,000 14,651
5.380%, 12/19/96 10,000 9,751
5.360%, 12/26/96 10,000 9,742
5.290%, 01/09/97 5,000 4,865
5.410%, 01/09/97 10,000 9,723
5.340%, 02/06/97 5,000 4,844
5.340%, 02/06/97 10,000 9,687
5.400%, 03/06/97 6,000 5,788
5.460%, 04/03/97 10,000 9,603
5.650%, 04/03/97 5,000 4,795
5.650%, 05/01/97 5,000 4,774
5.740%, 05/29/97 4,000 3,800
- -------------------------------------------------------
DESCRIPTION PAR (000) VALUE (000)
- -------------------------------------------------------
U.S. Treasury STRIPS+
5.230%, 08/15/96 $ 10,000 $ 9,936
5.300%, 11/15/96 15,000 14,706
5.580%, 02/15/97 10,000 9,654
5.640%, 05/15/97 15,000 14,293
---------
TOTAL U.S. TREASURY OBLIGATIONS
(Cost $358,077) 358,077
---------
REPURCHASE AGREEMENTS -- 61.1%
Aubrey Lanston
5.40%, dated 06/28/96,
matures 07/01/96, repurchase
price $180,081,000
(collateralized by various
U.S. Treasury Notes ranging
in par value $37,255,000-
$50,000,000, 5.375%-7.875%,
06/30/97-01/15/98; total
market value $183,951,990) 180,000 180,000
First National Bank of Chicago
5.40%, dated 06/28/96,
matures 07/01/96, repurchase
price $40,018,000
(collateralized by various
U.S. Treasury Notes ranging
in par value $4,320,000-
$25,000,000, 6.50%-7.125%,
09/30/96-10/15/18; total
market value $40,820,393) 40,000 40,000
Goldman Sachs
5.42%, dated 06/28/96,
matures 07/01/96, repurchase
price $40,018,067
(collaterlized by U.S. Treasury
Note par value $32,615,000,
10.75%, 02/15/03; market
value $41,096,300) 40,000 40,000
Hong Kong Shanghai Bank
5.42%, dated 06/28/96, matures
07/01/96, repurchase price
$30,013,550 (collateralized by
U.S. Treasury Note par value
$30,200,000, 5.25%, 12/31/97;
market value $30,663,889) 30,000 30,000
Hong Kong Shanghai Bank 5.25%,
dated 06/28/96, matures
07/01/96, repurchase price
$12,683,547 (collateralized
by U.S. Treasury Note par value
$12,990,000, 6.25%, 04/30/01;
market value $13,000,413) 12,678 12,678
Morgan Stanley
5.30%, dated 06/28/96, matures
07/01/96, repurchase price
$35,015,458 (collateralized
by various U.S. Treasury Notes
ranging in par value
$3,970,000-$25,390,000,
125%-9.25%, 08/15/98-
07/31/00; total market
value $35,711,078) 35,000 35,000
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
84
<PAGE>
[] COREFUND MONEY MARKET FUNDS
- -------------------------------------------------------
DESCRIPTION PAR (000) VALUE (000)
- -------------------------------------------------------
Sanwa Bank
5.40%, dated 06/28/96,
matures 07/01/96, repurchase
price $180,081,000
(collateralized by various
U.S. Treasury Notes ranging
in par value $11,025,000-
$50,000,000, 5.125%-7.25%,
09/30/96-03/31/98; total
market value $183,622,629) $180,000 $180,000
Swiss Bank
5.45%, dated 06/28/96, matures
07/01/96, repurchase price
$40,018,167 (collateralized
by U.S. Treasury Note par
value $40,295,000, 6.50%,
05/15/97; market value
$40,872,598) 40,000 40,000
---------
TOTAL REPURCHASE AGREEMENTS
(Cost $557,678) 557,678
---------
TOTAL INVESTMENTS -- 100.4%
(Cost $915,755) 915,755
---------
OTHER ASSETS AND LIABILITIES,
NET -- (0.4%) (3,807)
---------
- -------------------------------------------------------
DESCRIPTION VALUE (000)
- -------------------------------------------------------
NET ASSETS:
Portfolio Shares - Class Y ($0.001 par value -
250 million authorized) based on
892,564,972 outstanding shares $ 892,565
Portfolio Shares - Class C ($0.001 par value -
250 million authorized) based on
19,385,228 outstanding shares 19,385
Accumulated Net Realized Loss on
Investments (2)
---------
TOTAL NET ASSETS -- 100.0% $911,948
=========
NET ASSET VALUE & REDEMPTION PRICE
PER SHARE
CLASS Y $1.00
=========
CLASS C $1.00
=========
+ YIELD TO MATURITY
STRIPS -- SEPARATELY TRADED REGISTERED INTEREST AND PRINCIPAL SECURITIES
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
85
<PAGE>
STATEMENT
OF
NET ASSETS
AS OF
JUNE 30, 1996
CASH RESERVE
[GRAPHIC OMITTED]
Pie Chart -- Shown is a pie chart depicting the industry classification for the
Cash Reserve. The following represent the plot points for the chart:
Industry Classification % of Total Portfolio Investment
Cash Equivalents 6
US Treasury Securities 11
Time Deposits 2
Corporate Securities 81
- -------------------------------------------------------
DESCRIPTION PAR (000) VALUE (000)
- -------------------------------------------------------
COMMERCIAL PAPER -- 70.3%
Alcatel-Alsthom
5.190%, 07/05/96 $15,000 $ 14,991
American Express Credit
5.290%, 08/14/96 10,000 9,935
5.290%, 08/16/96 10,000 9,932
Ameritech Capital
5.280%, 07/16/96 10,000 9,978
5.280%, 11/15/96 10,000 9,799
Arco Coal Australia
5.300%, 07/10/96 10,000 9,987
Asset Securitization
5.280%, 07/19/96 10,000 9,974
5.280%, 07/23/96 10,000 9,968
AT&T
5.240%, 08/13/96 10,000 9,937
5.280%, 08/20/96 10,000 9,927
5.270%, 08/20/96 10,000 9,927
Banc One Funding
5.330%, 07/31/96 10,000 9,956
5.390%, 08/16/96 10,000 9,931
Caisse Des Depots
En Consignations
5.290%, 07/09/96 15,000 14,982
5.240%, 08/22/96 10,000 9,924
5.300%, 09/05/96 10,000 9,903
Campbell
4.980%, 10/04/96 5,000 4,934
Coca Cola
5.260%, 07/19/96 10,000 9,974
5.270%, 08/08/96 10,000 9,944
5.320%, 08/26/96 10,000 9,917
E.I. duPont de Nemours
5.270%, 07/18/96 10,000 9,975
5.270%, 07/26/96 10,000 9,963
Ford Motor Credit
5.250%, 07/22/96 10,000 9,969
5.300%, 09/16/96 10,000 9,887
- -------------------------------------------------------
DESCRIPTION PAR (000) VALUE (000)
- -------------------------------------------------------
General Electric Capital
5.250%, 07/10/96 $ 5,000 $ 4,994
5.290%, 08/12/96 10,000 9,938
5.290%, 08/15/96 10,000 9,934
Goldman Sachs
5.330%, 09/19/96 10,000 9,882
Merrill Lynch
5.310%, 08/07/96 10,000 9,946
5.300%, 08/12/96 10,000 9,938
5.270%, 08/14/96 5,000 4,968
5.380%, 08/29/96 10,000 9,912
Metropolitan Life Funding
5.260%, 08/23/96 10,000 9,923
Mitsubishi International
5.350%, 08/30/96 20,000 19,822
Mobile Australia Finance
5.320%, 08/16/96 10,000 9,932
Motorola Credit
5.250%, 07/16/96 10,000 9,978
National Rural Utility
5.270%, 07/29/96 15,000 14,939
New Center Asset Trust
5.600%, 07/01/96 31,000 31,000
Norwest Financial
5.280%, 08/09/96 10,000 9,943
Pitney Bowes
5.270%, 07/23/96 3,000 2,990
Proctor and Gamble
5.250%, 07/08/96 10,000 9,990
5.360%, 09/20/96 10,000 9,879
Province of Quebec
5.420%, 09/16/96 10,000 9,884
Royal Bank of Canada
5.100%, 07/05/96 5,000 4,997
Southwestern Bell Capital
5.260%, 07/22/96 10,000 9,969
5.290%, 07/25/96 3,462 3,450
Swedish Export Credit
5.380%, 12/03/96 5,000 4,884
Toyota Motor Credit
5.280%, 09/03/96 20,000 19,812
5.360%, 09/18/96 10,000 9,882
Toys R Us
5.300%, 07/31/96 10,600 10,589
Walt Disney
5.180%, 07/15/96 10,000 9,980
5.210%, 02/03/97 10,000 9,686
Weyerhauser
5.290%, 07/25/96 15,000 14,947
5.270%, 08/06/96 10,000 9,947
5.300%, 08/22/96 10,000 9,924
---------
TOTAL COMMERCIAL PAPER
(Cost $569,473) 569,473
---------
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
86
<PAGE>
[] COREFUND MONEY MARKET FUNDS
- -------------------------------------------------------
DESCRIPTION PAR (000) VALUE (000)
- -------------------------------------------------------
U.S. GOVERNMENT AGENCY OBLIGATIONS -- 10.7%
FHLB
5.100%, 09/06/96 $10,000 $ 9,905
5.180%, 10/16/96 17,500 17,231
FNMA
4.850%, 07/24/96 20,000 19,938
4.820%, 08/09/96 20,000 19,896
5.310%, 12/11/96 10,000 9,994
4.780%, 02/14/97 10,000 9,992
---------
TOTAL U.S. GOVERNMENT AGENCY OBLIGATIONS
(Cost $86,956) 86,956
---------
CORPORATE OBLIGATIONS -- 3.3%
American Express Centurion
Bank (A)
5.423%, 07/10/96 12,000 12,000
General Electric Capital (A)
5.170%, 01/21/97 14,500 14,497
---------
TOTAL CORPORATE OBLIGATIONS
(Cost $26,497) 26,497
---------
CERTIFICATES OF DEPOSIT -- 3.0%
Bayerische Vereinsbank
5.010%, 08/05/96 10,000 10,000
Deutsche Bank
5.060%, 08/05/96 10,000 10,001
Society Generale
5.400%, 07/09/96 4,000 4,000
---------
TOTAL CERTIFICATES OF DEPOSIT
(Cost $24,001) 24,001
---------
TIME DEPOSIT -- 2.5%
First Union Bank
5.500%, 07/01/96 20,000 20,000
---------
TOTAL TIME DEPOSIT
(Cost $20,000) 20,000
---------
MASTER NOTES -- 1.5%
Associates Corporation of
North America (A)
5.286%, 07/01/96 11,366 11,366
SLMA (A)
5.290%, 07/01/96 762 762
---------
TOTAL MASTER NOTES
(Cost $12,128) 12,128
---------
- -------------------------------------------------------
DESCRIPTION PAR (000) VALUE (000)
- -------------------------------------------------------
BANK NOTES -- 1.1%
FCC National Bank
5.900%, 08/21/96 $ 5,000 $ 4,999
5.650%, 11/01/96 4,000 3,999
---------
TOTAL BANK NOTES
(Cost $8,998) 8,998
---------
U.S. TREASURY OBLIGATIONS -- 3.6%
U.S. Treasury Bills+
5.850%, 07/25/96 5,000 4,982
5.360%, 03/06/97 20,000 19,299
U.S. Treasury STRIPS+
5.520%, 02/15/97 5,000 4,832
---------
TOTAL U.S. TREASURY OBLIGATIONS
(Cost $29,113) 29,113
---------
REPURCHASE AGREEMENT -- 4.3%
Hong Kong Shanghai Bank
5.25%, dated 06/28/96, matures
07/01/96, repurchase price
$35,015,313 (collateralized by
U.S. Treasury Note, par value
$35,865,000, 6.25%, 04/30/01;
market value $35,893,750) 35,000 35,000
---------
TOTAL REPURCHASE AGREEMENT
(Cost $35,000) 35,000
---------
TOTAL INVESTMENTS -- 100.3%
(Cost $812,166) 812,166
---------
OTHER ASSETS AND LIABILITIES,
NET -- (0.3%) (2,218)
---------
NET ASSETS:
Portfolio Shares - Class Y ($0.001 par
value - 1 billion authorized) based
on 790,350,082 outstanding shares 790,350
Portfolio Shares - Class C ($0.001 par
value - 1 billion authorized) based
on 19,739,821 outstanding shares 19,740
Accumulated Net Realized Loss on
Investments (142)
---------
TOTAL NET ASSETS -- 100.0% $809,948
=========
NET ASSET VALUE & REDEMPTION PRICE
PER SHARE
CLASS Y $1.00
=========
CLASS C $1.00
=========
+ YIELD TO MATURITY
(A) VARIABLE RATE SECURITIES - THE RATE REFLECTED ON THE STATEMENT OF NET ASSETS
IS THE RATE IN EFFECT ON JUNE 30, 1996.
FHLB -- FEDERAL HOME LOAN BANK
FNMA -- FEDERAL NATIONAL MORTGAGE ASSOCIATION
SLMA -- STUDENT LOAN MARKETING ASSOCIATION
STRIPS -- SEPARATELY TRADED REGISTERED INTEREST AND PRINCIPAL OF SECURITIES
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
87
<PAGE>
STATEMENT
OF
NET ASSETS
AS OF
JUNE 30, 1996
TAX-FREE RESERVE
[GRAPHIC OMITTED]
Pie Chart -- Shown is a pie chart depicting the industry classification for the
Tax-Free Reserve. The following represent the plot points for the chart:
Industry Classification % of Total Portfolio Investment
Revenue Bonds 52
Tax-Exempt Commercial Paper 35
Anticipation Notes 8
General Obligations 5
- -------------------------------------------------------
DESCRIPTION PAR (000) VALUE (000)
- -------------------------------------------------------
MUNICIPAL BONDS -- 102.9%
ALABAMA -- 2.7%
Alabama State Housing Finance
Authority Revenue Bond for
Heatherbro Project (A) (B) (C)
3.550%, 07/05/96 $ 900 $ 900
Montgomery, Alabama TECP (C)
3.550%, 10/23/96 2,000 2,000
---------
2,900
---------
ALASKA -- 1.9%
Valdez, Alaska TECP (C)
3.550%, 08/16/96 2,000 2,000
---------
ARIZONA -- 0.7%
Flagstaff, Arizona TECP
3.650%, 10/22/96 750 750
---------
CALIFORNIA -- 0.3%
Santa Clara, California Electric
Revenue Bond, Series A
(A) (B) (C)
3.200%, 07/05/96 370 370
---------
DELAWARE -- 0.7%
Wilmington, Delaware Hospital
Revenue Bond for Franciscan
Health Systems Project,
Series A (A) (B) (C)
3.650%, 07/01/96 600 600
Wilmington, Delaware Hospital
Revenue Bond for Franciscan
Health Systems Project,
Series B (A) (B) (C)
3.650%, 07/01/96 100 100
---------
700
---------
- -------------------------------------------------------
DESCRIPTION PAR (000) VALUE (000)
- -------------------------------------------------------
FLORIDA -- 1.1%
Dade County, Florida Capital
Asset Revenue Bond,
Series 1990 (A) (B) (C)
3.600%, 07/05/96 $1,200 $ 1,200
---------
GEORGIA -- 3.9%
Burke County, Georgia TECP (C)
3.700%, 07/11/96 2,000 2,000
Hapeville, Georgia Industrial
Development Authority
Revenue Bond for Hapeville
Hotel Project (A) (B) (C)
3.600%, 07/01/96 2,200 2,200
---------
4,200
---------
HAWAII -- 1.4%
Honolulu County, Hawaii
TECP (C)
3.650%, 08/05/96 1,500 1,500
---------
ILLINOIS -- 5.9%
Chicago, Illinois O'Hare
International Airport Revenue
Bond for Industrial Lien,
Series C (A) (B) (C)
3.400%, 07/05/96 1,500 1,500
Illinois Development Finance
Authority Revenue Bond
3.300%, 07/05/96 1,800 1,800
Illinois State Housing and
Finance Authority Revenue
Bond for Franciscan Village
Project, Series A (A) (B) (C)
3.400%, 07/05/96 675 675
Illinois State Toll Highway
Authority Revenue Bond,
Series B (A) (B) (C)
3.300%, 07/05/96 1,000 1,000
St. Charles, Illinois Industrial
Development Authority
Revenue Bond for Pier One
Imports Project (A) (B) (C)
3.500%, 07/05/96 1,300 1,300
---------
6,275
---------
INDIANA -- 6.2%
Gary, Indiana Industrial
Development Authority
Revenue Bond for U.S. Steel
Project (A) (B) (C)
3.700%, 07/15/96 1,600 1,600
Jasper County, Indiana TECP (C)
3.650%, 07/17/96 500 500
Mt. Vernon, Indiana TECP (C)
3.600%, 08/21/96 3,900 3,900
Sullivan, Indiana TECP (C)
3.650%, 07/17/96 600 600
---------
6,600
---------
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
88
<PAGE>
[] COREFUND MONEY MARKET FUNDS
- -------------------------------------------------------
DESCRIPTION PAR (000) VALUE (000)
- -------------------------------------------------------
IOWA -- 0.4%
Des Moines, Iowa Commercial
Development Revenue Bond
for Capital Center III Project
(A) (B) (C)
3.100%, 07/05/96 $ 400 $ 400
---------
KANSAS -- 4.7%
Burlington, Kansas TECP (C)
3.700%, 08/14/96 1,450 1,450
3.700%, 09/06/96 2,000 2,000
3.600%, 10/10/96 1,500 1,500
Wichita, Kansas Health Facilities
Revenue Bond for Wichita
Health Systems Project,
Series XXV (A) (B) (C)
3.650%, 07/05/96 100 100
---------
5,050
---------
KENTUCKY -- 2.1%
Jefferson County, Kentucky
TECP (C)
3.650%, 08/08/96 2,200 2,200
---------
LOUISIANA -- 4.5%
De Soto Parish, Louisiana
Pollution Control Revenue
Bond for Central Louisiana
Electric Company Project
(A) (B) (C)
3.250%, 07/05/96 700 700
East Baton Rouge, Louisiana
Pollution Control Revenue
Bond (A) (B) (C)
3.600%, 07/01/96 400 400
Jefferson Parish, Louisiana
Industrial Development
Authority Revenue Bond for
George J. Ackel, Sr. Project
(A) (B) (C)
3.150%, 07/05/96 800 800
Louisiana State Public Facilities
Authority Revenue Bond for
Kenner Hotel Project (A) (B) (C)
3.600%, 07/01/96 400 400
Louisiana State Recovery District
Sales Tax Revenue, Series 88
(A) (B) (C)
3.650%, 07/01/96 500 500
South Louisiana Port Common
Marine Terminal Facilities
Revenue Bond for Occidental
Petroleum Project (A) (B) (C)
3.400%, 07/05/96 2,000 2,000
---------
4,800
---------
MICHIGAN -- 4.7%
Delta County, Michigan
Environmental Improvement
Revenue Bond for Mead
Escambia Paper Project, Series C
(A) (B) (C)
3.600%, 07/01/96 400 400
- -------------------------------------------------------
DESCRIPTION PAR (000) VALUE (000)
- -------------------------------------------------------
Michigan State GO (C)
4.000%, 09/30/96 $2,000 $ 2,004
Michigan State Industrial
Development Authority Revenue
Bond for Consumer Power
Project (A) (B) (C)
3.550%, 07/01/96 1,600 1,600
Michigan State Underground
Storage Tank Financial
Assurance Authority Revenue
Bond, Series I (A) (B) (C)
3.450%, 08/15/96 1,000 1,000
---------
5,004
---------
MINNESOTA -- 1.4%
Rochester, Minnesota TECP (C)
3.700%, 07/03/96 1,500 1,500
---------
MISSISSIPPI -- 2.1%
Claiborne County, Mississippi
TECP (C)
3.650%, 07/24/96 1,000 1,000
3.650%, 08/07/96 1,000 1,000
Jackson County, Mississippi Port
Facility Revenue Bond for
Chevron USA Project (A) (B) (C)
3.550%, 07/01/96 200 200
---------
2,200
---------
MISSOURI -- 5.6%
Independence Waste, Missouri
TECP (C)
3.550%, 08/23/96 1,500 1,500
Missouri State Environmental
Improvement TECP (C)
3.550%, 07/10/96 1,500 1,500
University of Missouri Capital
Project Note, Series FY
4.750%, 06/30/97 3,000 3,025
---------
6,025
---------
MONTANA -- 0.3%
Forsyth, Montana Pollution
Control Revenue Bond for
Portland General Electric
Project (A) (B) (C)
3.300%, 07/05/96 200 200
Forsyth, Montana Pollution
Control Revenue Bond for
Portland General Electric
Project, Series B (A) (B) (C)
3.300%, 07/05/96 100 100
---------
300
---------
NEVADA -- 1.4%
Nevada State Housing Facilities
Revenue Bond for Multi-Unit
Park Project, Series A (A) (B) (C)
3.500%, 07/05/96 1,500 1,500
---------
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
89
<PAGE>
STATEMENT
OF
NET ASSETS
AS OF
JUNE 30, 1996
TAX-FREE RESERVE (CONTINUED)
- -------------------------------------------------------
DESCRIPTION PAR (000) VALUE (000)
- -------------------------------------------------------
NEW HAMPSHIRE -- 1.8%
Manchester, New Hampshire GO
5.500%, 11/01/96 $1,945 $ 1,955
---------
NEW MEXICO -- 0.9%
Albuquerque, New Mexico Gross
Receipts Revenue Bond
(A) (B) (C)
3.400%, 07/05/96 1,000 1,000
---------
NEW YORK -- 0.4%
New York City, New York
Municipal Water Finance
Authority Revenue Bond,
Series C (A) (B) (C)
3.600%, 07/01/96 400 400
---------
NORTH CAROLINA -- 2.1%
North Carolina TECP (C)
3.300%, 07/15/96 1,500 1,500
Wake County, North Carolina
Industrial Development
Authority Revenue Bond for
Carolina Power & Light
Company Project, Series A
(A) (B) (C)
3.400%, 07/05/96 800 800
---------
2,300
---------
OHIO -- 2.3%
Ohio State Air Quality Revenue
Bond, Series B (A) (B)
3.750%, 07/01/96 1,300 1,300
Ohio State Water Development
Authority Revenue Bond for
Environmental Mead Company,
Series B (A) (B) (C)
3.600%, 07/01/96 1,200 1,200
---------
2,500
---------
OREGON -- 0.6%
Port of Portland, Oregon Pollution
Control Revenue Bond for
Reynold Metals Project
(A) (B) (C)
3.650%, 07/01/96 500 500
Umatilla County, Oregon
Franciscan Health System
Revenue Bond, Series A
(A) (B) (C)
3.650%, 07/01/96 100 100
---------
600
---------
PENNSYLVANIA -- 12.7%
Allegheny County, Pennsylvania
Hospital Development Revenue
Bond for Presbyterian University
Hospital Project, Series B1
(A) (B) (C)
3.550%, 07/01/96 1,800 1,800
- -------------------------------------------------------
DESCRIPTION PAR (000) VALUE (000)
- -------------------------------------------------------
Allegheny County, Pennsylvania
Hospital Development Revenue
Bond for Presbyterian University
Hospital Project, Series B2
(A) (B) (C)
3.550%, 07/01/96 $ 300 $ 300
Beaver County, Pennsylvania
Industrial Development
Authority Revenue Bond for
Duquesne Light Company
Project, Series B (A) (B) (C)
3.250%, 07/05/96 100 100
Langhorne, Pennsylvania Hospital
Authority Revenue Bond for
St. Mary's Hospital, Series A
(A) (B) (C)
3.600%, 07/01/96 200 200
Lehigh County, Pennsylvania
Industrial Development
Authority Revenue Bond for
Allegheny Electric Corporation
Project (A) (B) (C)
3.650%, 07/01/96 300 300
Montgomery County, Pennsylvania
TECP (C)
3.400%, 07/11/96 2,400 2,400
3.500%, 09/09/96 2,000 2,000
Pennsylvania State Higher
Education Facilities Authority
Revenue Bond for Carnegie
Mellon University Project,
Series B (A) (B)
3.700%, 07/01/96 1,500 1,500
Pennsylvania State Higher
Education Facilities Authority
Revenue Bond for Carnegie
Mellon University Project
4.250%, 11/01/96 1,560 1,563
Pennsylvania State Higher
Education Facilities Revenue
Bond for Carnegie Mellon
University Project, Series C
(A) (B)
3.700%, 07/01/96 2,300 2,300
Washington County, Pennsylvania
Lease Revenue Bond (A) (B) (C)
3.300%, 07/05/96 1,155 1,155
---------
13,618
---------
SOUTH CAROLINA -- 1.4%
Berkley County, South Carolina
Pollution Control Revenue
Bond for Amoco Chemical
Project (A) (B) (C)
3.550%, 07/01/96 700 700
Richland County, South Carolina
Hospital Facilities Revenue
Bond for Sunhealth-Orangeburg
Project, Series C2 (A) (B) (C)
3.600%, 07/05/96 450 450
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
90
<PAGE>
[] COREFUND MONEY MARKET FUNDS
- -------------------------------------------------------
DESCRIPTION PAR (000) VALUE (000)
- -------------------------------------------------------
York County, South Carolina
Pollution Control Revenue
Bond, Series NRU-84N-2
(A) (B) (C)
3.150%, 07/05/96 $ 400 $ 400
---------
1,550
---------
SOUTH DAKOTA -- 0.7%
Rapid City, South Dakota
Industrial Development
Authority Revenue Bond for
Corporate Property Association
Project (A) (B) (C)
3.300%, 07/05/96 765 765
---------
TENNESSEE -- 0.2%
Sullivan County, Tennessee
Industrial Development
Authority Pollution Control
Revenue Bond for Mead
Project (A) (B) (C)
3.650%, 07/01/96 200 200
---------
TEXAS -- 13.3%
Camp County, Texas Industrial
Development Authority
Revenue Bond for Texas Oil &
Gas Project (A) (B) (C)
3.300%, 07/05/96 500 500
Grapevine, Texas Industrial
Development Authority
Revenue Bond for American
Airlines Project, Series A4
(A) (B) (C)
3.650%, 07/01/96 100 100
Grapevine, Texas Industrial
Development Authority
Revenue Bond for American
Airlines Project, Series B1
(A) (B) (C)
3.650%, 07/01/96 200 200
Grapevine, Texas Industrial
Development Authority
Revenue Bond for American
Airlines Project, Series B3
(A) (B) (C)
3.650%, 07/01/96 600 600
Houston, Texas TRAN
4.500%, 06/30/97 2,000 2,011
Hunt County, Texas Industrial
Development Authority
Revenue Bond for Trico
Industries Incorporated
Project (A) (B) (C)
3.600%, 07/05/96 1,600 1,600
Montgomery County, Texas
Industrial Development
Authority Revenue Bond for
Dallas Tile Corporation Project,
Series A (A) (B) (C)
3.150%, 07/05/96 100 100
- -------------------------------------------------------
DESCRIPTION PAR (000) VALUE (000)
- -------------------------------------------------------
Nueces County, Texas Health
Facilities Authority Revenue
Bond for Driscoll Children's
Foundation Project (A) (B) (C)
3.150%, 07/05/96 $1,675 $ 1,675
Port Arthur, Texas Navigation
District Industrial Authority
Revenue Bond for American
Petrofina Incorporated
Project (A) (B) (C)
3.800%, 07/01/96 900 900
Texas State Higher Education
Authority Revenue Bond,
Series B (A) (B) (C)
3.100%, 07/05/96 1,900 1,900
Texas State TRAN, Series A
4.750%, 08/30/96 4,600 4,607
---------
14,193
---------
UTAH -- 3.5%
Davis County, Utah TRAN
4.500%, 12/31/96 2,000 2,007
Salt Lake City, Utah TRAN
4.500%, 12/31/96 1,750 1,757
---------
3,764
---------
VERMONT -- 1.2%
Vermont State Student Loan
Revenue Bond for Student
Loan Assistance Corporation
Project (A) (B) (C)
3.650%, 07/01/96 1,335 1,335
---------
VIRGINIA -- 4.2%
Chesapeake, Virginia TECP (C)
3.650%, 09/16/96 1,000 1,000
Virginia State Peninsula Port
Authority TECP (C)
3.600%, 07/17/96 1,000 1,000
3.600%, 09/24/96 1,000 1,000
Virginia State Peninsula Port
Authority Revenue Bond for
Dominion Terminal Project,
Series 1987C (A)
3.600%, 07/01/96 1,500 1,500
---------
4,500
---------
WEST VIRGINIA -- 0.4%
West Virginia State Hospital
Finance Authority Revenue
Bond for St. Mary's Hospital
Project (A) (B) (C)
3.300%, 07/05/96 400 400
---------
WISCONSIN -- 0.7%
Lac Du Flambeau, Wisconsin
Lake Superior Chippewa
Indians Special Obligation for
Simpson Electric Project
(A) (B) (C)
3.450%, 07/01/96 800 800
---------
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
91
<PAGE>
STATEMENT
OF
NET ASSETS
AS OF
JUNE 30, 1996
TAX-FREE RESERVE (CONCLUDED)
- -------------------------------------------------------
DESCRIPTION PAR (000) VALUE (000)
- -------------------------------------------------------
WYOMING -- 4.5%
Converse, Wyoming TECP (C)
3.550%, 09/12/96 $1,000 $ 1,000
Gillette County, Wyoming
TECP (C)
3.600%, 09/19/96 1,200 1,200
Lincoln County, Wyoming
Resource Recovery Revenue
Bond for Exxon Project,
Series C (A) (B) (C)
3.600%, 07/01/96 1,900 1,900
Sublette County, Wyoming
Pollution Control Revenue
Bond for Exxon Project,
Series 84 (A) (B) (C)
3.550%, 07/01/96 700 700
---------
4,800
---------
TOTAL MUNICIPAL BONDS
(Cost $110,154) 110,154
---------
TOTAL INVESTMENTS -- 102.9%
(Cost $110,154) 110,154
---------
OTHER ASSETS AND LIABILITIES,
NET -- (2.9%) (3,108)
---------
- -------------------------------------------------------
DESCRIPTION PAR (000) VALUE (000)
- -------------------------------------------------------
NET ASSETS:
Portfolio Shares - Class Y ($0.001 par value
- 250 million authorized) based on
104,248,346 outstanding shares $104,248
Portfolio Shares - Class C ($0.001 par value -
250 million authorized) based on
2,851,047 outstanding shares 2,851
Accumulated Net Realized Loss on
Investments (53)
---------
TOTAL NET ASSETS -- 100.0% $107,046
=========
NET ASSET VALUE & REDEMPTION PRICE
PER SHARE
CLASS Y $1.00
=========
CLASS C $1.00
=========
(A) VARIABLE RATE SECURITIES--THE RATE REFLECTED ON THE STATEMENT OF THE NET
ASSETS IS THE RATE IN EFFECT ON JUNE 30, 1996.
(B) PUT OR DEMAND FEATURES EXIST REQUIRING THE ISSUER TO REPURCHASE THE
INSTRUMENT PRIOR TO MATURITY. THE MATURITY DATE SHOWN IS THE LESSOR OF THE
PUT DEMAND OR MATURITY DATE.
(C) SECURITIES ARE HELD IN CONNECTION WITH A LETTER OF CREDIT ISSUED BY A MAJOR
COMMERCIAL BANK OR FINANCIAL INSTITUTION.
GO -- GENERAL OBLIGATION
TECP -- TAX EXEMPT COMMERCIAL PAPER
TRAN -- TAX AND REVENUE ANTICIPATION NOTE
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
92
<PAGE>
STATEMENT
OF
OPERATIONS
(000)
[] COREFUND MONEY MARKET FUNDS
FOR THE YEAR
ENDED
JUNE 30, 1996
<TABLE>
<CAPTION>
-------- -------- --------
TAX-
TREASURY CASH FREE
RESERVE RESERVE RESERVE
-------- -------- --------
<S> <C> <C> <C>
INVESTMENT INCOME:
Interest $ 32,947 $ 36,234 $ 2,653
-------- -------- --------
Total investment income 32,947 36,234 2,653
EXPENSES:
Investment advisory fees 2,797 3,063 343
Less investment advisory fees waived (1,102) (1,237) (135)
Administrative fees 1,503 1,618 187
Less administrative fees waived (536) (582) (76)
Transfer agent fees & expenses 172 196 25
Custodian -- -- --
Professional fees 54 59 5
Registration & filing fees 69 102 1
12b-1 fees 51 47 5
Taxes--other than income (137) (155) (23)
Printing 49 53 9
Organization costs -- -- --
Miscellaneous 101 94 12
-------- -------- --------
Total expenses 3,021 3,258 353
-------- -------- --------
NET INVESTMENT INCOME 29,926 32,976 2,300
NET REALIZED AND UNREALIZED LOSS
ON INVESTMENTS:
Net realized loss from security
transactions (4) (2) --
Net change unrealized appreciation
on investments -- -- --
-------- -------- --------
NET INCREASE IN NET ASSETS RESULTING
FROM OPERATIONS $ 29,922 $ 32,974 $ 2,300
======== ======== ========
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
93
<PAGE>
STATEMENT
OF CHANGES
IN NET ASSETS
(000)
FOR THE PERIODS
ENDED
JUNE 30
<TABLE>
<CAPTION>
------------------------ ------------------------ --------------------------
TREASURY CASH TAX-FREE
RESERVE RESERVE RESERVE
------------------------ ------------------------ --------------------------
1996 1995 1996 1995 1996 1995
----------- ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
OPERATIONS:
Net investment income $ 29,926 $ 23,160 $ 32,976 $ 27,369 $ 2,300 $ 2,418
Net realized gain (loss) on securities
transactions (4) 4 (2) (30) -- (27)
----------- ----------- ----------- ----------- ----------- -----------
Net increase in net assets resulting
from operations 29,922 23,164 32,974 27,339 2,300 2,391
----------- ----------- ----------- ----------- ----------- -----------
DIVIDENDS DISTRIBUTED FROM:
Net investment income:
Class Y* (28,940) (22,642) (32,056) (26,626) (2,245) (2,359)
Class C* (986) (518) (920) (743) (55) (59)
Net realized gain:
Class Y* -- -- -- -- -- --
Class C* -- -- -- -- -- --
----------- ----------- ----------- ----------- ----------- -----------
Total dividends distributed (29,926) (23,160) (32,976) (27,369) (2,300) (2,418)
----------- ----------- ----------- ----------- ----------- -----------
CAPITAL SHARE TRANSACTIONS:
Class Y*
Proceeds from shares issued in merger (a) 397,193 -- 220,190 -- 51,375 --
Proceeds from shares issued 2,291,733 1,884,529 1,319,098 1,153,765 223,212 196,955
Reinvestment of cash distributions 5,323 5,268 3,471 3,226 216 228
Cost of shares redeemed (2,280,888) (1,895,568) (1,262,885) (1,151,894) (233,363) (213,785)
----------- ----------- ----------- ----------- ----------- -----------
Increase (decrease) in net assets from
Class Y* transactions 413,361 (5,771) 279,874 5,097 41,440 (16,602)
----------- ----------- ----------- ----------- ----------- -----------
Class C*
Proceeds from shares issued in merger (a) 744 -- 2,038 -- 1,258 --
Proceeds from shares issued 32,271 31,754 34,793 42,775 2,753 3,788
Reinvestment of cash distributions 440 257 905 690 53 55
Cost of shares redeemed (35,682) (17,973) (35,584) (37,332) (2,738) (5,026)
----------- ----------- ----------- ----------- ----------- -----------
Increase (decrease) in net assets from
Class C transactions (2,227) 14,038 2,152 6,133 1,326 (1,183)
----------- ----------- ----------- ----------- ----------- -----------
Increase (decrease) in net assets derived
from capital share transactions 411,134 8,267 282,026 11,230 42,766 (17,785)
----------- ----------- ----------- ----------- ----------- -----------
Net increase (decrease) in net assets 411,130 8,271 282,024 11,200 42,766 (17,812)
----------- ----------- ----------- ----------- ----------- -----------
NET ASSETS:
Beginning of year 500,818 492,547 527,924 516,724 64,280 82,092
----------- ----------- ----------- ----------- ----------- -----------
End of year $ 911,948 $ 500,818 $ 809,948 $ 527,924 $ 107,046 $ 64,280
=========== =========== =========== =========== =========== ===========
<FN>
* ON APRIL 22, 1996 SERIES A SHARES WERE REDESIGNATED CLASS Y AND SERIES B SHARES
WERE REDESIGNATED CLASS C.
(A) ON APRIL 15 & 22, THE CONESTOGA FUNDS WERE AQUIRED BY COREFUNDS INC.
PLEASE SEE THE NOTES TO THE FINANCIAL STATEMENTS FOR FURTHER INFORMATION
REGARDING THE TRANSACTION.
</FN>
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
94
<PAGE>
FINANCIAL
HIGHLIGHTS
[] COREFUND MONEY MARKET FUNDS
FOR THE PERIODS
ENDED
JUNE 30
For a Share Outstanding Throughout the Period
<TABLE>
<CAPTION>
RATIO RATIO OF
NET NET RATIO OF EXPENSES NET INCOME
ASSET DISTRIBUTIONS NET ASSETS RATIO OF NET TO AVERAGE TO AVERAGE
VALUE NET FROM NET ASSET VALUE END OF EXPENSES INCOME NET ASSETS NET ASSETS
BEGINNING INVESTMENT INVESTMENT END TOTAL OF PERIOD TO AVERAGE TO AVERAGE (EXCLUDING (EXCLUDING
OF PERIOD INCOME INCOME OF PERIOD RETURN (000) NET ASSETS NET ASSETS WAIVERS) WAIVERS)
--------- ---------- ------------- -------- ------ --------- ------------ ----------- ----------- ---------
- ----------------
TREASURY RESERVE
- ----------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
CLASS Y*
1996 $1.00 $0.05 $(0.05) $1.00 5.20% $892,562 0.50% 5.02% 0.77% 4.75%
1995 1.00 0.05 (0.05) 1.00 4.98 479,206 0.48 4.91 0.85 4.54
1994 1.00 0.03 (0.03) 1.00 2.91 484,974 0.48 2.87 0.86 2.49
1993 1.00 0.03 (0.03) 1.00 2.96 446,788 0.46 2.89 0.85 2.50
1992 1.00 0.05 (0.05) 1.00 4.73 444,388 0.38 4.58 0.82 4.14
1991 1.00 0.07 (0.07) 1.00 7.11 427,439 0.37 6.80 0.82 6.35
1990 1.00 0.08 (0.08) 1.00 8.38 270,524 0.37 8.03 0.84 7.56
19892 1.00 0.06 (0.06) 1.00 4.66+ 220,479 0.20 9.26 0.84 8.62
CLASS C*
1996 $1.00 $0.05 $(0.05) $1.00 4.94% $ 19,386 0.75% 4.81% 1.03% 4.53%
1995 1.00 0.05 (0.05) 1.00 4.72 21,612 0.73 4.81 1.10 4.44
1994 1.00 0.03 (0.03) 1.00 2.65 7,573 0.73 2.62 1.11 2.24
19931 1.00 0.01 (0.01) 1.00 1.21+ 7,672 0.75 2.46 1.14 2.07
- ------------
CASH RESERVE
- ------------
CLASS Y*
1996 $1.00 $0.05 $(0.05) $1.00 5.26% $790,211 0.50% 5.09% 0.78% 4.81%
1995 1.00 0.05 (0.05) 1.00 5.15 510,341 0.48 5.04 0.85 4.67
1994 1.00 0.03 (0.03) 1.00 3.00 505,273 0.47 2.95 0.85 2.57
1993 1.00 0.03 (0.03) 1.00 2.99 460,832 0.46 2.97 0.85 2.58
1992 1.00 0.05 (0.05) 1.00 4.83 568,672 0.38 4.68 0.82 4.24
1991 1.00 0.07 (0.07) 1.00 7.28 473,187 0.37 6.94 0.82 6.49
1990 1.00 0.08 (0.08) 1.00 8.65 316,290 0.34 8.28 0.80 7.82
1989 1.00 0.09 (0.09) 1.00 8.87 186,151 0.37 8.62 0.90 8.05
1988 1.00 0.07 (0.07) 1.00 6.70 82,399 0.55 6.54 1.14 5.96
1987 1.00 0.06 (0.06) 1.00 5.85 35,054 0.54 5.60 1.01 5.13
CLASS C*
1996 $1.00 $0.05 $(0.05) $1.00 5.00% $ 19,736 0.75% 4.86% 1.03% 4.58%
1995 1.00 0.05 (0.05) 1.00 4.89 17,583 0.73 4.86 1.10 4.49
1994 1.00 0.03 (0.03) 1.00 2.74 11,451 0.72 2.70 1.10 2.32
19931 1.00 0.01 (0.01) 1.00 1.23+ 15,330 0.76 2.52 1.15 2.13
- ----------------
TAX-FREE RESERVE
- ----------------
CLASS Y*
1996 $1.00 $0.03 $(0.03) $1.00 3.20% $104,196 0.48% 3.14% 0.76% 2.86%
1995 1.00 0.03 (0.03) 1.00 3.12 62,756 0.48 3.09 0.85 2.72
1994 1.00 0.02 (0.02) 1.00 2.03 79,384 0.49 2.00 0.87 1.62
1993 1.00 0.02 (0.02) 1.00 2.23 72,255 0.51 2.20 0.89 1.82
1992 1.00 0.03 (0.03) 1.00 3.56 80,147 0.37 3.39 0.88 2.88
19913 1.00 0.01 (0.01) 1.00 1.07+ 42,573 0.06 4.20 0.81 3.45
CLASS C*
1996 $1.00 $0.03 $(0.03) $1.00 2.95% $ 2,850 0.73% 2.94% 1.02% 2.65%
1995 1.00 0.03 (0.03) 1.00 2.86 1,524 0.73 2.80 1.10 2.43
1994 1.00 0.02 (0.02) 1.00 1.78 2,708 0.74 1.75 1.12 1.37
19931 1.00 0.01 (0.01) 1.00 0.85+ 1,795 0.76 1.71 1.14 1.33
<FN>
* ON APRIL 22, 1996, SERIES A SHARES WERE REDESIGNATED CLASS Y AND SERIES B SHARES WERE REDESIGNATED CLASS C.
+ RETURNS ARE FOR THE PERIOD INDICATED AND HAVE NOT BEEN ANNUALIZED.
1 COMMENCED OPERATIONS JANUARY 4, 1993. RATIOS FOR THE PERIOD HAVE BEEN ANNUALIZED.
2 COMMENCED OPERATIONS NOVEMBER 21, 1988. RATIOS FOR THE PERIOD HAVE BEEN ANNUALIZED.
3 COMMENCED OPERATIONS APRIL 16, 1991. RATIOS FOR THE PERIOD HAVE BEEN ANNUALIZED.
</FN>
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
95
<PAGE>
NOTES TO
FINANCIAL
STATEMENTS
FOR THE YEAR
ENDED
JUNE 30, 1996
1. ORGANIZATION
The CoreFund Equity Index Fund, Equity Fund, Growth Equity Fund, Special
Equity Fund, International Growth Fund, Balanced Fund (the Equity Funds), Short
Term Income Fund, Short- Intermediate Bond Fund, Government Income Fund, Bond
Fund, Intermediate Municipal Bond Fund, Global Bond Fund, Pennsylvania Municipal
Bond Fund, New Jersey Municipal Bond Fund (the Fixed Income Funds), Cash
Reserve, Treasury Reserve, and Tax-Free Reserve (the Money Market Funds) are
portfolios offered by CoreFunds, Inc. (The Company), an open-end investment
company registered under the Investment Company Act of 1940, as amended. The
Company is presently authorized to offer 20 separate portfolios (the
Portfolios):
EQUITY PORTFOLIOS: MONEY MARKET PORTFOLIOS:
Equity Index Fund Treasury Reserve
Equity Fund Cash Reserve
Growth Equity Fund Tax-Free Reserve
Special Equity Fund Fiduciary Reserve
International Growth Fund Fiduciary Treasury Reserve
Balanced Fund Fiduciary Tax-Free Reserve
FIXED INCOME PORTFOLIOS:
Short Term Income Fund
Short-Intermediate Bond Fund
Government Income Fund
Bond Fund
Intermediate Municipal Bond Fund
Global Bond Fund
Pennsylvania Municipal Bond Fund
New Jersey Municipal Bond Fund
The financial statements of the Equity Funds are included on pages 37 to
62, the financial statements of the Fixed Income Funds are included on pages 63
to 83 and the financial statements of the Money Market Funds are included on
pages 84 to 95. The financial statements of the Fiduciary Reserve, Fiduciary
Treasury Reserve and Fiduciary Tax-Free Reserve are not presented herein.
The assets of each Portfolio are segregated, and a Shareholder's interest
is limited to the Portfolio in which shares are held. The Funds' prospectus
provides a description of the Funds' investment objectives, policies and
strategies.
2. SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies followed by
the Portfolios.
SECURITY VALUATION--Investment securities of the Equity and Fixed Income
Funds which are listed on a securities exchange for which market quotations are
available are valued by an independent pricing service at the last quoted sales
price for such 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 recent quoted bid price using
procedures determined in good faith by the Board of Trustees. Debt obligations
with sixty days or less remaining until maturity may be valued at their
amortized cost. Under this valuation method, purchase discounts and premiums are
accreted and amortized ratably to maturity and are included in interest income.
Investment securities of the Money Market Funds are stated at amortized
cost which approximates market value. Under this valuation method,
purchaseydiscounts and premiums are accreted and amortized ratably to maturity
and are included in interest income.
The books and records of the International Growth Fund and Global Bond
Fund are maintained in U.S. dollars. Foreign currency amounts are translated
into U.S. dollars on the following bases:
(I) market value of investment securities, asset 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 Growth Fund does not isolate the portion of gains or
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 Growth Fund and Global Bond Fund report certain foreign
currency related transactions as components of unrealized and realized gains for
financial reporting purposes, whereas such components are treated as ordinary
income for Federal income tax purposes.
96
<PAGE>
[] COREFUND
FORWARD FOREIGN CURRENCY CONTRACTS--The International Growth Fund and
Global Bond Fund enter into forward foreign currency contracts as hedges against
either specific transactions or portfolio positions. The aggregate principal
amounts of the contracts are not recorded as the funds intend to settle the
contracts prior to delivery. All commitments are "marked-to-market" daily at the
applicable foreign exchange rate and any resulting unrealized gains or losses
are recorded currently. The funds realize gains or losses at the time forward
contracts are extinguished. Financial future contracts are valued at the
settlement price established each day by the board of trade on exchange on which
they are traded.
SECURITY TRANSACTIONS AND INVESTMENT INCOME--Security transactions are
accounted for on the trade date of the security purchase or sale. 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 or premiums during the respective holding
period, which is calculated using the effective interest method. Interest income
is recorded on the accrual basis. Dividend income is recorded on ex-dividend
date.
REPURCHASE AGREEMENTS--Securities pledged as collateral for Repurchase
Agreements are held by each Portfolio's custodian bank until maturity of the
Repurchase Agreements. Provisions of the Agreements and procedures adopted by
the Advisor ensure that the market value of the collateral, including accrued
interest thereon, is sufficient in the event of default by the counterparty. If
the counterparty defaults and the value of the collateral declines or if the
counterparty enters into insolvency proceedings, realization of collateral by
the Portfolio may be delayed or limited.
EXPENSES--Expenses that are directly related to one of the Portfolios are
charged directly to that Portfolio. Other operating expenses of the Company are
pro-rated to the Portfolios on the basis of relative net assets.yClass specific
expenses, such as the 12B-1 fees, are borne by that class. Income, other
expenses and accumulated realized and unrealized gains and losses of a Portfolio
are allocated to the respective class on the basis of the relative net asset
value each day.
DISTRIBUTION TO SHAREHOLDERS--The Equity Index, Equity, Growth Equity,
Special Equity, Balanced Fund and Global Bond Fund declare and pay dividends on
a quarterly basis. The International Growth Fund declares and pays dividends on
a semi-annual basis. Such dividends are reinvested in additional shares unless
otherwise requested. The Short Term Income Fund, Short-Intermediate Bond Fund,
Government Income Fund, Bond Fund, Intermediate Municipal Bond Fund,
Pennsylvania Municipal Bond Fund, New Jersey Municipal Bond Fund, Treasury
Reserve, Cash Reserve and Tax-Free Reserve distributions from net investment
income are declared on a daily basis and are payable on the first business day
of the following month. Any net realized capital gains on sales of securities
for a Portfolio are distributed to its shareholders at least annually.
Distributions from net investment income and net realized capital gains are
determined in accordance with U.S. Federal income tax regulations, which may
differ from those amounts determined under generally accepted accounting
principles. These book/tax differences are either temporary or permanent in
nature. To the extent these differences are permanent, they are charged or
credited to paid in capital in the period that the difference arises.
Accordingly, the following permanent differences primarily attributable to
realized foreign exchange gains and losses, have been reclassified from
accumulated net realized gain (loss) on foreign currency transactions to
undistributed net investment income:
(000)
--------
INTERNATIONAL GROWTH FUND $ 1,440
GLOBAL BOND FUND (1,068)
These reclassifications have no effect on net assets or net asset values per
share.
FEDERAL INCOME TAXES--It is each Portfolio's intention to continue to
qualify as a regulated investment company and distribute all of its taxable
income. Accordingly, no provision for Federal income tax is required.
OTHER--Organizational costs incurred with the start up of the Balanced
Fund, Government Income Fund, Short Term Income Fund, Intermediate Municipal
Bond Fund, Global Bond Fund, Pennsylvania Municipal Bond Fund and New Jersey
Municipal Bond Fund are being amortized on a straight line basis over a maximum
period of sixty months. If any or all of the shares representing initial capital
of each fund are redeemed by any holder thereof prior to the end of the
amortization period, the proceeds will be reduced by the unamortized
organizational cost balance in the same proportion as the number of shares
redeemed bears to the initial shares outstanding immediately preceding the
redemption.
97
<PAGE>
NOTES TO
FINANCIAL
STATEMENTS
(CONTINUED)
FOR THE YEAR
ENDED
JUNE 30, 1996
3. INVESTMENT ADVISORY AND CUSTODIAL SERVICES
The Company has entered into an investment advisory agreement with
CoreStates Investment Advisers, Inc. ("CSIA") to provide investment advisory
services to each Fund. For its services CSIA receives a fee based on the annual
average daily net assets of each Fund as shown in the following table:
<TABLE>
<CAPTION>
ADVISER INVESTMENT ADVISORY ADVISER INVESTMENT ADVISORY
FUND FEE AGREEMENT DATE FUND FEE AGREEMENT DATE
- -------------------- ------- ------------------ ----------------------- ------ ------------------
<S> <C> <C> <C> <C> <C>
Equity Index 0.40% March 25, 1991 Short Term Income 0.74% April 12, 1996
Equity 0.74 April 12, 1996 Short-Intermediate Bond 0.50 March 25, 1991
Growth Equity 0.75 March 25, 1991 Government Income 0.50 March 25, 1991
Special Equity 1.50 April 12, 1996 Bond 0.74 April 12, 1996
International Growth 0.80 December 5, 1989 Global Bond 0.60 March 25, 1991
Balanced 0.70 March 25, 1991 Intermediate Municipal 0.50 March 25, 1991
Bond
Treasury Reserve 0.40 April 12, 1996 Pennsylvania Municipal 0.50 May 15, 1994
Cash Reserve 0.40 April 12, 1996 Bond
Tax-Free Reserve 0.40 April 12, 1996 New Jersey Municipal 0.50 May 15, 1994
Bond
</TABLE>
Prior to April 22, 1996 the Adviser fee for the Equity, Treasury Reserve,
Cash Reserve and Tax-Free Reserve were 0.75%, 0.50%, 0.50% and 0.50%,
respectively. This fee is computed daily and paid monthly for all Funds.
Additionally, for the year ended June 30, 1996, CSIA has voluntarily waived a
portion of their fees in order to assist the Funds in maintaining competitive
expense ratios.
CoreStates Bank serves as Custodian to the Company. No fees are being paid
to CoreStates Bank for such services. Sub-Advisory services are provided to the
CoreStates Advisers for the International Growth Fund by Martin Currie, Inc. and
Aberdeen Managers (The "Sub-Advisers"). Sub-Advisory services are provided for
the Global Bond Fund by Analytic TSA (formerly Alpha Global). CoreStates
Advisers is responsible for the supervision, and payment of fees to the
Sub-Advisers in connection with their services.
4. ADMINISTRATIVE, TRANSFER AGENT AND DISTRIBUTION SERVICES
Pursuant to an Administration agreement dated October 30, 1992, as amended
June 1, 1995, SEI Fund Resources ("SFR") acts as the Portfolio's Administrator.
Under the terms of such agreement, SFR is entitled to receive an annual fee of
0.25% on the average net assets of the Portfolios. SFR voluntarily waives a
portion of their fees in order to assist the Funds in maintaining competitive
expense ratios.
Effective for the period July 1, 1995 to November 16, 1995, SEI Financial
Management Corporation acted as the Transfer Agent of the Trust. Pursuant to a
Transfer Agency agreement dated November 16, 1995, Boston Financial Data
Services ("BFDS"), a wholly owned subsidiary of State Street Bank and Trust
Company acts as the Portfolio's Transfer Agent. As such, BFDS provides transfer
agency, dividend disbursing and shareholder servicing for the Portfolios.
On November 2, 1992, SEI Financial Services ("SFS"), a wholly owned
subsidiary of SEI, became the "Portfolios" exclusive Distributor pursuant to a
distribution agreement dated October 30, 1992.
The Company has adopted a Distribution Plan (the Plan) for those Portfolios
offering Class A shares. The Plan provides for the payment by the Company to the
Distributor of up to 0.25% of the daily net assets of each Class A and C
Portfolio to which the Plan is applicable. The Distributor is authorized to use
this fee as compensation for its distribution related services and as payment to
certain securities broker/dealers and financial institutions which enter into
shareholder servicing agreements or broker agreements with the Distributor. The
Portfolios paid approximately $149,000 to affiliated brokers for the fiscal year
ended 1996 for commissions earned on the sales of the shares of the Funds.
Certain officers of the Company are also officers of the Administrator.
Such officers are paid no fees by the Portfolios.
The Portfolios have paid legal fees to a law firm in which the Secretary of
the Company is partner.
98
<PAGE>
[] COREFUND
5. INVESTMENT TRANSACTIONS
During the year ended June 30, 1996, purchases of securities and proceeds
from sales of securities, other than temporary investments in short-term
securities, were as follows:
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------
------------------------------- --------------------------------
PURCHASES SALES
------------------------------- --------------------------------
U.S. U.S.
PORTFOLIO INVESTMENT TRANSACTIONS (000) GOVERNMENT OTHER TOTAL GOVERNMENT OTHER TOTAL
---------- -------- -------- ---------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Growth Equity Fund $ -- $ 85,109 $ 85,109 $ -- $ 71,263 $ 71,263
Equity Fund -- 96,249 96,249 -- 100,409 100,409
Equity Index Fund -- 44,239 44,239 -- 21,174 21,174
Special Equity Fund -- 41,311 41,311 -- 46,401 46,401
International Growth Fund -- 49,435 49,435 -- 60,528 60,528
Balanced Fund 5,185 46,745 51,930 3,454 52,078 55,532
Government Income Fund 15,770 6,658 22,428 13,405 4,170 17,575
Short Term Income Fund 21,055 6,307 27,362 19,921 2,952 22,873
Short-Intermediate Bond Fund 52,624 39,555 92,179 56,010 30,134 86,144
Intermediate Municipal Fund -- 249 249 -- 221 221
Bond Fund $214,483 166,396 380,879 219,103 156,101 375,204
Global Bond Fund 6,754 20,693 27,447 1,816 16,209 18,025
Pennsylvania Municipal Bond Fund -- 2,600 2,600 -- 1,865 1,865
New Jersey Municipal Bond Fund -- 635 635 -- 742 742
- ----------------------------------------------------------------------------------------------------------------
</TABLE>
At June 30, 1996, the Government Income Fund, Short- Intermediate Bond
Fund, Intermediate Municipal Bond Fund, Global Bond Fund, Pennsylvania Municipal
Bond Fund, Cash Reserve and Tax-Free Reserve had capital loss carryforwards for
federal tax purposes of approximately $211,666, $1,700,933, $76,745, $990,270,
$8,879, $32,384 and $54,381, respectively, resulting from security sales. For
tax purposes, the losses in the Funds can be carried forward for a maximum of
eight years to offset any net realized capital gains. The carryforward for the
Government Income Fund, Short- Intermediate Bond Fund, Intermediate Municipal
Bond Fund, Global Bond Fund, Cash Reserve and Tax-Free Reserve Funds expires in
2003.
At June 30, 1996 the total cost of securities and the net realized gains or
losses on securities sold for Federal income tax purposes was not materially
different from amounts reported for financial purposes. The aggregate gross
unrealized gain or loss on securities at June 30, 1996 for each portfolio within
the CoreFunds is as follows:
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------
------------ ------------ --------
AGGREGATE AGGREGATE
GROSS GROSS
AGGREGATE GROSS UNREALIZED GAIN (LOSS) (000) APPRECIATION DEPRECIATION NET
------------ ------------ --------
<S> <C> <C> <C>
Growth Equity Fund $33,348 $ (783) $32,565
Equity Fund 53,452 (9,650) 43,802
Equity Index Fund 45,993 (2,879) 43,114
Special Equity Fund 9,558 (6,641) 2,917
International Growth Fund 16,025 (4,090) 11,935
Balanced Fund 14,374 (1,776) 12,598
Government Income Fund 47 (431) (384)
Short Term Income Fund 20 (98) (78)
Short-Intermediate Bond Fund 621 (1,317) (696)
Intermediate Municipal Fund 6 (10) (4)
Bond Fund 541 (2,655) (2,114)
Global Bond Fund 867 (817) 50
Pennsylvania Municipal Bond Fund 127 (109) 18
New Jersey Municipal Bond Fund 26 (3) 23
- ----------------------------------------------------------------------------------------
</TABLE>
99
<PAGE>
NOTES TO
FINANCIAL
STATEMENTS
(CONTINUED)
FOR THE YEAR
ENDED
JUNE 30, 1996
6. FORWARD FOREIGN CURRENCY CONTRACTS
The International Growth Fund and Global Bond Fund enter into forward foreign
currency contracts as hedges against portfolio positions. Such contracts, which
protect the value of a 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 were outstanding at
June 30, 1996:
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------
---------------- ------------ --------------
UNREALIZED
CONTRACTS TO IN EXCHANGE APPRECIATION
INTERNATIONAL GROWTH FUND: DELIVER/RECEIVE FOR (DEPRECIATION)
---------------- ------------ --------------
<S> <C> <C> <C>
Foreign Currency Sales:
8/14/96 JY 2,337,449,153 $22,588,500 $1,091,155
==========
Foreign Currency Purchases:
8/14/96 JY 1,186,482,931 11,118,500 $ (206,505)
==========
Net Unrealized Appreciation $ 884,650
==========
GLOBAL BOND FUND:
Foreign Currency Sales:
7/26/96 DM 8,822,000 $ 5,833,499 $ 22,820
7/22-10/22/96 DK 22,132,600 3,816,448 33,699
7/22-8/22/96 FF 21,700,000 4,231,258 2,573
7/26/96 NL 5,123,500 3,030,939 20,726
----------
Net Unrealized Appreciation $ 79,818
==========
- --------------------------------------------------------------------------------------
</TABLE>
CURRENCY LEGEND
DM German Marks
DK Danish Kroner
FF French Francs
JY Japanese Yen
NL Netherlands Guilder
100
<PAGE>
[] COREFUND
7. CONCENTRATION OF CREDIT RISK
The Intermediate Municipal Bond Fund, Pennsylvania Municipal Bond Fund, New
Jersey Municipal Bond Fund, and Tax-Free Reserve invest in debt instruments of
municipal issuers. Although these Funds maintain a diversified portfolio, with
the exception of the Pennsylvania Municipal Bond Fund and the New Jersey
Municipal Bond Fund, the issuers ability to meet their obligations may be
affected by economic developments in a specific state or region.
The Intermediate Municipal Bond Fund, Pennsylvania Municipal Bond Fund, New
Jersey Municipal Bond Fund, and Tax-Free Reserve invest in securities which
include revenue bonds, tax exempt commercial paper, tax and revenue anticipation
notes, and general obligation bonds. At June 30, 1996, the percentage of
portfolio investments by each revenue source was as follows:
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------
------------ ------------ ---------- --------
INTERMEDIATE PENNSYLVANIA NEW JERSEY
MUNICIPAL MUNICIPAL MUNICIPAL
BOND BOND BOND TAX-FREE
FUND FUND FUND RESERVE
------------ ------------ ---------- --------
<S> <C> <C> <C> <C>
REVENUE BONDS:
Education Bonds 18.2% 21.5% 22.3% 11.8%
Health Care Bonds 3.8 12.6 11.1 6.1
Transportation Bonds 16.3 7.3 18.6 8.5
Utility Bonds 21.2 14.9 8.5 3.1
Housing Bonds -- 5.2 -- --
Pollution Control Bonds -- -- -- 8.5
Industrial Bonds -- 3.9 -- 7.9
Other 3.7 3.0 6.9 8.4
GENERAL OBLIGATIONS 36.8 31.6 32.6 3.6
TAX EXEMPT COMMERCIAL PAPER -- -- -- 34.4
TAX AND REVENUE ANTICIPATION NOTES -- -- -- 6.8
TAX ANTICIPATION NOTES -- -- -- 0.9
--- --- --- ---
100% 100% 100% 100%
- ---------------------------------------------------------------------------------------
</TABLE>
The rating of long-term debt as a percentage of total value of investments
at June 30, 1996 is as follows:
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------
------------ ------------ ---------- ------ ------------ ------------
SHORT- PENNSYLVANIA NEW JERSEY
INTERMEDIATE INTERMEDIATE GOVERNMENT GLOBAL INTERMEDIATE INTERMEDIATE
BOND MUNICIPAL INCOME BOND MUNICIPAL MUNICIPAL
FUND FUND FUND FUND FUND FUND
------------ ------------ ---------- ------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
STANDARD & POORS RATINGS:
AAA 71% 54% 100% 89% 74% 32%
AA 3 22 -- 7 20 49
AA+ -- -- -- -- -- --
AA- -- -- -- -- -- --
A+ -- -- -- -- -- --
A 11 7 -- -- 5 7
NR 15 17 -- 4 1 12
--- --- --- --- --- ---
100% 100% 100% 100% 100% 100%
- ----------------------------------------------------------------------------------------------------
</TABLE>
Many municipalities insure their obligations with insurance underwritten by
insurance companies which undertake to pay a holder, when due, the interest and
principal amount on an obligation if the issuer defaults on its obligation.
Although bond insurance reduces the risk of loss due to default by the issuer,
there is no assurance that the insurance company will meet its obligations.
Also, some of the securities have credit enhancements (letters of credit or
guarantees issued by third party domestic or foreign banks or other
institutions). At June 30, 1996, the percentage of securities with credit
enhancements are as follows:
----------------------------------------------------------------------
------- ---------
LETTERS
OF BOND
CREDIT INSURANCE
------ ---------
Intermediate Municipal Fund -- 64.3%
Pennsylvania Municipal Bond Fund -- 56.1
New Jersey Municipal Bond Fund -- 27.9
Tax-Free Reserve 76.3% --
-----------------------------------------------------------------------
101
<PAGE>
NOTES TO
FINANCIAL
STATEMENTS
(CONTINUED)
FOR THE YEAR
ENDED
JUNE 30, 1996
8. SHARE TRANSACTIONS (000):
For the fiscal year ended June 30, 1996.
<TABLE>
<CAPTION>
------ ------- ------ ------- ------------- -------- ---------- ---------- --------
EQUITY GROWTH SPECIAL INTERNATIONAL
INDEX EQUITY EQUITY EQUITY GROWTH BALANCED CASH TREASURY TAX-FREE
FUND FUND (1) FUND FUND (2) FUND FUND RESERVE RESERVE RESERVE
------ ------- ------ ------- ------------- -------- ---------- ---------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
INSTITUTIONAL
Shares exchanged for
Class Y shares -- -- (5,306) -- -- -- -- --
Shares issued -- 2,000 -- 622 -- -- -- -- --
Shares issued in lieu
of cash distributions -- 3,511 -- 885 -- -- -- -- --
Shares repurchased -- (5,337) -- (1,228) -- -- -- -- --
------ ------ ------ ------ ------ ------ ---------- ---------- --------
Net Increase (Decrease) -- 174 -- (5,027) -- -- -- -- --
====== ====== ====== ====== ====== ====== ========== ========== ========
CLASS Y*
Shares issued in merger* -- 2,067 -- 5,306 1,175 3,164 220,322 397,193 51,380
Shares issued 1,922 980 1,955 237 1,312 1,463 1,319,098 2,291,733 223,212
Shares issued in lieu
of cash distributions 234 -- 253 -- 209 211 3,471 5,323 216
Shares repurchased (1,045) (1,348) (1,918) (174) (1,752) (2,218) (1,262,885) (2,280,888) (233,363)
------ ------ ------ ------ ------ ------ ---------- ---------- --------
Net increase 1,111 1,699 290 5,369 944 2,620 280,006 413,361 41,445
====== ====== ====== ====== ====== ====== ========== ========== ========
RETAIL
Shares exchanged
for Class A shares -- -- -- (89) -- -- -- -- --
Shares issued -- 60 -- 16 -- -- -- -- --
Shares issued in lieu
of cash distributions -- 70 -- 12 -- -- -- -- --
Shares repurchased -- (38) -- (3) -- -- -- -- --
------ ------ ------ ------ ------ ------ ---------- ---------- --------
Net increase (Decrease) -- 92 -- (64) -- -- -- -- --
====== ====== ====== ====== ====== ====== ========== ========== ========
CLASS A*
Shares issued in merger -- 169 -- 89 4 8 2,041 744 1,258
Shares issued -- 32 78 8 32 55 34,793 32,271 2,753
Shares issued in lieu
of cash distributions -- -- 6 -- 4 8 905 440 53
Shares repurchased -- (33) (44) -- (45) (30) (35,584) (35,682) (2,738)
------ ------ ------ ------ ------ ------ ---------- ---------- --------
Net increase (Decrease) -- 168 40 97 (5) 41 2,155 (2,227) 1,326
====== ====== ====== ====== ====== ====== ========== ========== ========
TOTAL SHARE ACTIVITY
FOR PERIOD 1,111 2,133 330 375 939 2,661 282,161 411,134 42,771
====== ====== ====== ====== ====== ====== ========== ========== ========
</TABLE>
102
<PAGE>
[] COREFUND
8. SHARE TRANSACTIONS (000): -- CONTINUED
<TABLE>
<CAPTION>
---------- ------------ ---------- -------- -------- ------------ ------------ ----------
SHORT-
SHORT TERM INTERMEDIATE GOVERNMENT GLOBAL INTERMEDIATE PENNSYLVANIA NEW JERSEY
INCOME BOND INCOME BOND BOND MUNICICPAL MUNICIPAL MUNICIPAL
FUND (2) FUND FUND FUND (2) FUND BOND FUND BOND FUND BOND FUND
---------- ------------ ---------- -------- -------- ------------ ------------ ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
INSTITUTIONAL
Shares exchanged
for Class Y shares (3,004) -- -- (19,082) -- -- -- --
Shares issued 576 -- -- 2,678 -- -- -- --
Shares issued in lieu
of cash distributions 93 -- -- 674 -- -- -- --
Shares repurchased (1,252) -- -- (2,692) -- -- -- --
------- ------- ------- ------- ------- ------- ------- -------
Net Increase (3,587) -- -- (18,422) -- -- -- --
======= ======= ======= ======= ======= ======= ======= =======
CLASS Y*
Shares issued in merger* 3,004 11,582 -- 19,082 -- -- 558 --
Shares issued 213 1,699 542 1,306 523 20 113 34
Shares issued in lieu
of cash distributions 20 380 42 139 164 1 13 4
Shares repurchased (206) (2,892) (284) (951) (80) (17) (39) (60)
------- ------- ------- ------- ------- ------- ------- -------
Net increase 3,031 10,769 300 19,576 607 4 645 (22)
======= ======= ======= ======= ======= ======= ======= =======
RETAIL
Shares exchanged
for Class A shares -- -- -- (127) -- -- -- --
Shares issued -- -- -- 12 -- -- -- --
Shares issued in lieu
of cash distributions -- -- -- 4 -- -- -- --
Shares repurchased (1) -- -- (19) -- -- -- --
------- ------- ------- ------- ------- ------- ------- -------
Net Increase (1) -- -- (130) -- -- -- --
======= ======= ======= ======= ======= ======= ======= =======
CLASS A*
Shares issued in merger* -- 123 -- 127 -- -- 67 --
Shares issued -- 28 16 6 -- 13 12 28
Shares issued in lieu
of cash distributions -- 9 7 1 1 3 2 --
Shares repurchased -- (45) (29) (9) (3) (18) (15) --
------- ------- ------- ------- ------- ------- ------- -------
Net increase -- 115 (6) 125 (2) (2) 66 28
======= ======= ======= ======= ======= ======= ======= =======
TOTAL SHARE ACTIVITY
FOR PERIOD (557) 10,884 294 1,149 605 2 711 6
======= ======= ======= ======= ======= ======= ======= =======
<FN>
* ON APRIL 15, 1996 COREFUNDS INC. ACQUIRED THE CONESTOGA FUNDS. AMOUNTS SHOWN
IN THE 'SHARES ISSUED IN MERGER' CAPTION REFLECT SHARES OF THE RESPECTIVE
COREFUND ISSUED IN EXCHANGE FOR THE ASSETS OF THE RESPECTIVE CONESTOGA FUND. ON
APRIL 15 & 22 SERIES A SHARES WERE REDESIGNATED CLASS Y AND SERIES B SHARES WERE
REDESIGNATED CLASS A FOR ALL FUNDS EXCEPT CASH RESERVE, TREASURY RESERVE, AND
TAX-FREE RESERVE, WHICH WERE REDESIGNATED AS CLASS C SHARES.
(1) AMOUNTS ARE FOR THE PERIOD NOVEMBER 1, 1995 THROUGH APRIL 14, 1996.
(2) AMOUNTS ARE FOR THE PERIOD NOVEMBER 1, 1995 THROUGH APRIL 21, 1996.
</FN>
</TABLE>
103
<PAGE>
NOTES TO
FINANCIAL
STATEMENTS
(CONTINUED)
FOR THE YEAR
ENDED
JUNE 30, 1996
9. ACQUISITION OF THE CONESTOGA FUNDS
On December 7, 1995 and December 21, 1995, respectively, the Board of
Trustees of the Company and the Board of Trustees of the Conestoga Funds
(Conestoga) approved an Agreement and Plan of Reorganization (the
"Reorganization Agreement") providing for the transfer of all assets and
liabilities of the Conestoga Funds in exchange for the issuance of shares in the
Company in a tax-free reorganization. At a special meeting of shareholders held
on March 22, 1996, the shareholders of Conestoga voted to approve the
Reorganization Agreement. Pursuant to the Reorganization Agreement, on April 15,
1996 substantially all of the assets and liabilities of the Conestoga Cash
Management, Tax-Free, U.S. Treasury Securities, Equity, Intermediate Income,
Pennsylvania Tax-Free Bond, Balanced and International Equity Funds were
transferred to the Company in a tax-free exchange for either institutional or
individual shares of the Company, except for all of the assets and liabilities
of the Conestoga Special Equity, Bond and Short-Term Income Funds which
transferred on April 22, 1996 to newly-organized CoreFund investment portfolios.
The detail of these business combinations as they relate to the Portfolios are
described below.
The following table summarizes certain relevant information of the
Portfolios prior to and immediately after the business combinations on April 15,
1996 and April 22, 1996. Unless indicated otherwise, the CoreFund Portfolio is
the accounting survivor.
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------------
SHARES COMBINED
ISSUED IN NET ASSETS NAV
SHARES @ NET ASSETS @ BUSINESS AFTER BUSINESS PER
CONESTOGA FUND 4/15/ 96 4/15/ 96 COREFUND COMBINATION COMBINATION SHARE
- -------------------- -------------- ------------- ----------------------- -------------- -------------- --------
<S> <C> <C> <C> <C> <C> <C>
Cash Management Fund Cash Reserve
Institutional Shares 220,322,384 $220,189,531 Institutional Shares 220,189,709 $847,447,402 $ 1.00
Retail Shares 2,041,405 2,038,370 Individual Shares 2,038,419 20,673,698 1.00
Tax-Free Fund Fund Tax-Free Reserve
Institutional Shares 51,379,922 51,375,489 Institutional Shares 51,375,516 104,896,223 1.00
Retail Shares 1,258,231 1,258,071 Individual Shares 1,258,231 2,631,816 1.00
U.S. Treasury Securities Fund Treasury Reserve
Institutional Shares 397,192,930 397,192,693 Institutional Shares 397,375,516 907,179,954 1.00
Retail Shares 743,703 743,873 Individual Shares 743,703 20,662,296 1.00
Equity Fund1 Equity Fund
Institutional Shares 22,334,281 370,740,042 Institutional Shares 2,066,877 405,049,356 16.60
Retail Shares 477,115 7,916,398 Individual Shares 169,196 10,723,729 16.59
Intermediate Income Fund Short-Intermediate Bond Fund
Institutional Shares 10,943,740 113,378,113 Institutional Shares 11,581,750 169,106,386 9.79
Retail Shares 116,393 1,206,986 Individual Shares 123,311 3,060,429 9.79
Pennsylvania Tax-Free Fund Pennsylvania Municipal Bond Fund
Institutional Shares 566,976 5,703,144 Institutional Shares 557,994 8,784,273 10.22
Retail Shares 68,008 684,055 Individual Shares 66,905 929,951 10.22
Balanced Fund Balanced Fund
Institutional Shares 3,720,166 38,297,844 Institutional Shares 3,163,886 107,866,268 12.10
Retail Shares 9,232 95,033 Individual Shares 7,850 2,870,301 12.11
International Equity Fund International Growth Fund
Institutional Shares 1,454,181 16,130,491 Institutional Shares 1,174,860 143,410,586 13.73
Retail Shares 5,304 58,772 Individual Shares 4,281 2,134,656 13.72
- --------------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
SHARES COMBINED
ISSUED IN NET ASSETS NAV
SHARES @ NET ASSETS @ BUSINESS AFTER BUSINESS PER
CONESTOGA FUND 4/22/ 96 4/22/ 96 COREFUND COMBINATION COMBINATION SHARE
- ------------------ ---------------- ------------ -------------------------- ----------- -------------- --------
<S> <C> <C> <C> <C> <C> <C>
Special Equity Fund(1) Special Equity Fund
Institutional Shares 5,306,327 $ 58,928,614 Institutional Shares 5,306,327 $ 58,928,614 $11.11
Retail Shares 88,731 984,343 Individual Shares 88,731 984,343 11.09
Bond Fund(1) Bond Fund
Institutional Shares 19,081,597 194,598,883 Institutional Shares 19,081,597 194,598,883 10.20
Retail Shares 126,977 1,295,564 Individual Shares 126,977 1,295,564 10.20
Short-Term Income Fund(1) Short Term Income Fund
Institutional Shares 3,004,321 29,907,243 Institutional Shares 3,004,321 29,907,243 9.95
Retail Shares 48 474 Individual Shares 48 474 9.94
</TABLE>
The acquired unrealized appreciation/(depreciation) at April 15, 1996 of the
Conestoga Intermediate Income, Pennsylvania Tax-Free, Balanced and International
Equity Funds were ($1,420,974), ($78,904), $981,675, and $1,348,380,
respectively. The acquired appreciation of the Conestoga Equity Fund at April
15, 1996 was $4,231,903. The acquired unrealized appreciation/(depreciation) at
April 22, 1996 of the Conestoga Special Equity, Bond, and Short-Term Income
Funds were $4,066,989, ($4,179,133) and ($57,636), respectively.
(1) THE CONESTOGA FUND IS THE ACCOUNTING SURVIVOR IN THIS BUSINESS COMBINATION.
104
<PAGE>
[] COREFUND
10. SHAREHOLDER VOTING RESULTS (UNAUDITED):
There was a special meeting scheduled for April 9,1996 at which the
shareholders of the Cash Reserve, Treasury Reserve, Growth Equity Fund, Short
Intermediate Bond Fund (formerly Intermediate Bond Fund), Government Income
Fund, Intermediate Municipal Bond Fund, Tax-Free Reserve, Value Equity Fund,
Global Bond Fund, Equity Index Fund, Balanced Fund, International Growth Fund,
New Jersey Municipal Bond Fund, Fiduciary Reserve, Fiduciary Tax Free Reserve,
Fiduciary Treasury Reserve, (the "Funds") voted on a series of proposals (the
"Proposals"). With respect to Proposal 2 relating to the Pennsylvania Municipal
Bond Fund, the meeting was adjourned until July 17, 1996. The proposals and the
results of the shareholder meeting are set forth below (unaudited).
PROPOSAL 1: To consider and act upon a proposal to elect a Board of Directors.
ELECTION OF DIRECTORS:
SHARES VOTED "FOR" % OF VOTED % OF TOTAL
------------------ ------------ ----------
Emil J. Mikity 897,624,729.00 99.67% 54.71%
George H. Strong 897,631,180.00 99.67% 54.71%
Erin Anderson 897,649,083.00 99.67% 54.71%
Cheryl H. Wade 897,614,431.00 99.67% 54.71%
Thomas J. Taylor 897,630,502.00 99.67% 54.71%
SHARES VOTED "FOR"
WITHHELD AUTHORITY % OF VOTED % OF TOTAL
------------------ ------------ ----------
Emil J. Mikity 2,998,845.00 0.33% 0.18%
George H. Strong 2,992,394.00 0.33% 0.18%
Erin Anderson 2,974,491.00 0.33% 0.18%
Cheryl H. Wade 3,009,143.00 0.33% 0.18%
Thomas J. Taylor 2,993,072.00 0.33% 0.18%
PROPOSAL 2: To consider and vote upon a proposal to approve a new advisory
agreement between the Company, on behalf of each Fund, and CoreStates Investment
Advisers, Inc. ("CoreStates Advisers"), pursuant to which CoreStates Advisers
will act as investment adviser with respect to the assets of the Funds,
effective upon the merger of CoreStates Corp.
("CoreStates") and Meridian Bancorp, Inc. ("Meridian") (the "Merger").
SHORT-INTERMEDIATE BOND FUND
SHARES VOTED % OF VOTED % OF TOTAL
-------------- ------------ ----------
FOR 2,812,494.00 96.91% 48.69%
AGAINST 57,130.00 1.97% 0.99%
ABSTAIN 32,682.00 1.13% 0.57%
CASH RESERVE FUND
SHARES VOTED % OF VOTED % OF TOTAL
-------------- ------------ ----------
FOR 302,869,534.00 99.98% 51.28%
AGAINST 631,760.00 .21% .11%
ABSTAIN 2,501,075.00 .82% .42%
TREASURY RESERVE FUND
SHARES VOTED % OF VOTED % OF TOTAL
-------------- ------------ ----------
FOR 279,305,695.00 99.86% 50.22%
AGAINST 181,597.00 .6% .3%
ABSTAIN 206,812.00 .7% .4%
GROWTH EQUITY FUND
SHARES VOTED % OF VOTED % OF TOTAL
-------------- ------------ ----------
FOR 4,370,815.00 97.35% 50.83%
AGAINST 32,878.00 .73% .38%
ABSTAIN 85,945.00 1.91% .1%
105
<PAGE>
NOTES TO
FINANCIAL
STATEMENTS
(CONTINUED)
[] COREFUND
FOR THE YEAR
ENDED
JUNE 30, 1996
INTERMEDIATE BOND FUND
SHARES VOTED % OF VOTED % OF TOTAL
-------------- ------------ ----------
FOR 62,694.00 84.04% 49.96%
AGAINST 0.00 0.00% 0.00%
ABSTAIN 11,905.00 15.96% 9.49%
GOVERNMENT INCOME FUND
SHARES VOTED % OF VOTED % OF TOTAL
-------------- ------------ ----------
FOR 824,683.00 99.62% 55.41%
AGAINST 0.00 0.00% 0.00%
ABSTAIN 3,152.00 .38% .21%
TAX-FREE RESERVE FUND
SHARES VOTED % OF VOTED % OF TOTAL
-------------- ------------ ----------
FOR 33,136,439.00 99.71% 49.91%
AGAINST 97,294.00 .29% .15%
ABSTAIN 0.00 0.00% 0.00%
VALUE EQUITY FUND
SHARES VOTED % OF VOTED % OF TOTAL
-------------- ------------ ----------
FOR 2,010,658.00 99.92% 75.86%
AGAINST 65.00 0.00% 0.00%
ABSTAIN 1,501.00 .7% .6%
GLOBAL BOND FUND
SHARES VOTED % OF VOTED % OF TOTAL
-------------- ------------ ----------
FOR 3,279,675.00 100.00% 95.19%
AGAINST 0.00 0.00% 0.00%
ABSTAIN 0.00 0.00% 0.00%
EQUITY INDEX FUND
SHARES VOTED % OF VOTED % OF TOTAL
-------------- ------------ ----------
FOR 3,164,839.00 99.40% 59.23%
AGAINST 5,049.00 .16% .9%
ABSTAIN 14,111.00 .44% .26%
BALANCED FUND
SHARES VOTED % OF VOTED % OF TOTAL
-------------- ------------ ----------
FOR 3,134,366.00 96.20% 53.00%
AGAINST 24,641.00 .76% .42%
ABSTAIN 99,236.00 3.05% 1.68%
INTERNATIONAL GROWTH FUND
SHARES VOTED % OF VOTED % OF TOTAL
-------------- ------------ ----------
FOR 6,439,273.00 99.87% 71.92%
AGAINST 1,804.00 .3% .2%
ABSTAIN 6,466.00 .10% .7%
NJ MUNICIPAL FUND
SHARES VOTED % OF VOTED % OF TOTAL
-------------- ------------ ----------
FOR 83,788.00 100.00% 52.19%
AGAINST 0.00 0.00% 0.00%
ABSTAIN 0.00 0.00% 0.00%
106
<PAGE>
[] COREFUND
FIDUCIARY RESERVE FUND
SHARES VOTED % OF VOTED % OF TOTAL
-------------- ------------ ----------
FOR 195,289,296.00 99.85% 53.52%
AGAINST 50,476.00 .3% .1%
ABSTAIN 237,317.00 .12% .7%
FIDUCIARY TAX-FREE FUND
SHARES VOTED % OF VOTED % OF TOTAL
-------------- ------------ ----------
FOR 55,972,626.00 99.12% 73.01%
AGAINST 67,984.00 .12% .22%
ABSTAIN 428,845.00 .76% .56%
FIDUCIARY TREASURY FUND
SHARES VOTED % OF VOTED % OF TOTAL
-------------- ------------ ----------
FOR 15,216,211.00 100.00% 76.23%
AGAINST 0.00 0.00% 0.00%
ABSTAIN 0.00 0.00% 0.00%
PENNSYLVANIA MUNICIPAL BOND FUND
SHARES VOTED % OF VOTED % OF TOTAL
-------------- ------------ ----------
FOR 565,475.00 96.40% 58.19%
AGAINST 19,980.00 3.41% 2.06%
ABSTAIN 1,119.00 .19% .12%
PROPOSAL 3: To consider and vote upon a proposal to approve the selection of
Martin Currie, Inc. ("Martin Currie") or its successor as a Sub-Adviser for a
portion of the assets of the International Growth Fund.
INTERNATIONAL GROWTH FUND
SHARES VOTED % OF VOTED % OF TOTAL
-------------- ------------ ----------
FOR 6,434,497.00 99.80% 71.86%
AGAINST 6,500.00 .10% .7%
ABSTAIN 6,546.00 .10% .7%
PROPOSAL 4: To consider and vote upon a proposal to approve the selection of
Aberdeen Trust ("Aberdeen") or its successor as a Sub-Adviser for a portion of
the assets of the International Growth Fund.
INTERNATIONAL GROWTH FUND
SHARES VOTED % OF VOTED % OF TOTAL
-------------- ------------ ----------
FOR 6,438,013.00 99.85% 71.90%
AGAINST 3,576.00 .6% .4%
ABSTAIN 5,953.00 .9% .7%
PROPOSAL 5: To consider and vote upon a proposal to approve the selection of
Alpha Global Fixed Income Managers, Inc. ("Alpha Global") or its successor as a
Sub-Adviser to the Global Bond Fund.
GLOBAL BOND FUND
SHARES VOTED % OF VOTED % OF TOTAL
-------------- ------------ ----------
FOR 3,279,675.00 100.00% 95.19%
AGAINST 0.00 0.00% 0.00%
ABSTAIN 0.00 0.00% 0.00%
107
<PAGE>
NOTES TO
FINANCIAL
STATEMENTS
(CONTINUED)
FOR THE YEAR
ENDED
JUNE 30, 1996
PROPOSAL 6: To consider and vote upon a proposal to change the Global Bond Fund
from a "diversified" investment company to a "non-diversified" investment
company.
GLOBAL BOND FUND
SHARES VOTED % OF VOTED % OF TOTAL
-------------- ------------ ----------
FOR 3,279,675.00 100.00% 95.19%
AGAINST 0.00 0.00% 0.00%
ABSTAIN 0.00 0.00% 0.00%
PROPOSAL 7: To consider and vote upon a proposal to change the fundamental
policy of the Short-Intermediate Bond Fund so that the Fund maintains an average
weighted maturity of two to five years instead of the existing average weighted
maturity of three to ten years.
SHORT-INTERMEDIATE BOND FUND
SHARES VOTED % OF VOTED % OF TOTAL
-------------- ------------ ----------
FOR 2,370,056.00 97.90% 41.03%
AGAINST 36,158.00 1.49% .63%
ABSTAIN 14,715.00 .61% .25%
PROPOSAL 8: To consider and vote upon an amended investment advisory agreement
between CoreStates Advisers and each of the Fiduciary Treasury Reserve and
Fiduciary Tax-Free Reserve ("Fiduciary Funds") which would increase (absent any
fee waivers) the contractual advisory fee paid to CoreStates Advisers.
FIDUCIARY TREASURY FUND
SHARES VOTED % OF VOTED % OF TOTAL
-------------- ------------ ----------
FOR 15,216,211.00 100.00% 76.23%
AGAINST 0.00 0.00% 0.00%
ABSTAIN 0.00 0.00% 0.00%
FIDUCIARY TAX-FREE FUND
SHARES VOTED % OF VOTED % OF TOTAL
-------------- ------------ ----------
FOR 55,814,121.00 98.84% 72.80%
AGAINST 170,134.00 .30% .22%
ABSTAIN 485,200.00 .86% .63%
108
<PAGE>
[] COREFUND
(UNAUDITED)
FOR TAXPAYERS FILING ON A CALENDAR YEAR BASIS, THIS NOTICE IS FOR INFORMATIONAL
PURPOSES ONLY.
Dear CoreFund Shareholders:
For the fiscal year ended June 30, 1996, each portfolio is designating
long-term capital gains, qualifying dividends and exempt income with regard to
distributions paid during the year as follows:
<TABLE>
<CAPTION>
(A) (B)
LONG TERM ORDINARY (C) (E)
CAPITAL GAINS INCOME TOTAL (D) TAX (F)
DISTRIBUTIONS DISTRIBUTIONS DISTRIBUTIONS QUALIFYING EXEMPT FOREIGN
PORTFOLIO (TAX BASIS) (TAX BASIS) (TAX BASIS) DIVIDENDS1 INTEREST TAX CREDIT2
- --------- ------------- ------------- ------------- ---------- -------- -----------
<S> <C> <C> <C> <C> <C> <C>
Equity Index Fund ................... 47% 53% 100% 92% 0% 0%
Equity Fund ......................... 12% 88% 100% 30% 0% 0%
Growth Equity Fund .................. 75% 25% 100% 64% 0% 0%
Special Equity Fund ................. 5% 95% 100% 62% 0% 0%
International Growth Fund ........... 16% 84% 100% 0% 0% 9%(3)
Balanced Fund ....................... 24% 76% 100% 30% 0% 0%
Short Term Income Fund .............. 0% 100% 100% 0% 0% 0%
Short-Intermediate Bond Fund ........ 0% 100% 100% 0% 0% 0%
Government Income Fund .............. 0% 100% 100% 0% 0% 0%
Bond Fund ........................... 0% 100% 100% 0% 0% 0%
Global Bond Fund .................... 0% 100% 100% 0% 0% 0%
Intermediate Municipal Bond Fund .... 0% 100% 100% 0% 100% 0%
Pennsylvania Municipal Bond Fund .... 0% 100% 100% 0% 100% 0%
New Jersey Municipal Bond Fund ...... 7% 93% 100% 0% 100% 0%
Treasury Reserve .................... 0% 100% 100% 0% 0% 0%
Cash Reserve ........................ 0% 100% 100% 0% 0% 0%
Tax-Free Reserve .................... 0% 100% 100% 0% 100% 0%
Please consult your tax adviser for proper treatment of this information.
<FN>
- ----------
(1) QUALIFYING DIVIDENDS REPRESENT DIVIDENDS WHICH QUALIFY FOR THE CORPORATE
DIVIDENDS RECEIVED DEDUCTION.
(2) SEE ATTACHED NOTICE WHICH DETAILS THE PER SHARE AMOUNT OF FOREIGN TAXES PAID
BY COUNTRY AND THE PER SHARE AMOUNT OF EACH DIVIDEND THAT REPRESENTS INCOME
DERIVED FROM SOURCES WITHIN EACH COUNTRY.
(3) THIS AMOUNT REPRESENTS THE FOREIGN TAX CREDIT FOR CLASS Y. THE FOREIGN TAX
CREDIT FOR CLASS A IS 10%.
* ITEMS (A) AND (B) ARE BASED ON A PERCENTAGE OF THE PORTFOLIO'S TOTAL DISTRIBUTIONS.
** ITEMS (D), (E) AND (F) ARE BASED ON A PERCENTAGE OF ORDINARY INCOME DISTRIBUTIONS OF THE PORTFOLIO.
</FN>
</TABLE>
109
<PAGE>
NOTES TO
FINANCIAL
STATEMENTS
[] COREFUND
FOR THE YEAR
ENDED
JUNE 30, 1996
(UNAUDITED)
FOR TAXPAYERS FILING ON A CALENDAR YEAR BASIS, THIS NOTICE IS FOR INFORMATIONAL
PURPOSES ONLY.
The CoreFund International Growth Fund has made an election under Section
853 of the Internal Revenue Code to provide a foreign tax deduction or credit to
its shareholders for the fiscal year ended June 30, 1996. The information
provided below is pertinent to taxpayers who meet the following two criteria: 1)
file a U.S. Federal Income Tax Return on the basis of the fiscal year ended June
30, 1996, and 2) held shares of the Fund on the dividend record date of December
28, 1995.
The amount per share of income and foreign taxes paid to each country is
listed in the following schedule:
Class Y Class A
Gross Foreign Gross Foreign
Country Dividend Taxes Paid Dividend Taxes Paid
- -------- -------- ---------- -------- ----------
Argentina......... 0.0039 0.0000 0.0035 0.0000
Australia......... 0.0071 0.0005 0.0064 0.0005
Austria........... 0.0020 0.0002 0.0018 0.0002
Belgium........... 0.0027 0.0003 0.0024 0.0003
Brazil............ 0.0036 0.0002 0.0030 0.0002
Colombia.......... 0.0002 0.0000 0.0002 0.0000
Chile............. 0.0020 0.0002 0.0018 0.0002
Ecuador........... 0.0009 0.0000 0.0008 0.0000
France............ 0.0152 0.0000 0.0135 0.0000
Germany........... 0.0081 0.0005 0.0073 0.0005
Hong Kong......... 0.0272 0.0000 0.0242 0.0000
Ireland........... 0.0003 0.0000 0.0003 0.0000
Italy............. 0.0037 0.0007 0.0034 0.0007
Japan............. 0.0398 0.0047 0.0360 0.0047
Malaysia.......... 0.0040 0.0007 0.0036 0.0007
Mexico............ 0.0004 0.0000 0.0003 0.0000
Netherlands....... 0.0115 0.0010 0.0103 0.0010
Singapore......... 0.0115 0.0016 0.0104 0.0016
Spain............. 0.0084 0.0010 0.0076 0.0010
Sweden ........... 0.0042 0.0005 0.0037 0.0005
South Africa...... 0.0046 0.0004 0.0041 0.0004
Switzerland....... 0.0068 0.0008 0.0062 0.0008
Thailand.......... 0.0015 0.0001 0.0013 0.0001
United Kingdom.... 0.1013 0.0123 0.0912 0.0123
United States..... 0.0390 0.0000 0.0346 0.0000
------- ------- ------- -------
0.3099 0.0257 0.2779 0.0257
110
<PAGE>
SHAREHOLDER
NOTES
[] COREFUND
111
<PAGE>
SHAREHOLDER
NOTES
[] COREFUND
112
<PAGE>
THIS REPORT AND THE FINANCIAL STATEMENTS CONTAINED HEREIN ARE SUBMITTED FOR THE
GENERAL INFORMATION OF THE SHAREHOLDERS OF THE CORPORATION. THE REPORT IS NOT
AUTHORIZED FOR DISTRIBUTION TO PROSPECTIVE INVESTORS IN THE CORPORATION UNLESS
PRECEDED OR ACCOMPANIED BY AN EFFECTIVE PROSPECTUS. SHARES IN THE FUNDS ARE NOT
DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED OR ENDORSED BY, CORESTATES BANK, N.A.,
THE PARENT CORPORATION OF EACH FUND'S INVESTMENT ADVISER. SUCH SHARES ARE ALSO
NOT FEDERALLY INSURED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION, THE FEDERAL
RESERVE BOARD, OR ANY OTHER AGENCY. INVESTMENTS IN SHARES OF A MUTUAL FUND
INVOLVE RISK, INCLUDING THE POSSIBLE LOSS OF PRINCIPAL. CORESTATES BANK, N.A.
SERVES AS CUSTODIAN FOR THE FUNDS.
<PAGE>
COREFUNDS, INC.
DIRECTORS
EMIL J. MIKITY, CHAIRMAN
GEORGE H. STRONG
ERIN ANDERSON
THOMAS TAYLOR
CHERYL WADE
OFFICERS
DAVID G. LEE, PRESIDENT
JAMES W. JENNINGS, SECRETARY
INVESTMENT ADVISER
CORESTATES INVESTMENT ADVISERS, INC.
PHILADELPHIA, PA 19101
ADMINISTRATOR
SEI FUND RESOURCES
WAYNE, PA 19087
DISTRIBUTOR
SEIFINANCIAL SERVICES COMPANY
WAYNE, PA 19087
LEGAL COUNSEL
MORGAN, LEWIS &BOCKIUS
PHILADELPHIA, PA 19103
AUDITORS
ERNST & YOUNG, LLP
PHILADELPHIA, PA 19103
INVESTMENT ADVISER
[GRAPHIC OMITTED]
CORESTATES LOGO
[GRAPHIC OMITTED]
[GRAPHIC OMITTED]
[GRAPHIC OMITTED]
FOR MORE INFORMATION, CALL COREFUND AT 1-800-355-CORE (2673).
COR-F-044-04
<PAGE>
CoreFunds, Inc.
--------------
FIDUCIARY RESERVE
ANNUAL REPORT
June 30, 1996
<PAGE>
INVESTMENT ADVISER'S REPORT
COREFUND FIDUCIARY RESERVE
JUNE 30, 1996
The CoreFund Fiduciary Reserve Fund (Class Y) returned 5.62% for the one-year
period ended June 30, 1996. The Fund significantly outperformed its benchmark
index, the IBC Financial Data All Taxable Money Fund Average, which returned
5.16% for the same period.
The Fund's assets decreased by 5.45% during the period from $406.6 million on
June 30, 1995 to $384.4 million on June 30, 1996.
The average maturity of the Fund was adjusted quarterly in keeping with our view
of Fed policy and movement of interest rates. The Awm had changed from 35-45
days to 55-65 during the one-year period. the current maturity target for the
CoreFund Fiduciary is 45 to 50 days.
Portfolio structure continues to favor commercial paper as it offers the best
absolute value to the Fund. During periods when corporate supply has dried up,
U.S. Government agency discount notes have provided yield and at the same time
did not present diversification issues.
<PAGE>
STATEMENT OF NET ASSETS COREFUND FIDUCIARY MONEY MARKET FUNDS
- --------------------------------------------------------------------------------
June 30, 1996
PAR VALUE
FIDUCIARY RESERVE (000) (000)
- -------------------------------------------------------
COMMERCIAL PAPER - 82.9%
Abbott Laboratories
5.300%, 07/18/96 ......... $ 5,000 $ 4,987
Alcatel-Alsthom
5.190%, 07/05/96 ......... 10,000 9,994
Arco Coal Austrialia
5.280%, 07/22/96 ......... 4,900 4,885
Asset Securitization Cooperative
5.300%, 07/18/96 ......... 10,000 9,975
5.420%, 09/25/96 ......... 5,000 4,935
AT&T Capital
5.260%, 08/15/96 ......... 5,000 4,967
5.240%, 08/28/96 ......... 5,000 4,958
Banc One Funding
5.310%, 08/01/96 ......... 5,000 4,977
CAFCO
5.250%, 09/04/96 ......... 5,000 4,953
5.350%, 09/16/96 ......... 5,000 4,943
Canadian Bank of Commerce
5.300%, 07/11/96 ......... 10,000 9,985
Coca Cola
5.280%, 07/15/96 ......... 5,905 5,893
5.330%, 08/19/96 ......... 5,000 4,964
E.I. duPont de Nemours
5.260%, 08/05/96 ......... 4,450 4,427
5.350%, 08/08/96 ......... 5,000 4,972
5.330%, 08/12/96 ......... 5,000 4,969
Ford Motor Credit
5.250%, 08/28/96 ......... 10,000 9,915
5.420%, 10/25/96 ......... 5,000 4,913
Gannett
5.320%, 07/12/96 ......... 10,000 9,984
General Electric
5.320%, 09/09/96 ......... 10,000 9,896
Goldman Sachs
5.230%, 07/26/96 ......... 10,000 9,964
J.P. Morgan
5.300%, 07/09/96 ......... 10,000 9,988
Kellogg
5.250%, 07/17/96 ......... 2,125 2,120
Merrill Lynch
5.310%, 08/07/96 ......... 10,000 9,945
1
<PAGE>
STATEMENT OF NET ASSETS (CONTINUED) COREFUND FIDUCIARY MONEY MARKET FUNDS
- --------------------------------------------------------------------------------
June 30, 1996
PAR VALUE
FIDUCIARY RESERVE (000) (000)
- ---------------------------------------------------
Metropolitan Life Funding
5.270%, 07/19/96 ..... $ 5,000 $ 4,987
5.260%, 08/22/96 ..... 2,000 1,985
Mitsubishi International
5.330%, 08/30/96 ..... 5,000 4,956
National Rural Utility
5.270%, 07/29/96 ..... 4,900 4,880
New Center Asset Trust
5.600%, 07/01/96 ..... 9,000 9,000
Norwest Financial
5.320%, 07/08/96 ..... 10,000 9,990
Pitney Bowes Credit
5.350%, 09/13/96 ..... 10,000 9,890
Procter & Gamble
5.360%, 09/17/96 ..... 5,000 4,942
Province of Alberta
5.300%, 09/03/96 ..... 4,000 3,962
Province of British Columbia
5.370%, 11/29/96 ..... 10,000 9,775
Province of Quebec
5.400%, 09/09/96 ..... 10,000 9,895
5.420%, 09/16/96 ..... 4,000 3,954
Prudential Funding
5.250%, 07/01/96 ..... 5,000 5,000
Shell Oil
5.210%, 07/31/96 ..... 5,000 4,978
Siemens
5.300%, 08/15/96 ..... 5,000 4,967
Southwestern Bell Capital
5.270%, 07/22/96 ..... 5,000 4,985
5.270%, 08/14/96 ..... 5,000 4,968
Swedish Export Credit
5.270%, 08/26/96 ..... 5,000 4,959
5.380%, 12/03/96 ..... 5,000 4,884
Toyota Motor Credit
5.280%, 08/29/96 ..... 5,000 4,957
5.000%, 10/11/96 ..... 5,000 4,929
Toys "R" Us
5.320%, 07/23/96 ..... 3,000 2,990
Unilever Capital
5.260%, 07/16/96 ..... 10,000 9,978
5.250%, 08/23/96 ..... 5,000 4,961
2
<PAGE>
STATEMENT OF NET ASSETS (CONTINUED) COREFUND FIDUCIARY MONEY MARKET FUNDS
- --------------------------------------------------------------------------------
June 30, 1996
PAR VALUE
FIDUCIARY RESERVE (000) (000)
- ---------------------------------------------------------------
U.S. West Capital Funding
5.340%, 08/16/96 ............... $ 5,000 $ 4,966
Walt Disney
5.270%, 10/16/96 ............... 4,900 4,823
5.270%, 11/18/96 ............... 2,000 1,959
Weyerhauser
5.290%, 07/23/96 ............... 4,600 4,585
--------
TOTAL COMMERCIAL PAPER
(Cost $318,614) .............................. 318,614
- ---------------------------------------------------------------
U.S. GOVERNMENT AGENCY OBLIGATIONS - 10.4%
FNMA
4.820%, 08/09/96 ............... 10,000 9,948
4.811%, 07/10/96 ............... 10,000 9,988
5.310%, 12/11/96 ............... 10,000 9,994
4.780%, 02/14/97 ............... 10,000 9,992
--------
TOTAL U.S. GOVERNMENT
AGENCY OBLIGATIONS
(Cost $39,922) ............................... 39,922
- ---------------------------------------------------------------
U.S. TREASURY OBLIGATIONS - 3.1%
U.S. Treasury Bill(DAGGER)
5.341%, 03/06/97 ............... 10,000 9,651
U.S. Treasury STRIPS(DAGGER)
5.520%, 02/15/97 ............... 2,500 2,416
--------
TOTAL U.S. TREASURY OBLIGATIONS
(Cost $12,067) ............................... 12,067
- ---------------------------------------------------------------
CORPORATE OBLIGATIONS - 1.3%
American Express Centurion (A)
5.423%, 07/10/96 ............... 5,000 5,000
--------
TOTAL CORPORATE OBLIGATIONS
(Cost $5,000) ................................ 5,000
- ---------------------------------------------------------------
MASTER NOTES - 0.1%
Associates Corporation of North America
5.286%, 07/01/96 ............... 377 377
SLMA
5.290%, 07/01/96 ............... 13 13
--------
TOTAL MASTER NOTES
(Cost $390) .................................. 390
- ---------------------------------------------------------------
See accompanying notes to financial statements.
3
<PAGE>
STATEMENT OF NET ASSETS (CONCLUDED) COREFUND FIDUCIARY MONEY MARKET FUNDS
- --------------------------------------------------------------------------------
June 30, 1996
PAR VALUE
FIDUCIARY RESERVE (000) (000)
- ---------------------------------------------------------------
TIME DEPOSITS - 2.6%
Bank of Montreal
5.500%, 07/01/96 ............... $5,000 $ 5,000
Sumitomo Bank
5.688%, 07/01/96 ............... 5,000 5,000
-------
TOTAL TIME DEPOSITS
(Cost $10,000) ............................... 10,000
- ---------------------------------------------------------------
TOTAL INVESTMENTS - 100.4%
(Cost $385,993) ................................. 385,993
- ---------------------------------------------------------------
OTHER ASSETS AND LIABILITIES, NET - (0.4%).......... (1,547)
- ---------------------------------------------------------------
NET ASSETS:
Portfolio Shares ($0.001 par value -
750 million authorized) based on
384,445,563 outstanding shares ............... 384,446
- ---------------------------------------------------------------
TOTAL NET ASSETS - 100.0% .......................... $384,446
- ---------------------------------------------------------------
NET ASSET VALUE & REDEMPTION PRICE
PER SHARE ..................................... $ 1.00
(DAGGER) YIELD TO MATURITY
(A) VARIABLE RATE SECURITY - THE RATE REFLECTED ON THE STATEMENT OF NET ASSETS
IS THE RATE IN EFFECT ON JUNE 30, 1996.
FNMA -- FEDERAL NATIONAL MORTGAGE ASSOCIATION
SLMA -- STUDENT LOAN MARKETING ASSOCIATION
STRIPS -- SEPARATELY TRADED REGISTERED INTEREST AND PRINCIPAL SECURITIES
See accompanying notes to financial statements.
4
<PAGE>
STATEMENT OF OPERATIONS (000) COREFUND MONEY MARKET FUNDS
- --------------------------------------------------------------------------------
For the year ended June 30, 1996
FIDUCIARY RESERVE
- --------------------------------------------------------------------------------
INVESTMENT INCOME:
Interest .............................................. $ 22,228
--------
EXPENSES:
Investment advisory fees ................................. 1,892
Less investment advisory fees waived ..................... (1,892)
Administrative fees ...................................... 989
Less administrative fees waived .......................... (532)
Transfer agent fees & expenses ........................... 42
Professional fees ........................................ 31
Registration & filing fees ............................... 75
Printing ................................................. 15
Miscellaneous ............................................ (31)
--------
Total expenses ................................................. 589
--------
NET INVESTMENT INCOME .......................................... 21,639
--------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS ........... $ 21,639
========
See accompanying notes to financial tatements.
5
<PAGE>
STATEMENT OF CHANGES IN NET ASSETS (000) COREFUND MONEY MARKET FUNDS
- --------------------------------------------------------------------------------
For the years ended June 30
FIDUCIARY RESERVE
- --------------------------------------------------------------------------------
07/01/95 07/01/94
TO 06/31/96 TO 06/31/95
----------- -----------
OPERATIONS:
Net investment income ........................... $ 21,639 $ 21,503
Net realized loss on securities sold ............ -- (4)
--------- ---------
Net increase in net assets resulting
from operations .............................. 21,639 21,499
--------- ---------
DIVIDENDS DISTRIBUTED FROM:
Net investment income ........................... (21,639) (21,503)
--------- ---------
CAPITAL SHARE TRANSACTIONS:
Proceeds from shares issued ..................... 596,669 546,029
Cost of shares redeemed ......................... (618,820) (522,242)
--------- ---------
Increase (decrease) in net assets derived from
capital share transactions ................... (22,151) 23,783
--------- ---------
NET INCREASE (DECREASE) IN NET ASSETS: ................ (22,151) 23,783
NET ASSETS:
Beginning of period ............................. 406,597 382,814
--------- ---------
End of period ................................... $ 384,446 $ 406,597
========= =========
SHARES ISSUED AND REDEEMED:
Shares issued ................................... 596,669 546,029
Shares redeemed ................................. (618,820) (522,242)
--------- ---------
Increase (decrease) in net shares derived from
capital share transactions ................... (22,151) 23,787
--------- ---------
OUTSTANDING SHARES:
Beginning of period ............................. 406,597 382,810
--------- ---------
End of period ................................... 384,446 406,597
========= =========
See accompanying notes to financial statements.
6
<PAGE>
FINANCIAL HIGHLIGHTS COREFUND MONEY MARKET FUNDS
- --------------------------------------------------------------------------------
June 30, 1996
FIDUCIARY RESERVE
- --------------------------------------------------------------------------------
For a Share Outstanding Throughout the Period
<TABLE>
<CAPTION>
RATIO RATIO OF
NET NET NET RATIO OF EXPENSES NET INCOME
ASSET DISTRIBUTIONS ASSET ASSETS RATIO OF NET TO AVERAGE TO AVERAGE
VALUE NET FROM NET VALUE END OF OF EXPENSES INCOME NET ASSETS NET ASSETS
BEGINNING INVESTMENT INVESTMENT END OF TOTAL PERIOD TO AVERAGE TO AVERAGE (EXCLUDING (EXCLUDING
OF PERIOD INCOME INCOME PERIOD RETURN 000) NET ASSETS NET ASSETS WAIVERS) WAIVERS)
--------- ---------- ------------- ------ ------ ------ ----------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
For the year ended
June 30, 1996 $1.00 0.05 (0.05) $1.00 5.62% $384,446 0.15% 5.46% 0.76% 4.85%
For the year ended
June 30, 1995 $1.00 0.05 (0.05) $1.00 5.46%$ 406,597 0.17% 5.35% 0.81% 4.71%
For the year ended
June 30, 1994 $1.00 0.03 (0.03) $1.00 3.31% $382,814 0.16% 3.24% 0.84% 2.56%
For the year ended
June 30, 1993 $1.00 0.03 (0.03) $1.00 3.29% $424,363 0.17% 3.25% 0.81% 2.61%
For the year ended
June 30, 1992 $1.00 0.05 (0.05) $1.00 5.04% $416,945 0.18% 4.96% 0.83% 4.31%
For the year ended
June 30, 1991 $1.00 0.07 (0.07) $1.00 7.49% $453,947 0.15% 7.05% 0.80% 6.40%
For the period ended
June 30, 1990 (1) $1.00 0.08 (0.08) $1.00 8.03%* $232,091 0.13% 8.42% 0.83% 7.72%
<FN>
- ----------
* RETURN IS FOR THE PERIOD INDICATED AND HAS NOT BEEN ANNUALIZED.
(1) THE FIDUCIARY RESERVE COMMENCED OPERATIONS AUGUST 7, 1989.
RATIOS FOR THIS PERIOD HAVE BEEN ANNUALIZED.
</FN>
</TABLE>
See accompanying notes to financial statements.
7
<PAGE>
NOTES TO FINANCIAL STATEMENTS COREFUND MONEY MARKET FUNDS
- --------------------------------------------------------------------------------
June 30, 1996
1. ORGANIZATION
The CoreFund Fiduciary Reserve is a Fund offered by CoreFunds, Inc. (the
"Company"), an open-end investment company registered under the Investment
Company Act of 1940, as amended.
The Company is presently authorized to offer shares in the following Funds (the
"Funds"):
EQUITY FUNDS: MONEY MARKET FUNDS:
Growth Equity Fund Cash Reserve
Equity Fund Treasury Reserve
Equity Index Fund Tax-Free Reserve
International Growth Fund Fiduciary Reserve
Balanced Fund Fiduciary Treasury Reserve
Special Equity Fund Fiduciary Tax-Free Reserve
FIXED INCOME FUNDS:
Short-Term Income
Government Income Fund
Short-Intermediate Bond Fund
Intermediate Municipal Bond Fund
Bond Fund
Global Bond Fund
Pennsylvania Municipal Bond Fund
New Jersey Municipal Bond Fund
The financial statements included herein present only those of the Fiduciary
Reserve Fund. The financial statements of the remaining Funds are presented
separately. The assets of each Fund are segregated, and a shareholder's interest
is limited to the Fund in which shares are held. The Funds' prospectus provides
a description of the Funds' investment objectives, policies and strategies.
2. SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies followed by the
Fiduciary Reserve.
SECURITY VALUATION -- Investment securities of the Fiduciary Reserve Fund are
stated at amortized cost which approximates market value. Under this valuation
method, purchase discounts and premiums are accreted and amortized ratably to
maturity and are included in interest income.
8
<PAGE>
NOTES TO FINANCIAL STATEMENTS (CONTINUED) COREFUND MONEY MARKET FUNDS
- --------------------------------------------------------------------------------
June 30, 1996
SECURITY TRANSACTIONS AND INVESTMENT INCOME -- Security transactions are
accounted for on the trade date of the security purchase or sale. Costs 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 the purchase discounts and premiums during the respective
holding period. Interest income is recorded on the accrual basis.
EXPENSES -- Expenses that are directly related to a Fund are charged directly
to that Fund. Other operating expenses of the Company are prorated to the Fund
on the basis of relative net assets.
DISTRIBUTIONS TO SHAREHOLDERS -- Distributions from net investment income are
declared on a daily basis and are payable on the first business day of the
following month. Any net realized capital gains on sales of securities for a
Fund are distributed to its shareholders at least annually.
FEDERAL INCOME TAXES -- It is the Fund's intention to continue to qualify as a
regulated investment company and distribute all of its taxable income.
Accordingly, no provision for Federal income taxes is required.
3. INVESTMENT ADVISORY AND CUSTODIAL SERVICES
Pursuant to an investment advisory agreement dated August 12, 1996, investment
advisory services are provided to the Company by CoreStates Investment Advisers,
Inc. ("CoreStates Advisers"), a wholly-owned subsidiary of CoreStates Bank, N.A.
("CoreStates Bank"), itself a wholly-owned subsidiary of CoreStates Financial
Corp. Under the terms of suchyagreement, CoreStates Advisers is entitled to
receive an annual fee of 0.20% on the average net assets of the Fiduciary
Reserve Fund. Prior to August 12, 1996 CoreStates Advisers was entitled to
receive an annual fee of 0.50% on the average net assets of the Fiduciary
Reserve Fund. For the year ended June 30, 1996, CoreStates Advisers earned
$1,892,127 in investment advisory fees, all of which was voluntarily waived in
order to assist the Fund in maintaining a competitive expense ratio.
CoreStates Bank also serves as Custodian to the Company. No fees are being paid
to CoreStates Bank for such services.
4. ADMINISTRATIVE, DISTRIBUTION, AND TRANSFER AGENT SERVICES
Pursuant to an administration agreement dated October 30, 1992, as amended June
1, 1995, SEI Fund Resources ("SFR"), a wholly-owned subsidiary of SEI
Corporation, acts as the Fund's Administrator. Under the terms of such
agreement, SFR is entitled to receive an annual fee of 0.25% on the average
daily net assets of the Fiduciary Reserve Fund. Such a fee is computed daily and
paid monthly. For the year ended June 30, 1996, administrative fees totaled
$989,264 of which $532,139 was voluntarily waived in order to assist the Fund in
maintaining a competitive expense ratio.
9
<PAGE>
NOTES TO FINANCIAL STATEMENTS (CONTINUED) COREFUND MONEY MARKET FUNDS
- --------------------------------------------------------------------------------
June 30, 1996
Effective for the period July 1, 1995 to November 16, 1995, SEI Financial
Management Corporation acted as the Transfer Agent of the Fund. Pursuant to a
transfer agency agreement dated November 16, 1995, Boston Financial Data
Services ("BFDS") a subsidiary of State Street Bank and Trust Company acts as
the Fund's Transfer Agent. As such, BFDS provides transfer agency, dividend
disbursing, shareholder servicing and administrative services for the Fund.
On November 2, 1992, SEI Financial Services Company ("SFS"), also a wholly-owned
subsidiary of SEI Corporation, became the Fund's exclusive Distributor pursuant
to a distribution agreement dated October 30, 1992.
Certain officers of the Company are also officers of the Administrator. Such
officers are not paid fees by the Fund.
The Fund has paid legal fees to a law firm in which the secretary of the Company
is a partner.
SHAREHOLDER VOTING RESULTS (UNAUDITED):
There was a special meeting scheduled for April 9,1996 at which the shareholders
of the Cash Reserve, Treasury Reserve, Growth Equity Fund, Short-Intermediate
Bond Fund (formerly Intermediate Bond Fund), Government Income Fund,
Intermediate Municipal Bond Fund, Tax-Free Reserve, Value Equity Fund, Global
Bond Fund, Equity Index Fund, Balanced Fund, International Growth Fund, New
Jersey Municipal Bond Fund, Fiduciary Reserve, Fiduciary Tax Free Reserve,
Fiduciary Treasury Reserve, Elite Cash Reserve, Elite Government Reserve, and
Elite Treasury Reserve (the "Funds") voted on a series of proposals (the
"Proposals"). With respect to Proposal 2 relating to the Pennsylvania Municipal
Bond Fund meeting was adjourned until July 17, 1996. The proposals and the
results of the shareholder meeting are set forth as follows (unaudited).
PROPOSAL 1: To consider and act upon a proposal to elect a Board of Directors.
ELECTION OF DIRECTORS:
SHARES VOTED "FOR" % OF VOTED % OF TOTAL
Emil J. Mikity 897,624,729.00 99.67% 54.71%
George H. Strong 897,631,180.00 99.67% 54.71%
Erin Anderson 897,649,083.00 99.67% 54.71%
Cheryl H. Wade 897,614,431.00 99.67% 54.71%
Thomas J. Taylor 897,630,502.00 99.67% 54.71%
10
<PAGE>
COREFUND MONEY MARKET FUNDS
- --------------------------------------------------------------------------------
June 30, 1996
SHARES VOTED "FOR" % OF VOTED % OF TOTAL
WITHHELD AUTHORITY
Emil J. Mikity 2,998,845.00 0.33% 0.18%
George H. Strong 2,992,394.00 0.33% 0.18%
Erin Anderson 2,974,491.00 0.33% 0.18%
Cheryl H. Wade 3,009,143.00 0.33% 0.18%
Thomas J. Taylor 2,993,072.00 0.33% 0.18%
PROPOSAL 2: To consider and vote upon a proposal to approve a new advisory
agreement between the Company, on behalf of each Fund, and CoreStates Investment
Advisers, Inc. ("CoreStates Advisers"), pursuant to which CoreStates Advisers
will act as investment adviser with respect to the assets of the Funds,
effective upon the merger of CoreStates Corp.
("CoreStates") and Meridian Bancorp, Inc. ("Meridian") (the "Merger").
SHORT-INTERMEDIATE BOND FUND
SHARES VOTED % OF VOTED % OF TOTAL
FOR 2,812,494.00 96.91% 48.69%
AGAINST 57,130.00 1.97% 0.99%
ABSTAIN 32,682.00 1.13% 0.57%
CASH RESERVE FUND
SHARES VOTED % OF VOTED % OF TOTAL
FOR 302,869,534.00 99.98% 51.28%
AGAINST 631,760.00 0.21% 0.11%
ABSTAIN 2,501,075.00 0.82% 0.42%
TREASURY RESERVE FUND
SHARES VOTED % OF VOTED % OF TOTAL
FOR 279,305,695.00 99.86% 50.22%
AGAINST 181,597.00 0.6% 0.3%
ABSTAIN 206,812.00 0.7% 0.4%
GROWTH EQUITY FUND
SHARES VOTED % OF VOTED % OF TOTAL
FOR 4,370,815.00 97.35% 50.83%
AGAINST 32,878.00 0.73% 0.38%
ABSTAIN 85,945.00 1.91% 0.1%
11
<PAGE>
COREFUND MONEY MARKET FUNDS
- --------------------------------------------------------------------------------
June 30, 1995
INTERMEDIATE BOND FUND
SHARES VOTED % OF VOTED % OF TOTAL
FOR 62,694.00 84.04% 49.96%
AGAINST 0.00 0.00% 0.00%
ABSTAIN 11,905.00 15.96% 9.49%
GOVERNMENT INCOME FUND
SHARES VOTED % OF VOTED % OF TOTAL
FOR 824,683.00 99.62% 55.41%
AGAINST 0.00 0.00% 0.00%
ABSTAIN 3,152.00 0.38% 0.21%
TAX-FREE RESERVE FUND
SHARES VOTED % OF VOTED % OF TOTAL
FOR 3,136,439.00 99.71% 49.91%
AGAINST 97,294.00 0.29% 0.15%
ABSTAIN 0.00 0.00% 0.00%
VALUE EQUITY FUND
SHARES VOTED % OF VOTED % OF TOTAL
FOR 2,010,658.00 99.92% 75.86%
AGAINST 65.00 0.00% 0.00%
ABSTAIN 1,501.00 0.7% 0.6%
GLOBAL BOND FUND
SHARES VOTED % OF VOTED % OF TOTAL
FOR 3,279,675.00 100.00% 95.19%
AGAINST 0.00 0.00% 0.00%
ABSTAIN 0.00 0.00% 0.00%
EQUITY INDEX FUND
SHARES VOTED % OF VOTED % OF TOTAL
FOR 3,164,839.00 99.40% 59.23%
AGAINST 5,049.00 0.16% 0.9%
ABSTAIN 14,111.00 0.44% 0.26%
BALANCED FUND
SHARES VOTED % OF VOTED % OF TOTAL
FOR 3,134,366.00 96.20% 53.00%
AGAINST 24,641.00 0.76% 0.42%
ABSTAIN 99,236.00 3.05% 1.68%
12
<PAGE>
COREFUND MONEY MARKET FUNDS
- --------------------------------------------------------------------------------
June 30, 1995
INTERNATIONAL GROWTH FUND
SHARES VOTED % OF VOTED % OF TOTAL
FOR 6,439,273.00 99.87% 71.92%
AGAINST 1,804.00 0.3% 0.2%
ABSTAIN 6,466.00 0.10% 0.7%
NEW JERSEY MUNICIPAL FUND
SHARES VOTED % OF VOTED % OF TOTAL
FOR 83,788.00 100.00% 52.19%
AGAINST 0.00 0.00% 0.00%
ABSTAIN 0.00 0.00% 0.00%
FIDUCIARY RESERVE FUND
SHARES VOTED % OF VOTED % OF TOTAL
FOR 195,289,296.00 99.85% 53.52%
AGAINST 50,476.00 0.3% 0.1%
ABSTAIN 237,317.00 0.12% 0.7%
FIDUCIARY TAX-FREE FUND
SHARES VOTED % OF VOTED % OF TOTAL
FOR 55,972,626.00 99.12% 73.01%
AGAINST 67,984.00 0.12% 0.22%
ABSTAIN 428,845.00 0.76% 0.56%
FIDUCIARY TREASURY FUND
SHARES VOTED % OF VOTED % OF TOTAL
FOR 15,216,211.00 100.00% 76.23%
AGAINST 0.00 0.00% 0.00%
ABSTAIN 0.00 0.00% 0.00%
PENNSYLVANIA MUNICIPAL BOND FUND
SHARES VOTED % OF VOTED % OF TOTAL
FOR 565,475.00 96.40% 58.19%
AGAINST 19,980.00 3.41% 2.06%
ABSTAIN 1,119.00 0.19% 0.12%
13
<PAGE>
COREFUND MONEY MARKET FUNDS
- --------------------------------------------------------------------------------
June 30, 1995
PROPOSAL 3: To consider and vote upon a proposal to approve the selection of
Martin Currie, Inc. ("Martin Currie") or its successor as a Sub-Adviser for a
portion of the assets of the International Growth Fund.
INTERNATIONAL GROWTH FUND
SHARES VOTED % OF VOTED % OF TOTAL
FOR 6,434,497.00 99.80% 71.86%
AGAINST 6,500.00 0.10% 0.7%
ABSTAIN 6,546.00 0.10% 0.7%
PROPOSAL 4: To consider and vote upon a proposal to approve the selection of
Aberdeen Trust ("Aberdeen") or its successor as a Sub-Adviser for a portion of
the assets of the International Growth Fund.
INTERNATIONAL GROWTH FUND
SHARES VOTED % OF VOTED % OF TOTAL
FOR 6,438,013.00 99.85% 71.90%
AGAINST 3,576.00 0.6% 0.4%
ABSTAIN 5,953.00 0.9% 0.7%
PROPOSAL 5: To consider and vote upon a proposal to approve the selection of
Alpha Global Fixed Income Managers, Inc. ("Alpha Global") or its successor as a
Sub-Adviser to the Global Bond Fund.
GLOBAL BOND FUND
SHARES VOTED % OF VOTED % OF TOTAL
FOR 3,279,675.00 100.00% 95.19%
AGAINST 0.00 0.00% 0.00%
ABSTAIN 0.00 0.00% 0.00%
PROPOSAL 6: To consider and vote upon a proposal to change the Global Bond Fund
from a "diversified" investment company to a "non-diversified" investment
company.
GLOBAL BOND FUND
SHARES VOTED % OF VOTED % OF TOTAL
FOR 3,279,675.00 100.00% 95.19%
AGAINST 0.00 0.00% 0.00%
ABSTAIN 0.00 0.00% 0.00%
14
<PAGE>
COREFUND MONEY MARKET FUNDS
- --------------------------------------------------------------------------------
June 30, 1995
PROPOSAL 7: To consider and vote upon a proposal to change the fundamental
policy of the Short Intermediate Bond Fund so that the Fund maintains an average
weighted maturity of two to five years instead of the existing average weighted
maturity of three to ten years.
SHORT-INTERMEDIATE BOND FUND
SHARES VOTED % OF VOTED % OF TOTAL
FOR 2,370,056.00 97.90% 41.03%
AGAINST 36,158.00 1.49% 0.63%
ABSTAIN 14,715.00 0.61% 0.25%
PROPOSAL 8: To consider and vote upon an amended investment advisory agreement
between CoreStates Advisers and each of the Fiduciary Treasury Reserve and
Fiduciary Tax-Free Reserve ("Fiduciary Funds") which would increase (absent any
fee waivers) the contractual advisory fee paid to CoreStates Advisers.
FIDUCIARY TREASURY FUND
SHARES VOTED % OF VOTED % OF TOTAL
FOR 15,216,211.00 100.00% 76.23%
AGAINST 0.00 0.00% 0.00%
ABSTAIN 0.00 0.00% 0.00%
FIDUCIARY TAX-FREE FUND
SHARES VOTED % OF VOTED % OF TOTAL
FOR 55,814,121.00 98.84% 72.80%
AGAINST 170,134.00 0.30% 0.22%
ABSTAIN 485,200.00 0.86% 0.63%
15
<PAGE>
NOTICE TO SHAREHOLDERS OF COREFUNDS
(UNAUDITED)
For taxpayers filing on a calendar year basis, this notice is for
informational purposes only.
Dear CoreFund Shareholders:
For the fiscal year ended June 30, 1996, the Fiduciary Reserve Fund is
designating long-term capital gains, qualifying dividends and exempt income with
regard to distributions paid during the year as follows:
<TABLE>
<CAPTION>
(A) (B)
LONG TERM ORDINARY (C) (E)
CAPITAL GAINS INCOME TOTAL (D) TAX (F)
DISTRIBUTIONS DISTRIBUTIONS DISTRIBUTIONS QUALIFYING EXEMPT FOREIGN
PORTFOLIO (TAX BASIS) (TAX BASIS) (TAX BASIS) DIVIDENDS (1) INTEREST TAX CREDIT(2)
------------ ------------- ------------- ------------- ------------- -------- -------------
<S> <C> <C> <C> <C> <C> <C>
Fiduciary Reserve 0% 100% 100% 0% 0% 0%
<FN>
(1)QUALIFYING DIVIDENDS REPRESENT DIVIDENDS WHICH QUALIFY FOR THE CORPORATE RECEIVED DEDUCTION.
* ITEMS (A) AND (B) ARE BASED ON A PERCENTAGE OF THE FUNDS' TOTAL DISTRIBUTION.
** ITEMS (D), (E) AND (F) ARE BASED ON A PERCENTAGE OF ORDINARY INCOME DISTRIBUTIONS OF THE PORTFOLIO.
</FN>
</TABLE>
Please consult your tax department for proper treatment of this information.
16
<PAGE>
REPORT OF INDEPENDENT AUDITORS
Board of Directors and Shareholders
CoreFunds, Inc.
We have audited the accompanying statement of net assets of the CoreFund
Fiduciary Reserve of CoreFunds, Inc. (the "Fund") as of June 30, 1996, and the
related statement of operations for the year then ended, and the statements of
changes in net assets and the financial highlights for each of the years
presented therein. These financial statements and financial highlights are the
responsibility of the Fund's management. Our responsibility is to express an
opinion on these financial statements and financial highlights based on our
audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements and financial highlights are
free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements. Our
procedures included verification by examination of securities held by the
Custodian as of June 30, 1996 and confirmation of securities not held by the
Custodian by correspondence with others. An audit also includes assessing the
accounting principles used and significant estimates made by management, as well
as evaluating the overall financial statement presentation. We believe that our
audit provides a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of the
CoreFund Fiduciary Reserve of CoreFunds, Inc. at June 30, 1996, the results of
its operations for the year then ended, the changes in its net assets and the
financial highlights for each of the years presented therein, in conformity with
generally accepted accounting principles.
Philadelphia, Pennsylvania
August 16, 1996
17
<PAGE>
This report and the financial statements contained herein are submitted for the
general information of the shareholders of the Corporation. The report is not
authorized for distribution to prospective investors in the Corporation unless
preceded or accompanied by an effective prospectus. Shares in the Fund are not
deposits or obligations of, or guaranteed or endorsed by, CoreStates Bank, N.A.,
the parent corporation of the Fund's investment adviser. Such shares are also
not federally insured by the Federal Deposit Insurance Corporation, the Federal
Reserve Board or any other agency.
COR-F-056-01
<PAGE>
CoreFunds,Inc.
--------------
FIDUCIARY TREASURY RESERVE
ANNUAL REPORT
June 30, 1996
<PAGE>
INVESTMENT ADVISER'S REPORT
COREFUND FIDUCIARY TREASURY RESERVE
JUNE 30, 1996
The CoreFund Fiduciary Treasury Reserve returned 5.54% net of expenses for the
one-year period ended June 30, 1996. The Fund's assets increased in size by
33.1% during the period from $18,396,000 on June 30, 1995 to $24,498,000 on June
30, 1996. The average weighted maturity of the Fund increased from 49 to 58 days
during the one-year period. Although the asset size of the Fund increased by
$1.6 million, the average maturity also increased. The 11 day increase in
average maturity was due to the purchase of treasury securities in the 6 month
to 1 year areas. The FED decreased short-term interest rates by 75 basis points
during the period and the portfolio was extended to guard against further FED
easing.
As of this writing the money market has factored in a 25 basis point increase in
short-term rates. Recent economic data has been stronger than expected and the
market consensus is for the FED to move rates at their next FOMC meeting (August
20th). Although the average maturity of the Fund will be lowered to the 45 to 50
day area, purchases will be made on market weakness until there is clear
direction on the FED's next move.
<PAGE>
STATEMENT OF NET ASSETS COREFUND FIDUCIARY MONEY MARKET FUNDS
- --------------------------------------------------------------------------------
June 30, 1996
PAR VALUE
FIDUCIARY TREASURY RESERVE (000) (000)
- ---------------------------------------------------------------------------
U.S. TREASURY OBLIGATIONS - 38.8%
U.S. Treasury Bills(DAGGER)
5.120%, 09/19/96 ........................ $ 500 $ 494
5.130%, 09/26/96 ........................ 500 494
5.150%, 10/10/96 ........................ 300 296
5.060%, 10/17/96 ........................ 500 493
5.170%, 10/24/96 ........................ 500 492
5.230%, 10/31/96 ........................ 500 491
5.220%, 11/07/96 ........................ 500 491
5.370%, 11/14/96 ........................ 500 490
5.230%, 11/21/96 ........................ 500 490
5.460%, 12/05/96 ........................ 500 488
5.270%, 12/12/96 ........................ 500 488
5.380%, 12/19/96 ........................ 500 488
5.360%, 12/26/96 ........................ 500 487
5.290%, 01/09/97 ........................ 500 487
5.340%, 02/06/97 ........................ 200 194
5.650%, 04/03/97 ........................ 500 479
U.S. Treasury STRIPS(DAGGER)
5.230%, 08/15/96 ........................ 700 696
5.300%, 11/15/96 ........................ 1,000 980
5.640%, 05/15/97 ........................ 500 476
------
TOTAL U.S. TREASURY OBLIGATIONS
(Cost $9,494) ........................................... 9,494
- ---------------------------------------------------------------------------
REPURCHASE AGREEMENTS - 61.7%
Aubrey Lanston 5.40%,dated 06/28/96, matures
07/01/96, repurchase price $800,360
(collateralized by U.S. Treasury Note, par
value $820,000, 5.375%, matures 11/30/97;
market value $818,473) ..................... 800 800
First National Bank of Chicago 5.40%, dated
06/28/96, matures 07/01/96, repurchase
price $800,360 (collateralized by U.S.
Treasury Note, par value $790,000,
6.50%, matures 08/15/97; market
value $814,120) ............................ 800 800
Goldman Sachs 5.42%, dated 06/28/96, matures
07/01/96, repurchase price $5,502,484
(collateralized by U.S. Treasury Note, par
value $4,485,000, 10.75%, matures 02/15/03;
market value $5,651,197) ................... 5,500 5,500
1
<PAGE>
STATEMENT OF NET ASSETS (CONCLUDED) COREFUND FIDUCIARY MONEY MARKET FUNDS
- --------------------------------------------------------------------------------
June 30, 1996
PAR VALUE
FIDUCIARY TREASURY RESERVE (000) (000)
- --------------------------------------------------------------------------
Hong Kong Shanghai Bank 5.42%, dated 06/28/96,
matures 07/01/96, repurchase price $300,136
(collateralized by U.S. Treasury Note, par
value $300,000, 5.25%, matures 12/31/97;
market value $304,592) ......................... $ 300 $ 300
Hong Kong Shanghai Bank 5.25%, dated 06/28/96,
matures 07/01/96, repurchase price $629,275
(collateralized by U.S. Treasury Note, par
value $645,000, 6.25%, matures 04/30/01;
market value $645,577) ......................... 629 629
Morgan Stanley 5.30%, dated 06/28/96, matures
07/01/96, repurchase price $800,353
(collateralized by U.S. Treasury Note, par
value $745,000, 9.25%, matures 08/15/98;
market value $815,608) ......................... 800 800
Sanwa Bank 5.40%, dated 06/28/96, matures
07/01/96, repurchase price $800,360
(collateralized by U.S. Treasury Note, par
value $795,000, 5.875%, matures 07/31/97;
market value $814,359) ......................... 800 800
Swiss Bank 5.45%, dated 06/28/96, matures
07/01/96, repurchase price $5,502,498
(collateralized by U.S. Treasury Note, par
value $5,540,000, 6.50%, matures 05/15/97;
market value $5,619,662) ....................... 5,500 5,500
-------
TOTAL REPURCHASE AGREEMENTS
(Cost $15,129) .......................................... 15,129
- --------------------------------------------------------------------------
TOTAL INVESTMENTS - 100.5%
(Cost $24,623) ............................................. 24,623
- --------------------------------------------------------------------------
OTHER ASSETS AND LIABILITIES, NET - (0.5%) .................... (125)
- --------------------------------------------------------------------------
NET ASSETS:
Portfolio Shares ($0.001 par value - 250 million
authorized) based on 24,498,083 outstanding shares ...... 24,498
- --------------------------------------------------------------------------
TOTAL NET ASSETS - 100.0% ..................................... $24,498
- --------------------------------------------------------------------------
NET ASSET VALUE, OFFERING & REDEMPTION PRICE PER SHARE ........ $ 1.00
- --------------------------------------------------------------------------
STRIPS -- SEPARATELY TRADED REGISTERED INTEREST AND PRINCIPAL OF SECURITIES
(DAGGER) YIELD TO MATURITY
See accompanying notes to financial statements.
2
<PAGE>
STATEMENT OF OPERATIONS (000) COREFUND FIDUCIARY MONEY MARKET FUNDS
- --------------------------------------------------------------------------------
For the year ended June 30, 1996
FIDUCIARY TREASURY RESERVE
- -------------------------------------------------------------------------------
INVESTMENT INCOME:
Interest .......................................... $1,152
------
EXPENSES:
Investment advisory fees ............................. 97
Less investment advisory fees waived ................. (97)
Administrative fees .................................. 52
Less administrative fees waived ...................... (28)
Transfer agent fees & expenses ....................... 4
Professional fees .................................... 4
Registration & filing fees ........................... 2
Printing ............................................. 8
Miscellaneous ........................................ (2)
------
Total expenses ............................................. 40
------
NET INVESTMENT INCOME ...................................... 1,112
NET REALIZED LOSS ON INVESTMENTS:
Net realized loss from securities sold ............... (1)
------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS ....... $1,111
======
See accompanying notes to financial statements.
3
<PAGE>
STATEMENT OF CHANGES IN NET ASSETS (000) COREFUND FIDUCIARY MONEY MARKET FUNDS
- --------------------------------------------------------------------------------
For the years ended June 30
FIDUCIARY TREASURY RESERVE
- --------------------------------------------------------------------------------
07/01/95 07/01/94
TO 06/30/96 TO 06/30/95
----------- -----------
OPERATIONS:
Net investment income .......................... $ 1,112 $ 1,111
Net realized gain (loss) on securities sold .... (1) 1
-------- --------
Net increase in net assets resulting
from operations ............................. 1,111 1,112
-------- --------
DIVIDENDS DISTRIBUTED FROM:
Net investment income .......................... (1,112) (1,111)
Net realized gains ............................. -- --
-------- --------
Total dividends distributed .................... (1,112) (1,111)
-------- --------
CAPITAL SHARE TRANSACTIONS:
Proceeds from shares issued .................... 26,668 25,716
Cost of shares redeemed ........................ (20,565) (27,684)
-------- --------
Increase (decrease) in net assets derived
from capital share transactions ............. 6,103 (1,968)
-------- --------
NET INCREASE (DECREASE) IN NET ASSETS ................ 6,102 (1,967)
NET ASSETS:
Beginning of period ............................ 18,396 20,363
-------- --------
End of period .................................. $ 24,498 $ 18,396
======== ========
SHARES ISSUED AND REDEEMED:
Shares issued .................................. 26,668 25,716
Shares redeemed ................................ (20,565) (27,684)
-------- --------
Increase (decrease) in net shares derived
from capital share transactions ............. 6,103 (1,968)
-------- --------
OUTSTANDING SHARES:
Beginning of period ............................ 18,395 20,363
-------- --------
End of period .................................. 24,498 18,395
======== ========
See accompanying notes to financial statements.
4
<PAGE>
FINANCIAL HIGHLIGHTS COREFUND FIDUCIARY MONEY MARKET FUNDS
- --------------------------------------------------------------------------------
June 30, 1996
FIDUCIARY TREASURY RESERVE
- --------------------------------------------------------------------------------
For a Share Outstanding Throughout the Period
<TABLE>
<CAPTION>
RATIO RATIO OF
NET NET NET RATIO OF EXPENSES NET INCOME
ASSET DISTRIBUTIONS ASSET ASSETS RATIO OF NET TO AVERAGE TO AVERAGE
VALUE NET FROM NET VALUE END OF OF EXPENSES INCOME NET ASSETS NET ASSETS
BEGINNING INVESTMENT INVESTMENT END OF TOTAL PERIOD TO AVERAGE TO AVERAGE (EXCLUDING (EXCLUDING
OF PERIOD INCOME INCOME PERIOD RETURN (000) NET ASSETS NET ASSETS WAIVERS) WAIVERS)
--------- ---------- ------------- ------ ------ ------ ----------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
For the year ended
June 30, 1996 $1.00 0.05 (0.05) $1.00 5.54% $24,498 0.19% 5.39% 0.80% 4.78%
For the year ended
June 30, 1995 $1.00 0.05 (0.05) $1.00 5.24% $18,396 0.23% 5.09% 0.87% 4.45%
For the year ended
June 30, 1994 $1.00 0.03 (0.03) $1.00 3.10% $20,363 0.28% 3.03% 0.91% 2.40%
For the year ended
June 30, 1993 $1.00 0.03 (0.03) $1.00 3.17% $27,614 0.18% 3.19% 0.85% 2.52%
For the period ended
June 30, 1992 (1) $1.00 0.02 (0.02) $1.00 2.00%* $49,328 0.05% 3.95% 0.80% 3.20%
<FN>
- ----------
* RETURN IS FOR THE PERIOD INDICATED AND HAS NOT BEEN ANNUALIZED.
(1) THE FIDUCIARY TREASURY RESERVE COMMENCED OPERATIONS ON DECEMBER 10, 1991.
RATIOS FOR THIS PERIOD HAVE BEEN ANNUALIZED.
</FN>
</TABLE>
See accompanying notes to financial statements.
5
<PAGE>
NOTES TO FINANCIAL STATEMENTS COREFUND FIDUCIARY MONEY MARKET FUNDS
- --------------------------------------------------------------------------------
June 30, 1996
1. ORGANIZATION
The CoreFund Fiduciary Treasury Reserve is a Fund offered by CoreFunds, Inc.
(the "Company"), an open-end investment company registered under the Investment
Company Act of 1940, as amended.
The Company is presently authorized to offer shares in the following Funds (the
"Funds"):
EQUITY FUNDS: MONEY MARKET FUNDS:
Growth Equity Fund Cash Reserve
Equity Fund Treasury Reserve
Equity Index Fund Tax-Free Reserve
International Growth Fund Fiduciary Reserve
Balanced Fund Fiduciary Treasury Reserve
Special Equity Fund Fiduciary Tax-Free Reserve
FIXED INCOME FUNDS:
Short Term Income Fund
Government Income Fund
Short-Intermediate Bond Fund
Intermediate Municipal Bond Fund
Bond Fund
Global Bond Fund
Pennsylvania Municipal Bond Fund
New Jersey Municipal Bond Fund
The financial statements included herein present only those of the Fiduciary
Treasury Reserve Fund. The financial statements of the remaining Funds are
presented separately. The assets of each Fund are segregated, and a
shareholder's interest is limited to the Fund in which shares are held. The
Funds' prospectus provides a description of the Funds' investment objectives,
policies and strategies.
2. SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies followed by the
Fiduciary Treasury Reserve Fund.
SECURITY VALUATION -- Investment securities of the Fiduciary Treasury Reserve
Fund are stated at amortized cost which approximates market value. Under this
valuation method, purchase discounts and premiums are accreted and amortized
ratably to maturity and are included in interest income.
6
<PAGE>
NOTES TO FINANCIAL STATEMENTS (CONTINUE COREFUND FIDUCIARY MONEY MARKET FUNDS
- --------------------------------------------------------------------------------
June 30, 1996
SECURITY TRANSACTIONS AND INVESTMENT INCOME -- Security transactions are
accounted for on the trade date of the security purchase or sale. Costs 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 the purchase discounts and premiums during the respective
holding period. Interest income is recorded on the accrual basis.
REPURCHASE AGREEMENTS -- Securities pledged as collateral for Repurchase
Agreements are held by each Fund's custodian bank until maturity of the
Repurchase Agreements. Provisions of the Agreements and procedures adopted by
the Adviser ensure that the market value of the collateral, including accrued
interest thereon, is sufficient in the event of default by the counterparty. If
the counterparty defaults and the value of the collateral declines or if the
counterparty enters into insolvency proceedings, realization of the collateral
by the Fund may be delayed or limited.
EXPENSES -- Expenses that are directly related to the Fund are charged directly
to that Fund. Other operating expenses of the Company are prorated to the Fund
on the basis of relative net assets.
DISTRIBUTIONS TO SHAREHOLDERS -- Distributions from net investment income are
declared on a daily basis and are payable on the first business day of the
following month. Any net realized capital gains on sales of securities for a
Fund are distributed to its shareholders at least annually.
FEDERAL INCOME TAXES -- It is the Fund's intention to continue to qualify as a
regulated investment company and distribute all of its taxable income.
Accordingly, no provision for Federal income taxes is required.
3. INVESTMENT ADVISORY AND CUSTODIAL SERVICES
Pursuant to an investment advisory agreement dated August 12, 1996, investment
advisory services are provided to the Company by CoreStates Investment Advisers,
Inc. ("CoreStates Advisers"), a wholly-owned subsidiary of CoreStates Bank, N.A.
("CoreStates Bank"), itself a wholly-owned subsidiary of CoreStates Financial
Corp. Under the terms of such agreement, CoreStates Advisers is entitled to
receive an annual fee of 0.20% on the average net assets of the Fiduciary
Treasury Reserve Fund. Prior to August 12, 1996, CoreStates Advisers were
entitled to receive an annual fee of 0.50% on the average net assets of the
Fiduciary Treasury Reserve Fund. For the year ended June 30, 1996, CoreStates
Advisers earned $96,785 in investment advisory fees, all of which was
voluntarily waived in order to assist the Fund in maintaining a competitive
expense ratio.
CoreStates Bank also serves as Custodian to the Company. No fees are being paid
to CoreStates Bank for such services.
7
<PAGE>
NOTES TO FINANCIAL STATEMENTS (CONTINUED) COREFUND FIDUCIARY MONEY MARKET FUNDS
- --------------------------------------------------------------------------------
June 30, 1996
4. ADMINISTRATIVE, DISTRIBUTION, AND TRANSFER AGENT SERVICES
Pursuant to an administration agreement dated October 30, 1992, as amended June
1, 1995, SEI Fund Resources ("SFR"), a wholly-owned subsidiary of SEI
Corporation, acts as the Fund's Administrator. Under the terms of such
agreement, SFR is entitled to receive an annual fee of 0.25% on the average
daily net assets of the Fiduciary Treasury Reserve Portfolio. Such a fee is
computed daily and paid monthly. For the year ended June 30, 1996,
administrative fees totaled $51,550 of which $28,627 was voluntarily waived in
order to assist the Fund in maintaining a competitive expense ratio.
Effective for the period July 1, 1995 to November 16, 1995, SEI Financial
Management Corporation acted as the Transfer Agent of the Fund. Pursuant to a
transfer agency agreement dated November 16, 1995, Boston Financial Data
Services ("BFDS") a subsidiary of State Street Bank and Trust Company acts as
the Fund's Transfer Agent. As such, BFDS provides transfer agency, dividend
disbursing, and shareholder servicing for the Fund.
On November 2, 1992, SEI Financial Services Company ("SFS"), also a wholly-owned
subsidiary of SEI Corporation, became the Fund's exclusive Distributor pursuant
to a distribution agreement dated October 30, 1992.
Certain officers of the Company are also officers of the Administrator. Such
officers are not paid fees by the Fund.
The Fund has paid legal fees to a law firm in which the secretary of the Company
is a partner.
SHAREHOLDER VOTING RESULTS (UNAUDITED):
There was a special meeting scheduled for April 9,1996 at which the shareholders
of the Cash Reserve, Treasury Reserve, Growth Equity Fund, Short-Intermediate
Bond Fund (formerly Intermediate Bond Fund), Government Income Fund,
Intermediate Municipal Bond Fund, Tax-Free Reserve, Value Equity Fund, Global
Bond Fund, Equity Index Fund, Balanced Fund, International Growth Fund, New
Jersey Municipal Bond Fund, Fiduciary Reserve, Fiduciary Tax Free Reserve,
Fiduciary Treasury Reserve, Elite Cash Reserve, Elite Government Reserve, and
Elite Treasury Reserve (the "Funds") voted on a series of proposals (the
"Proposals"). With respect to Proposal 2 relating to the Pennsylvania Municipal
Bond Fund meeting was adjourned until July 17, 1996. The proposals and the
results of the shareholder meeting are set forth as follows (unaudited).
8
<PAGE>
COREFUND MONEY MARKET FUNDS
- --------------------------------------------------------------------------------
June 30, 1996
PROPOSAL 1: To consider and act upon a proposal to elect a Board of Directors.
ELECTION OF DIRECTORS:
SHARES VOTED "FOR" % OF VOTED % OF TOTAL
Emil J. Mikity 897,624,729.00 99.67% 54.71%
George H. Strong 897,631,180.00 99.67% 54.71%
Erin Anderson 897,649,083.00 99.67% 54.71%
Cheryl H. Wade 897,614,431.00 99.67% 54.71%
Thomas J. Taylor 897,630,502.00 99.67% 54.71%
SHARES VOTED "FOR" % OF VOTED % OF TOTAL
WITHHELD AUTHORITY
Emil J. Mikity 2,998,845.00 0.33% 0.18%
George H. Strong 2,992,394.00 0.33% 0.18%
Erin Anderson 2,974,491.00 0.33% 0.18%
Cheryl H. Wade 3,009,143.00 0.33% 0.18%
Thomas J. Taylor 2,993,072.00 0.33% 0.18%
PROPOSAL 2: To consider and vote upon a proposal to approve a new advisory
agreement between the Company, on behalf of each Fund, and CoreStates Investment
Advisers, Inc. ("CoreStates Advisers"), pursuant to which CoreStates Advisers
will act as investment adviser with respect to the assets of the Funds,
effective upon the merger of CoreStates Corp.
("CoreStates") and Meridian Bancorp, Inc. ("Meridian") (the "Merger").
SHORT INTERMEDIATE BOND FUND
SHARES VOTED % OF VOTED % OF TOTAL
FOR 2,812,494.00 96.91% 48.69%
AGAINST 57,130.00 1.97% 0.99%
ABSTAIN 32,682.00 1.13% 0.57%
CASH RESERVE FUND
SHARES VOTED % OF VOTED % OF TOTAL
FOR 302,869,534.00 99.98% 51.28%
AGAINST 631,760.00 0.21% 0.11%
ABSTAIN 2,501,075.00 0.82% 0.42%
9
<PAGE>
COREFUND MONEY MARKET FUNDS
- --------------------------------------------------------------------------------
June 30, 1996
TREASURY RESERVE FUND
SHARES VOTED % OF VOTED % OF TOTAL
FOR 279,305,695.00 99.86% 50.22%
AGAINST 181,597.00 0.6% 0.3%
ABSTAIN 206,812.00 0.7% 0.4%
GROWTH EQUITY FUND
SHARES VOTED % OF VOTED % OF TOTAL
FOR 4,370,815.00 97.35% 50.83%
AGAINST 32,878.00 0.73% 0.38%
ABSTAIN 85,945.00 1.91% 0.1%
INTERMEDIATE BOND FUND
SHARES VOTED % OF VOTED % OF TOTAL
FOR 62,694.00 84.04% 49.96%
AGAINST 0.00 0.00% 0.00%
ABSTAIN 11,905.00 15.96% 9.49%
GOVERNMENT INCOME FUND
SHARES VOTED % OF VOTED % OF TOTAL
FOR 824,683.00 99.62% 55.41%
AGAINST 0.00 0.00% 0.00%
ABSTAIN 3,152.00 0.38% 0.21%
TAX-FREE RESERVE FUND
SHARES VOTED % OF VOTED % OF TOTAL
FOR 33,136,439.00 99.71% 49.91%
AGAINST 97,294.00 0.29% 0.15%
ABSTAIN 0.00 0.00% 0.00%
VALUE EQUITY FUND
SHARES VOTED % OF VOTED % OF TOTAL
FOR 2,010,658.00 99.92% 75.86%
AGAINST 65.00 0.00% 0.00%
ABSTAIN 1,501.00 0.7% 0.6%
GLOBAL BOND FUND
SHARES VOTED % OF VOTED % OF TOTAL
FOR 3,279,675.00 100.00% 95.19%
AGAINST 0.00 0.00% 0.00%
ABSTAIN 0.00 0.00% 0.00%
10
<PAGE>
COREFUND MONEY MARKET FUNDS
- --------------------------------------------------------------------------------
June 30, 1996
EQUITY INDEX FUND
SHARES VOTED % OF VOTED % OF TOTAL
FOR 3,164,839.00 99.40% 59.23%
AGAINST 5,049.00 0.16% 0.9%
ABSTAIN 14,111.00 0.44% 0.26%
BALANCED FUND
SHARES VOTED % OF VOTED % OF TOTAL
FOR 3,134,366.00 96.20% 53.00%
AGAINST 24,641.00 0.76% 0.42%
ABSTAIN 99,236.00 3.05% 1.68%
INTERNATIONAL GROWTH FUND
SHARES VOTED % OF VOTED % OF TOTAL
FOR 6,439,273.00 99.87% 71.92%
AGAINST 1,804.00 0.3% 0.2%
ABSTAIN 6,466.00 0.10% 0.7%
NEW JERSEY MUNICIPAL FUND
SHARES VOTED % OF VOTED % OF TOTAL
FOR 83,788.00 100.00% 52.19%
AGAINST 0.00 0.00% 0.00%
ABSTAIN 0.00 0.00% 0.00%
FIDUCIARY RESERVE FUND
SHARES VOTED % OF VOTED % OF TOTAL
FOR 195,289,296.00 99.85% 53.52%
AGAINST 50,476.00 0.3% 0.1%
ABSTAIN 237,317.00 0.12% 0.7%
FIDUCIARY TAX-FREE FUND
SHARES VOTED % OF VOTED % OF TOTAL
FOR 55,972,626.00 99.12% 73.01%
AGAINST 67,984.00 0.12% 0.22%
ABSTAIN 428,845.00 0.76% 0.56%
FIDUCIARY TREASURY FUND
SHARES VOTED % OF VOTED % OF TOTAL
FOR 15,216,211.00 100.00% 76.23%
AGAINST 0.00 0.00% 0.00%
ABSTAIN 0.00 0.00% 0.00%
11
<PAGE>
COREFUND MONEY MARKET FUNDS
- --------------------------------------------------------------------------------
June 30, 1996
PENNSYLVANIA MUNICIPAL BOND FUND
SHARES VOTED % OF VOTED % OF TOTAL
FOR 565,475.00 96.40% 58.19%
AGAINST 19,980.00 3.41% 2.06%
ABSTAIN 1,119.00 0.19% 0.12%
PROPOSAL 3: To consider and vote upon a proposal to approve the selection of
Martin Currie, Inc. ("Martin Currie") or its successor as a Sub-Adviser for a
portion of the assets of the International Growth Fund.
INTERNATIONAL GROWTH FUND
SHARES VOTED % OF VOTED % OF TOTAL
FOR 6,434,497.00 99.80% 71.86%
AGAINST 6,500.00 0.10% 0.7%
ABSTAIN 6,546.00 0.10% 0.7%
PROPOSAL 4: To consider and vote upon a proposal to approve the selection of
Aberdeen Trust ("Aberdeen") or its successor as a Sub-Adviser for a portion of
the assets of the International Growth Fund.
INTERNATIONAL GROWTH FUND
SHARES VOTED % OF VOTED % OF TOTAL
FOR 6,438,013.00 99.85% 71.90%
AGAINST 3,576.00 0.6% 0.4%
ABSTAIN 5,953.00 0.9% 0.7%
PROPOSAL 5: To consider and vote upon a proposal to approve the selection of
Alpha Global Fixed Income Managers, Inc. ("Alpha Global") or its successor as a
Sub-Adviser to the Global Bond Fund.
GLOBAL BOND FUND
SHARES VOTED % OF VOTED % OF TOTAL
FOR 3,279,675.00 100.00% 95.19%
AGAINST 0.00 0.00% 0.00%
ABSTAIN 0.00 0.00% 0.00%
12
<PAGE>
COREFUND MONEY MARKET FUNDS
- --------------------------------------------------------------------------------
June 30, 1996
PROPOSAL 6: To consider and vote upon a proposal to change the Global Bond Fund
from a "diversified" investment company to a "non-diversified" investment
company.
GLOBAL BOND FUND
SHARES VOTED % OF VOTED % OF TOTAL
FOR 3,279,675.00 100.00% 95.19%
AGAINST 0.00 0.00% 0.00%
ABSTAIN 0.00 0.00% 0.00%
PROPOSAL 7: To consider and vote upon a proposal to change the fundamental
policy of the Short Intermediate Bond Fund so that the Fund maintains an average
weighted maturity of two to five years instead of the existing average weighted
maturity of three to ten years.
SHORT-INTERMEDIATE BOND FUND
SHARES VOTED % OF VOTED % OF TOTAL
FOR 2,370,056.00 97.90% 41.03%
AGAINST 36,158.00 1.49% 0.63%
ABSTAIN 14,715.00 0.61% 0.25%
PROPOSAL 8: To consider and vote upon an amended investment advisory agreement
between CoreStates Advisers and each of the Fiduciary Treasury Reserve and
Fiduciary Tax-Free Reserve ("Fiduciary Funds") which would increase (absent any
fee waivers) the contractual advisory fee paid to CoreStates Advisers.
FIDUCIARY TREASURY FUND
SHARES VOTED % OF VOTED % OF TOTAL
FOR 15,216,211.00 100.00% 76.23%
AGAINST 0.00 0.00% 0.00%
ABSTAIN 0.00 0.00% 0.00%
FIDUCIARY TAX-FREE FUND
SHARES VOTED % OF VOTED % OF TOTAL
FOR 55,814,121.00 98.84% 72.80%
AGAINST 170,134.00 0.30% 0.22%
ABSTAIN 485,200.00 0.86% 0.63%
13
<PAGE>
NOTICE TO SHAREHOLDERS OF COREFUNDS
(UNAUDITED)
For taxpayers filing on a calendar year basis, this notice is for
informational purposes only.
Dear CoreFund Shareholders:
For the fiscal year ended June 30, 1996, the Fiduciary Treasury Reserve
Fund is designating long-term capital gains, qualifying dividends and exempt
income with regard to distributions paid during the year as follows:
<TABLE>
<CAPTION>
(A) (B)
LONG TERM ORDINARY (C) (E)
CAPITAL GAINS INCOME TOTAL (D)** TAX (F)
DISTRIBUTIONS DISTRIBUTIONS DISTRIBUTIONS QUALIFYING EXEMPT FOREIGN
PORTFOLIO (TAX BASIS) (TAX BASIS) (TAX BASIS) DIVIDENDS (1) INTEREST TAX CREDIT (2)
------------ ------------- ------------- ------------- ------------- -------- --------------
<S> <C> <C> <C> <C> <C> <C>
Fiduciary Treasury Reserve 0% 100% 100% 0% 0% 0%
<FN>
(1) QUALIFYING DIVIDENDS REPRESENT DIVIDENDS WHICH QUALIFY FOR THE CORPORATE RECEIVED DEDUCTION.
* ITEMS (A) AND (B) ARE BASED ON A PERCENTAGE OF THE PORTFOLIOS' TOTAL DISTRIBUTION.
** ITEMS (D), (E) AND (F) ARE BASED ON A PERCENTAGE OF ORDINARY INCOME DISTRIBUTIONS OF THE PORTFOLIO.
</FN>
</TABLE>
Please consult your tax department for proper treatment of this information.
14
<PAGE>
REPORT OF INDEPENDENT AUDITORS
Board of Directors and Shareholders
CoreFunds, Inc.
We have audited the accompanying statement of net assets of the CoreFund
Fiduciary Treasury Reserve of CoreFunds, Inc. (the "Fund") as of June 30, 1996,
and the related statement of operations for the year then ended, and the
statements of changes in net assets and the financial highlights for each of the
years presented therein. These financial statements and financial highlights are
the responsibility of the Fund's management. Our responsibility is to express an
opinion on these financial statements and financial highlights based on our
audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements and financial highlights are
free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements. Our
procedures included verification by examination of securities held by the
Custodian as of June 30, 1996 and confirmation of securities not held by the
Custodian by correspondence with others. An audit also includes assessing the
accounting principles used and significant estimates made by management, as well
as evaluating the overall financial statement presentation. We believe that our
audit provides a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of the
CoreFund Fiduciary Treasury Reserve of CoreFunds, Inc. at June 30, 1996, the
results of its operations for the year then ended, the changes in its net assets
and the financial highlights for each of the years presented therein, in
conformity with generally accepted accounting principles.
Philadelphia, Pennsylvania
August 16, 1996
15
<PAGE>
NOTES
<PAGE>
NOTES
<PAGE>
This report and the financial statements contained herein are submitted for the
general information of the shareholders of the Corporation. The report is not
authorized for distribution to prospective investors in the Corporation unless
preceded or accompanied by an effective prospectus. Shares in the Fund are not
deposits or obligations of, or guaranteed or endorsed by, CoreStates Bank, N.A.,
the parent corporation of the Fund's investment adviser. Such shares are also
not federally insured by the Federal Deposit Insurance Corporation, the Federal
Reserve Board or any other agency.
COR-F-057-01
<PAGE>
CoreFunds,Inc.
--------------
FIDUCIARY TAX-FREE RESERVE
ANNUAL REPORT
June 30, 1996
<PAGE>
INVESTMENT ADVISER'S REPORT
COREFUND FIDUCIARY TAX-FREE RESERVE
JUNE 30, 1996
The CoreFund Fiduciary Tax-Free returned 3.51% for the one-year period ended
June 30, 1996. This compared with a return of 3.15% for the Benchmark Index, the
Donoghue Tax Free, for the same period. The Fund's assets grew by 13.93%
from $72.6 million on June 30, 1995 to $86.5 million on June 30, 1996.
The average maturity of the Fund changed from 28 days at June 30, 1995 to
41 days at June 30, 1996. Maturities were lengthened to lock-in yields as
interest rates declined and shortened when rates changed directions in March of
1996. The current market sentiment suggests a strong likelihood of a rate hike
before the calendar year end. The Fund's average maturity will be managed
accordingly.
<PAGE>
STATEMENT OF NET ASSETS COREFUND FIDUCIARY MONEY MARKET FUNDS
- --------------------------------------------------------------------------------
June 30, 1996
PAR VALUE
FIDUCIARY TAX-FREE RESERVE (000) (000)
- --------------------------------------------------------------------------------
MUNICIPAL BONDS - 102.2%
ALABAMA - 7.9%
Montgomery, Alabama TECP
3.400%, 07/10/96 ................. $3,460 $3,460
3.600%, 08/21/96 ................. 990 990
Winfield, Alabama Industrial Development
Authority Revenue Bond for Union
Underwear Project (A) (B) (C)
3.550%, 07/05/96 ................. 2,400 2,400
------
Total Alabama .................... 6,850
------
ALASKA - 3.2%
Valdez, Alaska TECP, Series A
3.400%, 07/11/96 ................. 1,325 1,325
Valdez, Alaska Industrial Development
Authority Revenue Bond for Exxon
Pipeline Company Project (A) (B)
3.550%, 07/01/96 ................. 300 300
Valdez, Alaska TECP
3.550%, 08/16/96 ................. 1,100 1,100
------
Total Alaska ..................... 2,725
------
COLORADO - 1.6%
Moffat County, Colorado Pollution
Control Revenue Bond (A) (B)
3.150%, 07/05/96 ................. 1,400 1,400
------
DELAWARE - 0.7%
New Castle County, Delaware GO
3.850%, 04/01/97 ................. 615 615
------
FLORIDA - 7.1%
Dade County, Florida Fixed Capital
Asset Acquisition Revenue
Bond, Series 1990 (A) (B) (C)
3.600%, 07/05/96 ................. 1,400 1,400
Florida Municipal Power TECP
3.550%, 12/02/96 ................. 1,250 1,250
Florida State Housing Finance
Agency Revenue Bond for Carlton
Project, Series EEE (A) (B) (C)
3.150%, 07/05/96 ................. 1,020 1,020
Florida State Housing Finance Agency
Revenue Bond for Huntington
Project (A) (B) (C)
3.750%, 07/05/96 ................. 200 200
Orange County, Florida Industrial
Development Authority Revenue Bond
for Orlando International
Project (A) (B) (C)
3.900%, 07/01/96 ................. 300 300
1
<PAGE>
STATEMENT OF NET ASSETS (CONTINUED) COREFUND FIDUCIARY MONEY MARKET FUNDS
- --------------------------------------------------------------------------------
June 30, 1996
PAR VALUE
FIDUCIARY TAX-FREE RESERVE (000) (000)
- --------------------------------------------------------------------------------
Sunshine State, Florida TECP
3.550%, 09/10/96 ................ $2,000 $2,000
------
Total Florida ................... 6,170
------
ILLINOIS - 4.4%
Chicago, Illinois O'Hare Airport
Revenue Bond (A) (B) (C)
3.400%, 07/05/96 ................ 400 400
Illinois Development Finance Authority
Pollution Control
Revenue Bond (A) (B)
3.550%, 07/01/96 ................ 300 300
Illinois State Development Finance
Authority Revenue Bond
for Illinois Power Company
Project, Series B (A) (B) (C)
3.400%, 07/05/96 ................ 1,400 1,400
Illinois State Health Facilities
Authority Revenue Bond for
Franciscan Village Project,
Series A (A) (B) (C)
3.400%, 07/05/96 ................ 300 300
Lisle, Illinois Housing Authority
Revenue Bond for Ashley
of Lisle Project (A) (B) (C)
3.300%, 07/05/96 ................ 1,400 1,400
------
Total Illinois .................. 3,800
------
INDIANA - 9.2%
City of Mt. Vernon, Indiana TECP
3.450%, 07/30/96 ................ 735 735
Gary, Indiana Environmental Improvement
Revenue Bond for U.S. Steel Project
(A) (B) (C)
3.700%, 07/15/96 ................ 700 700
Jasper County, Indiana TECP, Series 88C
3.450%, 07/11/96 ................ 400 400
Jasper County, Indiana TECP, Series 88D
3.450%, 07/11/96 ................ 1,000 1,000
Jasper County, Indiana TECP, Series 88A
3.250%, 08/08/96 ................ 200 200
Jasper County, Indiana TECP
3.650%, 07/17/96 ................ 1,000 1,000
3.650%, 08/08/96 ................ 1,190 1,190
Sullivan, Indiana TECP
3.400%, 07/17/96 ................ 1,000 1,000
2
<PAGE>
STATEMENT OF NET ASSETS COREFUND FIDUCIARY MONEY MARKET FUNDS
- --------------------------------------------------------------------------------
June 30, 1996
PAR VALUE
FIDUCIARY TAX-FREE RESERVE (000) (000)
- --------------------------------------------------------------------------------
Sullivan, Indiana TECP
3.250%, 08/08/96 .................. $ 500 $ 500
3.600%, 10/16/96 .................. 950 950
Sullivan, Indiana TECP, Series L2
3.500%, 07/30/96 .................. 300 300
------
Total Indiana ..................... 7,975
------
KANSAS - 2.8%
Burlington, Kansas TECP, Series C1
3.650%, 07/17/96 .................. 400 400
3.600%, 10/23/96 .................. 1,500 1,500
Kansas City, Kansas Industrial
Development Revenue Bond for
PQ Corporation Project (A) (B) (C)
3.700%, 07/01/96 .................. 100 100
Wichita, Kansas Health Facilities Revenue
Bond for Wichita
Health Systems Project,
Series XXV (A) (B) (C)
3.650%, 07/05/96 .................. 400 400
------
Total Kansas ...................... 2,400
------
KENTUCKY - 3.5%
Pendelton County, Kentucky TECP
3.700%, 08/05/96 .................. 3,000 3,000
------
LOUISIANA - 1.2%
Jefferson Parish, Louisiana Industrial
Revenue Bond for
George J. Ackel, Sr
Project (A) (B) (C)
3.150%, 07/05/96 .................. 1,000 1,000
------
MASSACHUSETTS - 1.2%
Commonwealth of Massachusetts
GO (A) (B) (C)
3.600%, 07/01/96 .................. 1,000 1,000
------
MICHIGAN - 1.2%
Michigan State GO
4.000%, 09/30/96 .................. 1,000 1,002
------
MISSISSIPPI - 3.5%
Claiborne County, Mississippi TECP
3.650%, 07/24/96 .................. 2,000 2,000
3.650%, 08/07/96 .................. 1,000 1,000
------
Total Mississippi ................. 3,000
------
3
<PAGE>
STATEMENT OF NET ASSETS (CONTINUED) COREFUND FIDUCIARY MONEY MARKET FUNDS
- --------------------------------------------------------------------------------
June 30, 1996
PAR VALUE
FIDUCIARY TAX-FREE RESERVE (000) (000)
- --------------------------------------------------------------------------------
MISSOURI - 1.2%
Missouri State Environmental
Improvement TECP
3.550%, 07/10/96 ............... $1,000 $1,000
------
MONTANA - 3.5%
Forsyth, Montana Pollution Control
Revenue Bond for Portland
General Electric
Project (A) (B) (C)
3.300%, 07/05/96 ............... 1,000 1,000
Forsyth, Montana Pollution Control
Revenue Bond for Portland
General Electric Project,
Series A (A) (B) (C)
3.200%, 07/05/96 ............... 2,000 2,000
------
Total Montana .................. 3,000
------
NEVADA - 2.5%
Nevada State Housing Authority
Revenue Bond for Multi-Unit
Park Project, Series A (A) (B) (C)
3.500%, 07/05/96 ............... 2,200 2,200
------
NEW HAMPSHIRE - 0.7%
New Hampshire State Industrial
Development Revenue Bond for
Oerlikon-Burlhe Project (A) (B) (C)
3.650%, 07/01/96 ............... 600 600
------
NEW JERSEY - 2.9%
Springfield Township, New Jersey BAN
3.750%, 10/04/96 ............... 2,500 2,502
------
NEW YORK - 2.5%
New York, New York TECP, Series J3
3.500%, 09/17/96 ............... 2,000 2,000
New York, New York GO (A) (B) (C)
3.750%, 07/01/96 ............... 200 200
------
Total New York ................. 2,200
------
OHIO - 2.4%
Evandale, Ohio Industrial
Development Authority
Revenue Bond (A) (B) (C)
3.550%, 07/05/96 ............... 1,600 1,600
Ohio State Air Quality Revenue
Bond (A) (B) (C)
3.600%, 07/01/96 ............... 100 100
Ohio State Air Quality Revenue
Bond, Series B (A) (B) (C)
3.750%, 07/01/96 ............... 400 400
------
Total Ohio ..................... 2,100
------
4
<PAGE>
STATEMENT OF NET ASSETS COREFUND FIDUCIARY MONEY MARKET FUNDS
- --------------------------------------------------------------------------------
June 30, 1996
PAR VALUE
FIDUCIARY TAX-FREE RESERVE (000) (000)
- --------------------------------------------------------------------------------
OREGON - 1.2%
Port of Portland, Pollution Control
Authority Revenue Bond for
Dates-Reynolds Metals
Project (A) (B) (C)
3.650%, 07/01/96 ................. $ 400 $ 400
Port of St. Helens, Portland,
Oregon Pollution Control
Revenue Bond (A) (B) (C)
3.550%, 07/01/96 ................. 600 600
-------
Total Oregon ..................... 1,000
-------
PENNSYLVANIA - 20.3%
Allegheny County, Pennsylvania
Revenue Bond for Presbyterian
University Hospital (A) (B)
3.550%, 07/05/96 ................. 4,535 4,535
Beaver County, Pennsylvania
Industrial Development Authority
Revenue Bond for Duquesne
Light Company Project,
Series A (A) (B) (C)
3.250%, 07/05/96 ................. 1,000 1,000
Beaver County, Pennsylvania
Industrial Development Authority
Revenue Bond for Duquesne Light
Company Project,
Series B (A) (B) (C)
3.250%, 07/05/96 ................. 1,100 1,100
Lehigh County, Pennsylvania Industrial
Development Authority
Revenue Bond for Allegheny Electric
Project, Series A (A) (B) (C)
3.550%, 07/05/96 ................. 500 500
Montgomery County, Pennsylvania TECP
3.500%, 09/09/96 ................. 3,000 3,000
Pennsylvania State Higher Education
Facility Authority Revenue
Bond for Thomas Jefferson University,
Series B (C)
3.300%, 08/26/96 ................. 405 405
Pennsylvania State University GO
4.250%, 04/04/97 ................. 2,000 2,011
Washington County, Pennsylvania
Industrial Development
Authority Revenue Bond for
Werrerau Finance Company
Project (A) (B) (C)
3.550%, 07/05/96 ................. 2,500 2,500
Washington County, Pennsylvania
Lease Revenue Bond (A) (B) (C)
3.300%, 07/05/96 ................. 2,500 2,500
-------
Total Pennsylvania ............... 17,551
-------
5
<PAGE>
STATEMENT OF NET ASSETS (CONTINUED) COREFUND FIDUCIARY MONEY MARKET FUNDS
- --------------------------------------------------------------------------------
June 30, 1996
PAR VALUE
FIDUCIARY TAX-FREE RESERVE (000) (000)
- --------------------------------------------------------------------------------
TEXAS - 7.6%
Grapevine, Texas Industrial
Development Revenue Bond (A) (B) (C)
3.650%, 07/01/96 ................. $2,000 $2,000
Houston, Texas TRAN
4.500%, 06/30/97 ................. 2,000 2,011
Nueces County, Texas Health
Facilities Authority Revenue Bond for
Driscoll Children's Foundation
Project (A) (B) (C)
3.150%, 07/05/96 ................. 600 600
Texas State Southwest, Texas Higher
Education Authority Revenue
Bond for Southern Methodist
University (A) (B) (C)
3.550%, 07/01/96 ................. 2,000 2,000
------
Total Texas ...................... 6,611
------
VERMONT - 1.5%
Vermont State Student Loan Revenue
Bond, Student Loan
Assistance Corporation
Project (A) (B) (C)
3.650%, 07/01/96 ................. 1,340 1,340
------
VIRGINIA - 0.6%
Virginia State Peninsula Port Authority
Revenue Bond for
Dominion Terminal Project,
Series 1987C (A) (B) (C)
3.600%, 07/01/96 ................. 500 500
------
WEST VIRGINIA - 1.5%
Putnam County, West Virginia
Industrial Development Authority
Revenue Bond for FMC Corporation
Project (A) (B) (C)
3.650%, 07/01/96 ................. 1,300 1,300
------
WISCONSIN - 2.3%
Milwaukee, Wisconsin RAN, Series A
3.500%, 02/27/97 ................. 2,000 2,006
------
WYOMING - 4.0%
Gillette County, Wyoming TECP
3.650%, 08/16/96 ................. 3,000 3,000
6
<PAGE>
STATEMENT OF NET ASSETS (CONCLUDED) COREFUND FIDUCIARY MONEY MARKET FUNDS
- --------------------------------------------------------------------------------
June 30, 1996
FACE MARKET
AMOUNT VALUE
FIDUCIARY TAX-FREE RESERVE (000) (000)
- --------------------------------------------------------------------------------
Platte County, Wyoming Pollution
Control Revenue Bond (A) (B) (C)
3.700%, 07/01/96 ..................... $100 $ 100
Sublette County, Wyoming Pollution
Control Revenue Bond for
Exxon Project, Series 84 (A) (B)
3.550%, 07/01/96 ..................... 400 400
--------
Total Wyoming ........................ 3,500
--------
TOTAL MUNICIPAL BONDS
(Cost $88,347) ...................................... 88,347
--------
TOTAL INVESTMENTS - 102.2%
(Cost $88,347) ......................................... 88,347
--------
OTHER ASSETS AND LIABILITIES, NET - (2.2%) ................ (1,870)
--------
NET ASSETS:
Portfolio Shares ($0.001 par value -
250 million authorized) based on
86,506,941 outstanding shares ........................ 86,507
Accumulated Net Realized Loss on Investments (30)
--------
TOTAL NET ASSETS - 100.0% .................................. $ 86,477
--------
NET ASSET VALUE, OFFERING & REDEMPTION
PRICE PER SHARE ......................................... $ 1.00
--------
BAN -- BOND ANTICIPATION NOTE
GO -- GENERAL OBLIGATION
RAN -- REVENUE ANTICIPATION NOTE
TECP -- TAX-EXEMPT COMMERCIAL PAPER
TRAN -- TAX & REVENUE ANTICIPATION NOTE
(A) VARIABLE RATE SECURITY - THE RATE REFLECTED ON THE STATEMENT OF NET ASSETS
IS THE RATE IN EFFECT ON JUNE 30, 1996.
(B) PUT OR DEMAND FEATURES EXIST REQUIRING THE ISSUER TO REPURCHASE THE
INSTRUMENT PRIOR TO MATURITY. THE MATURITY DATE SHOWN IS THE LESSER OF THE
PUT DEMAND DATE OR MATURITY DATE.
(C) SECURITIES ARE HELD IN CONNECTION WITH A LETTER OF CREDIT ISSUED BY A MAJOR
COMMERCIAL BANK.
See accompanying notes to financial statements.
7
<PAGE>
STATEMENT OF OPERATIONS (000) COREFUND FIDUCIARY MONEY MARKET FUNDS
- --------------------------------------------------------------------------------
For the year ended June 30, 1996
FIDUCIARY TAX-FREE RESERVE
- --------------------------------------------------------------------------------
INVESTMENT INCOME:
Interest ............................................... $3,152
------
EXPENSES:
Investment advisory fees .................................. 406
Less investment advisory fees waived ...................... (406)
Administrative fees ....................................... 219
Less administrative fees waived ........................... (119)
Transfer agent fees & expenses ............................ 16
Professional fees ......................................... 11
Registration & filing fees ................................ 23
Taxes - other than income ................................. (19)
Miscellaneous ............................................. (9)
------
Total expenses .................................................. 140
------
NET INVESTMENT INCOME ........................................... 3,012
NET REALIZED LOSS ON INVESTMENTS:
Net realized loss from securities sold .................... (5)
------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS ............ $3,007
======
See accompanying notes to financial statements.
8
<PAGE>
STATEMENT OF CHANGES IN NET ASSETS (000) COREFUND MONEY MARKET FUNDS
- --------------------------------------------------------------------------------
For the years ended June 30
FIDUCIARY TAX-FREE RESERVE
- --------------------------------------------------------------------------------
07/01/95 07/01/94
TO 06/30/96 TO 06/30/95
----------- -----------
OPERATIONS:
Net investment income ...................... $ 3,012 $ 2,856
Net realized loss on securities sold ....... (5) (7)
--------- ---------
Net increase in net assets resulting
from operations ......................... 3,007 2,849
--------- ---------
DIVIDENDS DISTRIBUTED FROM:
Net investment income ...................... (3,012) (2,856)
Net realized gains ......................... -- (3)
--------- ---------
Total dividends distributed ................ (3,012) (2,859)
--------- ---------
CAPITAL SHARE TRANSACTIONS:
Proceeds from shares issued ................ 224,591 213,817
Cost of shares redeemed .................... (210,702) (219,433)
--------- ---------
Increase (decrease) in net assets derived
from capital share transactions ......... 13,889 (5,616)
--------- ---------
NET INCREASE (DECREASE) IN NET ASSETS ............ 13,884 (5,626)
NET ASSETS:
Beginning of period ........................ 72,593 78,219
--------- ---------
End of period .............................. $ 86,477 $ 72,593
========= =========
SHARES ISSUED AND REDEEMED:
Shares issued .............................. 224,591 213,817
Shares redeemed ............................ (210,702) (219,433)
--------- ---------
Increase (decrease) in net shares derived
from capital share transactions ......... 13,889 (5,616)
--------- ---------
OUTSTANDING SHARES:
Beginning of period ........................ 72,618 78,234
--------- ---------
End of period .............................. 86,507 72,618
========= =========
See accompanying notes to financial statements.
9
<PAGE>
FINANCIAL HIGHLIGHTS -- COREFUND FIDUCIARY MONEY MARKET FUNDS
- --------------------------------------------------------------------------------
June 30, 1996
FIDUCIARY TAX-FREE RESERVE
- --------------------------------------------------------------------------------
For a Share Outstanding Throughout the Period
<TABLE>
<CAPTION>
NET NET
ASSET DISTRIBUTIONS NET ASSETS
VALUE NET FROM NET ASSET VALUE END
BEGINNING INVESTMENT INVESTMENT END TOTAL OF PERIOD
OF PERIOD INCOME INCOME OF PERIOD RETURN (000)
--------- ---------- ------------- ----------- ------ ---------
<S> <C> <C> <C> <C> <C> <C>
For the year ended
June 30, 1996 $1.00 0.03 (0.03) $1.00 3.51% $86,477
For the year ended
June 30, 1995 $1.00 0.03 (0.03) $1.00 3.41% $72,593
For the year ended
June 30, 1994 $1.00 0.02 (0.02) $1.00 2.32% $78,219
For the year ended
June 30, 1993 $1.00 0.02 (0.02) $1.00 2.48% $48,424
For the period ended
June 30, 1992 (1) $1.00 0.02 (0.02) $1.00 1.50%* $66,158
</TABLE>
<TABLE>
<CAPTION>
RATIO RATIO OF
RATIO OF EXPENSES NET INCOME
RATIO OF NET TO AVERAGETO AVERAGE
OF EXPENSES INCOME NET ASSETS NET ASSETS
TO AVERAGE TO AVERAGE (EXCLUDING (EXCLUDING
NET ASSETS NET ASSETS WAIVERS) WAIVERS)
----------- ---------- ------------ -----------
<S> <C> <C> <C> <C>
For the year ended
June 30, 1996 0.16% 3.44% 0.76% 2.84%
For the year ended
June 30, 1995 0.19% 3.37% 0.83% 2.73%
For the year ended
June 30, 1994 0.17% 2.29% 0.82% 1.64%
For the year ended
June 30, 1993 0.19% 2.45% 0.83% 1.81%
For the period ended
June 30, 1992 (1) 0.17% 3.00% 0.89% 2.28%
<FN>
- --------------
* RETURN IS FOR THE PERIOD INDICATED AND HAS NOT BEEN ANNUALIZED.
(1) THE FIDUCIARY TAX-FREE RESERVE COMMENCED OPERATIONS ON NOVEMBER 19, 1991.
RATIOS FOR THIS PERIOD HAVE BEEN ANNUALIZED.
</FN>
</TABLE>
See accompanying notes to financial statements.
10
<PAGE>
NOTES TO FINANCIAL STATEMENTS COREFUND FIDUCIARY MONEY MARKET FUNDS
- --------------------------------------------------------------------------------
June 30, 1996
1. ORGANIZATION
The CoreFund Fiduciary Tax-Free Reserve is a Fund offered by CoreFunds, Inc.
(the "Company"), an open-end investment company registered under the Investment
Company Act of 1940, as amended.
The Company is presently authorized to offer shares in the following Funds (the
"Funds"):
EQUITY FUNDS: MONEY MARKET FUNDS:
Growth Equity Fund Cash Reserve
Equity Fund Treasury Reserve
Equity Index Fund Tax-Free Reserve
International Growth Fund Fiduciary Reserve
Balanced Fund Fiduciary Treasury Reserve
Special Equity Fund Fiduciary Tax-Free Reserve
FIXED INCOME FUNDS:
Short Term Income Fund
Government Income Fund
Short-Intermediate Bond Fund
Intermediate Municipal Bond Fund
Bond Fund
Global Bond Fund
Pennsylvania Municipal Bond Fund
New Jersey Municipal Bond Fund
The financial statements included herein present only those of the Fiduciary
Tax-Free Reserve Fund. The financial statements of the remaining Funds are
presented separately. The assets of each Fund are segregated, and a
shareholder's interest is limited to the Fund in which shares are held. The
Funds' prospectus provides a description of the Funds' investment objectives,
policies and strategies.
2. SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies followed by the
Fiduciary Tax-Free Reserve Fund.
SECURITY VALUATION -- Investment securities of the Fiduciary Tax-Free Reserve
Fund are stated at amortized cost which approximates market value. Under this
valuation method, purchase discounts and premiums are accreted and amortized
ratably to maturity and are included in interest income.
11
<PAGE>
NOTES TO FINANCIAL STATEMENTS (CONTINUED) COREFUND FIDUCIARY MONEY MARKET FUNDS
- --------------------------------------------------------------------------------
June 30, 1996
SECURITY TRANSACTIONS AND INVESTMENT INCOME -- Security transactions are
accounted for on the trade date of the security purchase or sale. Costs 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 the purchase discounts and premiums during the respective
holding period. Interest income is recorded on the accrual basis.
EXPENSES -- Expenses that are directly related to a Fund are charged
directly to that Fund. Other operating expenses of the Company are prorated to a
Fund on the basis of relative net assets.
DISTRIBUTIONS TO SHAREHOLDERS -- Distributions from net investment income
are declared on a daily basis and are payable on the first business day of the
following month. Any net realized capital gains on sales of securities for a
Fund are distributed to its shareholders at least annually.
FEDERAL INCOME TAXES -- It is the Fund's intention to continue to
qualify as a regulated investment company and distribute all of its taxable
income. Accordingly, no provision for Federal income taxes is required.
3. INVESTMENT ADVISORY AND CUSTODIAL SERVICES
Pursuant to an investment advisory agreement dated August 12, 1996, investment
advisory services are provided to the Company by CoreStates Investment Advisers,
Inc. ("CoreStates Advisers"), a wholly-owned subsidiary of CoreStates Bank, N.A.
("CoreStates Bank"), itself a wholly-owned subsidiary of CoreStates Financial
Corp. Under the terms of such agreement, CoreStates Advisers is entitled to
receive an annual fee of 0.20% on the average net assets of the Fiduciary
Tax-Free Reserve Fund. Prior to August 12, 1996, CoreStates Advisers were
entitled to receive an annual fee of 0.50% on the average net assets of the
Fiduciary Tax-Free Reserve Fund. For the year ended June 30, 1996, CoreStates
Advisers earned $405,928 in investment advisory fees, all of which was
voluntarily waived in order to assist the Fund in maintaining a competitive
expense ratio.
CoreStates Bank also serves as Custodian to the Company. No fees are being paid
to CoreStates Bank for such services.
4. ADMINISTRATIVE, DISTRIBUTION, AND TRANSFER AGENT SERVICES
Pursuant to an administration agreement dated October 30, 1992, as amended June
1, 1995, SEI Fund Resources ("SFR"), a wholly-owned subsidiary of SEI
Corporation, acts as the Fund's Administrator. Under the terms of such
agreement, SFR is entitled to receive an annual fee of 0.25% on the average
daily net assets of the Fiduciary Tax-Free Reserve Fund. Such a fee is computed
daily and paid monthly. For the year ended June 30, 1996, administrative fees
totaled $218,633 of which $118,592 was voluntarily waived in order to assist the
Fund in maintaining a competitive expense ratio.
Effective for the period July 1, 1995 to November 16, 1995, SEI Financial
Management Corporation acted as the Transfer Agent of the Fund. Pursuant to a
transfer agency agreement dated November 16, 1995, Boston Financial Data
Services ("BFDS") a subsidiary of State Street
12
<PAGE>
NOTES TO FINANCIAL STATEMENTS (CONTINUED) COREFUND FIDUCIARY MONEY MARKET FUNDS
- --------------------------------------------------------------------------------
June 30, 1996
Bank and Trust Company acts as the Fund's Transfer Agent. As such, BFDS provides
transfer agency, dividend disbursing, and shareholder servicing for the Fund.
On November 2, 1992, SEI Financial Services Company ("SFS"), also a wholly-owned
subsidiary of SEI Corporation, became the Fund's exclusive Distributor pursuant
to a distribution agreement dated October 30, 1992.
Certain officers of the Company are also officers of the Administrator. Such
officers are not paid fees by the Fund.
The Fund has paid legal fees to a law firm in which the secretary of the Company
is a partner.
5. INVESTMENT COMPOSITION
The Fund invests in securities which include revenue and general obligation
instruments.
At June 30,1996, the revenue sources by purpose were as follows:
% OF PORTFOLIO
INVESTMENTS
--------------
REVENUE INSTRUMENTS
Education Bonds ............................. 7%
Hospital & Health Care Bonds ................ 7%
Housing Bonds ............................... 6%
Industrial Bonds ............................ 13%
Other Bonds ................................. 7%
Pollution Control Bonds ..................... 8%
Transportation Bonds ........................ 3%
Utility Bonds ............................... 3%
TAX EXEMPT COMMERCIAL PAPER .......................... 39%
GENERAL OBLIGATIONS .................................. 5%
TAX & REVENUE ANTICIPATION NOTES ..................... 2%
----
100%
====
In addition, certain investments are covered by insurance issued by several
private issuers who guarantee the payment of interest and principal at final
maturity in the event of default. Such insurance, however, does not guarantee
the market value of the securities or the value of the Fund's shares.
13
<PAGE>
COREFUND MONEY MARKET FUNDS
- --------------------------------------------------------------------------------
June 30, 1996
SHAREHOLDER VOTING RESULTS (UNAUDITED):
There was a special meeting scheduled for April 9,1996 at which the shareholders
of the Cash Reserve, Treasury Reserve, Growth Equity Fund, Short-Intermediate
Bond Fund (formerly Intermediate Bond Fund), Government Income Fund,
Intermediate Municipal Bond Fund, Tax-Free Reserve, Value Equity Fund, Global
Bond Fund, Equity Index Fund, Balanced Fund, International Growth Fund, New
Jersey Municipal Bond Fund, Fiduciary Reserve, Fiduciary Tax Free Reserve,
Fiduciary Treasury Reserve, Elite Cash Reserve, Elite Government Reserve, and
Elite Treasury Reserve (the "Funds") voted on a series of proposals (the
"Proposals"). With respect to Proposal 2 relating to the Pennsylvania Municipal
Bond Fund, the meeting was adjourned until July 17, 1996. The proposals and the
results of the shareholder meeting are set forth as follows.
PROPOSAL 1: To consider and act upon a proposal to elect a Board of Directors.
ELECTION OF DIRECTORS:
SHARES VOTED "FOR" % OF VOTED % OF TOTAL
Emil J. Mikity 897,624,729.00 99.67% 54.71%
George H. Strong 897,631,180.00 99.67% 54.71%
Erin Anderson 897,649,083.00 99.67% 54.71%
Cheryl H. Wade 897,614,431.00 99.67% 54.71%
Thomas J. Taylor 897,630,502.00 99.67% 54.71%
SHARES VOTED "FOR" % OF VOTED % OF TOTAL
WITHHELD AUTHORITY
Emil J. Mikity 2,998,845.00 0.33% 0.18%
George H. Strong 2,992,394.00 0.33% 0.18%
Erin Anderson 2,974,491.00 0.33% 0.18%
Cheryl H. Wade 3,009,143.00 0.33% 0.18%
Thomas J. Taylor 2,993,072.00 0.33% 0.18%
PROPOSAL 2: To consider and vote upon a proposal to approve a new advisory
agreement between the Company, on behalf of each Fund, and CoreStates Investment
Advisers, Inc. ("CoreStates Advisers"), pursuant to which CoreStates Advisers
will act as investment adviser with respect to the assets of the Funds,
effective upon the merger of CoreStates Corp.
("CoreStates") and Meridian Bancorp, Inc. ("Meridian") (the "Merger").
14
<PAGE>
COREFUND FIDUCIARY MONEY MARKET FUNDS
- --------------------------------------------------------------------------------
June 30, 1996
SHORT-INTERMEDIATE BOND FUND
SHARES VOTED % OF VOTED % OF TOTAL
FOR 2,812,494.00 96.91% 48.69%
AGAINST 57,130.00 1.97% 0.99%
ABSTAIN 32,682.00 1.13% 0.57%
CASH RESERVE FUND
SHARES VOTED % OF VOTED % OF TOTAL
FOR 302,869,534.00 99.98% 51.28%
AGAINST 631,760.00 0.21% 0.11%
ABSTAIN 2,501,075.00 0.82% 0.42%
TREASURY RESERVE FUND
SHARES VOTED % OF VOTED % OF TOTAL
FOR 279,305,695.00 99.86% 50.22%
AGAINST 181,597.00 0.6% 0.3%
ABSTAIN 206,812.00 0.7% 0.4%
GROWTH EQUITY FUND
SHARES VOTED % OF VOTED % OF TOTAL
FOR 4,370,815.00 97.35% 50.83%
AGAINST 32,878.00 0.73% 0.38%
ABSTAIN 85,945.00 1.91% 0.1%
INTERMEDIATE BOND FUND
SHARES VOTED % OF VOTED % OF TOTAL
FOR 62,694.00 84.04% 49.96%
AGAINST 0.00 0.00% 0.00%
ABSTAIN 11,905.00 15.96% 9.49%
GOVERNMENT INCOME FUND
SHARES VOTED % OF VOTED % OF TOTAL
FOR 824,683.00 99.62% 55.41%
AGAINST 0.00 0.00% 0.00%
ABSTAIN 3,152.00 0.38% 0.21%
15
<PAGE>
COREFUND MONEY MARKET FUNDS
- --------------------------------------------------------------------------------
June 30, 1996
TAX-FREE RESERVE FUND
SHARES VOTED % OF VOTED % OF TOTAL
FOR 33,136,439.00 99.71% 49.91%
AGAINST 97,294.00 0.29% 0.15%
ABSTAIN 0.00 0.00% 0.00%
VALUE EQUITY FUND
SHARES VOTED % OF VOTED % OF TOTAL
FOR 2,010,658.00 99.92% 75.86%
AGAINST 65.00 0.00% 0.00%
ABSTAIN 1,501.00 0.7% 0.6%
GLOBAL BOND FUND
SHARES VOTED % OF VOTED % OF TOTAL
FOR 3,279,675.00 100.00% 95.19%
AGAINST 0.00 0.00% 0.00%
ABSTAIN 0.00 0.00% 0.00%
EQUITY INDEX FUND
SHARES VOTED % OF VOTED % OF TOTAL
FOR 3,164,839.00 99.40% 59.23%
AGAINST 5,049.00 0.16% 0.9%
ABSTAIN 14,111.00 0.44% 0.26%
BALANCED FUND
SHARES VOTED % OF VOTED % OF TOTAL
FOR 3,134,366.00 96.20% 53.00%
AGAINST 24,641.00 0.76% 0.42%
ABSTAIN 99,236.00 3.05% 1.68%
INTERNATIONAL GROWTH FUND
SHARES VOTED % OF VOTED % OF TOTAL
FOR 6,439,273.00 99.87% 71.92%
AGAINST 1,804.00 0.3% 0.2%
ABSTAIN 6,466.00 0.10% 0.7%
NEW JERSEY MUNICIPAL FUND
SHARES VOTED % OF VOTED % OF TOTAL
FOR 83,788.00 100.00% 52.19%
AGAINST 0.00 0.00% 0.00%
ABSTAIN 0.00 0.00% 0.00%
16
<PAGE>
COREFUND FIDUCIARY MONEY MARKET FUNDS
- --------------------------------------------------------------------------------
June 30, 1996
FIDUCIARY RESERVE FUND
SHARES VOTED % OF VOTED % OF TOTAL
FOR 195,289,296.00 99.85% 53.52%
AGAINST 50,476.00 0.3% 0.1%
ABSTAIN 237,317.00 0.12% 0.7%
FIDUCIARY TAX-FREE FUND
SHARES VOTED % OF VOTED % OF TOTAL
FOR 55,972,626.00 99.12% 73.01%
AGAINST 67,984.00 0.12% 0.22%
ABSTAIN 428,845.00 0.76% 0.56%
FIDUCIARY TREASURY FUND
SHARES VOTED % OF VOTED % OF TOTAL
FOR 15,216,211.00 100.00% 76.23%
AGAINST 0.00 0.00% 0.00%
ABSTAIN 0.00 0.00% 0.00%
PENNSYLVANIA MUNICIPAL BOND FUND
SHARES VOTED % OF VOTED % OF TOTAL
FOR 565,475.00 96.40% 58.19%
AGAINST 19,980.00 3.41% 2.06%
ABSTAIN 1,119.00 0.19% 0.12%
PROPOSAL 3: To consider and vote upon a proposal to approve the selection of
Martin Currie, Inc. ("Martin Currie") or its successor as a Sub-Adviser for a
portion of the assets of the International Growth Fund.
INTERNATIONAL GROWTH FUND
SHARES VOTED % OF VOTED % OF TOTAL
FOR 6,434,497.00 99.80% 71.86%
AGAINST 6,500.00 0.10% 0.7%
ABSTAIN 6,546.00 0.10% 0.7%
17
<PAGE>
COREFUND MONEY MARKET FUNDS
- --------------------------------------------------------------------------------
June 30, 1996
PROPOSAL 4: To consider and vote upon a proposal to approve the selection of
Aberdeen Trust ("Aberdeen") or its successor as a Sub-Adviser for a portion of
the assets of the International Growth Fund.
INTERNATIONAL GROWTH FUND
SHARES VOTED % OF VOTED % OF TOTAL
FOR 6,438,013.00 99.85% 71.90%
AGAINST 3,576.00 0.6% 0.4%
ABSTAIN 5,953.00 0.9% 0.7%
PROPOSAL 5: To consider and vote upon a proposal to approve the selection of
Alpha Global Fixed Income Managers, Inc. ("Alpha Global") or its successor as a
Sub-Adviser to the Global Bond Fund.
GLOBAL BOND FUND
SHARES VOTED % OF VOTED % OF TOTAL
FOR 3,279,675.00 100.00% 95.19%
AGAINST 0.00 0.00% 0.00%
ABSTAIN 0.00 0.00% 0.00%
PROPOSAL 6: To consider and vote upon a proposal to change the Global Bond Fund
from a "diversified" investment company to a "non-diversified" investment
company.
GLOBAL BOND FUND
SHARES VOTED % OF VOTED % OF TOTAL
FOR 3,279,675.00 100.00% 95.19%
AGAINST 0.00 0.00% 0.00%
ABSTAIN 0.00 0.00% 0.00%
PROPOSAL 7: To consider and vote upon a proposal to change the fundamental
policy of the Short-Intermediate Bond Fund so that the Fund maintains an average
weighted maturity of two to five years instead of the existing average weighted
maturity of three to ten years.
SHORT-INTERMEDIATE BOND FUND
SHARES VOTED % OF VOTED % OF TOTAL
FOR 2,370,056.00 97.90% 41.03%
AGAINST 36,158.00 1.49% 0.63%
ABSTAIN 14,715.00 0.61% 0.25%
18
<PAGE>
COREFUND FIDUCIARY MONEY MARKET FUNDS
- --------------------------------------------------------------------------------
June 30, 1996
PROPOSAL 8: To consider and vote upon an amended investment advisory agreement
between CoreStates Advisers and each of the Fiduciary Treasury Reserve and
Fiduciary Tax-Free Reserve ("Fiduciary Funds") which would increase (absent any
fee waivers) the contractual advisory fee paid to CoreStates Advisers.
FIDUCIARY TREASURY FUND
SHARES VOTED % OF VOTED % OF TOTAL
FOR 15,216,211.00 100.00% 76.23%
AGAINST 0.00 0.00% 0.00%
ABSTAIN 0.00 0.00% 0.00%
FIDUCIARY TAX-FREE FUND
SHARES VOTED % OF VOTED % OF TOTAL
FOR 55,814,121.00 98.84% 72.80%
AGAINST 170,134.00 0.30% 0.22%
ABSTAIN 485,200.00 0.86% 0.63%
19
<PAGE>
NOTICE TO SHAREHOLDERS OF COREFUNDS
(UNAUDITED)
For taxpayers filing on a calendar year basis, this notice is for
informational purposes only.
Dear CoreFund Shareholders:
For the fiscal year ended June 30, 1996, the Fiduciary Tax-Free Reserve
Fund is designating long-term capital gains, qualifying dividends and exempt
income with regard to distributions paid during the year as follows:
<TABLE>
<CAPTION>
(A) (B)
LONG TERM ORDINARY (C)
CAPITAL GAINS INCOME TOTAL
DISTRIBUTIONS DISTRIBUTIONS DISTRIBUTIONS
PORTFOLIO (TAX BASIS) (TAX BASIS) (TAX BASIS)
--------- ------------- ------------- -------------
<S> <C> <C> <C>
Fiduciary Tax-Free Reserve 0% 100% 100%
</TABLE>
<TABLE>
<CAPTION>
(E)
(D)** TAX (F)
QUALIFYING EXEMPT FOREIGN
PORTFOLIO DIVIDENDS (1) INTEREST TAX CREDIT (2)
--------- ------------- -------- --------------
<S> <C> <C> <C>
Fiduciary Tax-Free Reserve 0% 100% 0%
<FN>
(1) QUALIFYING DIVIDENDS REPRESENT DIVIDENDS WHICH QUALIFY FOR THE CORPORATE
RECEIVED DEDUCTION.
* ITEMS (A) AND (B) ARE BASED ON A PERCENTAGE OF THE PORTFOLIOS' TOTAL
DISTRIBUTION.
** ITEMS (D), (E) AND (F) ARE BASED ON A PERCENTAGE OF ORDINARY INCOME
DISTRIBUTIONS OF THE PORTFOLIO.
</FN>
</TABLE>
Please consult your tax department for proper treatment of this information.
20
<PAGE>
REPORT OF INDEPENDENT AUDITORS
Board of Directors and Shareholders
CoreFunds, Inc.
We have audited the accompanying statement of net assets of the CoreFund
Fiduciary Tax-Free Reserve of CoreFunds, Inc. (the "Fund") as of June 30, 1996,
and the related statement of operations for the year then ended, and the
statements of changes in net assets and the financial highlights for each of the
years presented therein. These financial statements and financial highlights are
the responsibility of the Fund's management. Our responsibility is to express an
opinion on these financial statements and financial highlights based on our
audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements and financial highlights are
free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements. Our
procedures included verification by examination of securities held by the
Custodian as of June 30, 1996 and confirmation of securities not held by the
Custodian by correspondence with others. An audit also includes assessing the
accounting principles used and significant estimates made by management, as well
as evaluating the overall financial statement presentation. We believe that our
audit provides a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of the
CoreFund Fiduciary Tax-Free Reserve of CoreFunds, Inc. at June 30, 1996, the
results of its operations for the year then ended, the changes in its net assets
and the financial highlights for each of the years presented therein, in
conformity with generally accepted accounting principles.
Philadelphia, Pennsylvania
August 16, 1996
21
<PAGE>
This report and the financial statements contained herein are submitted for the
general information of the shareholders of the Corporation. The report is not
authorized for distribution to prospective investors in the Corporation unless
preceded or accompanied by an effective prospectus. Shares in the Fund are not
deposits or obligations of, or guaranteed or endorsed by, CoreStates Bank, N.A.,
the parent corporation of the Fund's investment adviser. Such shares are also
not federally insured by the Federal Deposit Insurance Corporation, the Federal
Reserve Board or any other agency.
COR-F-058-01
