[SQUARE BULLET]
COREFUND[REGISTERED MARK]
FAMILY OF MUTUAL FUNDS
- -------------------------
1997
ANNUAL REPORT
TO OUR
SHAREHOLDERS
YEAR ENDING JUNE 30, 1997
COREFUNDS...INVESTING OUR EXPERIENCE IN YOUR FUTURE.
<PAGE>
COREFUND
PORTFOLIOS
BY
ASSET
CLASS
[SQUARE BULLET] COREFUND
FUND TRADING SYMBOL
(A/C SHARES) (Y SHARES)
EQUITY FUNDS
[SQUARE BULLET] Equity Index -- VEIFX
[SQUARE BULLET] Core Equity CVERX CVEAX
[SQUARE BULLET] Growth Equity CRQAX CRGEX
[SQUARE BULLET] Special Equity CSPAX CSEQX
[SQUARE BULLET] International Growth CROAX CFIGX
BALANCED FUNDS
[SQUARE BULLET] Balanced COBAX CBAAX
FIXED INCOME FUNDS
[SQUARE BULLET] Short Term Income -- COSTX
[SQUARE BULLET] Short-Intermediate Bond CSIAX CFBDX
[SQUARE BULLET] Government Income CRIAX CRYIX
[SQUARE BULLET] Bond CBOAX CONIX
[SQUARE BULLET] Global Bond CRGAX CGBIX
TAX-EXEMPT INCOME FUNDS
[SQUARE BULLET] Intermediate Municipal Bond CRMAX CRMYX
[SQUARE BULLET] Pennsylvania Municipal Bond CPAAX CPAYX
[SQUARE BULLET] New Jersey Municipal Bond CNJAX CNJYX
MONEY MARKET FUNDS
[SQUARE BULLET] Treasury Reserve CTRXX CRTXX
[SQUARE BULLET] Cash Reserve -- CRCXX
[SQUARE BULLET] Tax-Free Reserve CXCXX CRXXX
TABLE OF CONTENTS
INVESTING FOR THE LONG TERM
INSIDE COVER
MESSAGE TO OUR SHAREHOLDERS
1
HOW TO USE YOUR
ANNUAL REPORT
2
GLOSSARY OF TERMS
4
CHOOSING THE RIGHT FUNDS
6
FUND DESCRIPTIONS
8
INVESTMENT ADVISERS' REVIEW
12
MANAGERS' DISCUSSIONS OF
FUND PERFORMANCE
16
REPORT OF INDEPENDENT AUDITORS
44
FINANCIAL STATEMENTS
45
SHAREHOLDER SERVICES
FOR MORE INFORMATION ON OPENING
A NEW ACCOUNT, MAKING CHANGES TO EXISTING ACCOUNTS, PURCHASING,
EXCHANGING OR REDEEMING SHARES,
OR OTHER INVESTOR SERVICES,
PLEASE CALL
1-800-355-CORE (2673) OR REFER TO YOUR FUND PROSPECTUS.
LIFT THIS FLAP AND
LEARN HOW LONG-TERM INVESTING CAN
HELP YOU REACH
YOUR GOALS.
[GRAPHIC OF POINTER]
<PAGE>
INVESTING FOR THE
LONG TERM
A LITTLE BIT TODAY
CAN TAKE YOU
A LONG WAY.
[GRAPHIC OF POINTER]
Throughout this report, we talk about investing for the long term --
setting financial goals, choosing your funds, and then staying with your plan
over a period of years. Why is this important? Because long-term investing can
truly help you reach your financial goals.
Whether you're investing for your retirement, a child's education, a
vacation home, or some other goal, the key is to start early. This way, you can
actually reduce the total amount you will need to save. That's because your
money will work for you as it compounds over the years. The more time you have,
the more you will benefit from compounding.
In addition, when you stay with your plan over time, you can minimize
the impact of short-term fluctuations in the market. Historically, the longer an
investment is held, the less it is affected by market ups and downs.
Finally, by investing the same amount each month, you can reduce the
average cost you pay per share. Your money will buy more shares when the price
is low and fewer shares when the price is high. This is a proven technique for
not over paying for your investment.
STOCKS HAVE OUTPERFORMED OVER THE LONG TERM.
HISTORICALLY, STOCKS HAVE EXPERIENCED GREATER SHORT-TERM VOLATILITY, BUT OVER
THE LONGER TERM, THEY HAVE OUTPERFORMED BONDS AND OTHER FIXED-INCOME
INVESTMENTS.
TIME CAN SMOOTH THE BUMPS ALONG THE WAY.
THE LONGER YOU HOLD YOUR INVESTMENT, THE LESS IT WILL BE IMPACTED BY SHORT-TERM
MARKET FLUCTUATIONS. THIS CHART ILLUSTRATES THE MAXIMUM AND MINIMUM RETURNS FOR
DIFFERENT INVESTMENT PERIODS. AN INVESTOR WITH A LONGER TIME HORIZON CAN AFFORD
TO ASSUME GREATER RISK IN EXCHANGE FOR POTENTIALLY GREATER LONG-TERM REWARDS.
REGULAR INVESTING IS A SIMPLE STRATEGY THAT WORKS OVER TIME.
THIS HYPOTHETICAL EXAMPLE ASSUMES MONTHLY INVESTMENTS OF $100, $300, AND $500,
RESPECTIVELY, GROWING AT A COMPOUNDED ANNUAL RATE OF RETURN OF 8%.
<PAGE>
[LINE GRAPH DEPICTING GROWTH OF $10,000 SINCE 1973]
SOURCE: SEI RESEARCH (S&P 500, IBBOTSON LONG TERM GOV'T BOND INDEX, IBBOTSON 30
DAY T-BILL INDEX). THIS ILLUSTRATION IS FOR HYPOTHETICAL PURPOSES ONLY AND DOES
NOT REPRESENT THE PERFORMANCE OF A PARTICULAR COREFUND. PAST PERFORMANCE IS NOT
INDICATIVE OF FUTURE RESULTS.
[BAR GRAPH DEPICTING REDUCTION OF RISK OVER TIME]
SOURCE: SEI RESEARCH (S&P 500, IBBOTSON INTERMEDIATE GOV'T BOND INDEX, IBBOTSON
30 DAY T-BILL INDEX). THIS ILLUSTRATION IS FOR HYPOTHETICAL PURPOSES ONLY AND
DOES NOT REPRESENT THE PERFORMANCE OF A PARTICULAR COREFUND. PAST PERFORMANCE IS
NOT INDICATIVE OF FUTURE RESULTS.
[CHART DEPICTING REGULAR INVESTING CAN HELP YOU REACH YOUR GOALS]
SOURCE: SEI RESEARCH . THIS ILLUSTRATION IS FOR HYPOTHETICAL PURPOSES ONLY AND
DOES NOT REPRESENT THE PERFORMANCE OF A PARTICULAR COREFUND.
<PAGE>
MESSAGE
TO OUR
SHAREHOLDERS
JUNE 30, 1997
[SQUARE BULLET] COREFUND
During the past year, CoreFund shareholders were rewarded with overall
strong performance as a healthy economy supported the funds' strategies. Despite
some early 1997 stock market volatility, we currently have the best of all
possible worlds in terms of market climate. Good economic growth, low inflation,
relatively low interest rates, and encouraging corporate earnings make
conditions ideal for continued market strength.
INVESTING FOR THE LONG TERM Fair weather or stormy, smart investors keep their
heads and resist the temptation to follow the latest hot stock or trendy mutual
fund. Studies have shown that jumping in and out of the market in reaction to
headlines simply doesn't pay off. If you stick with your investment plan, you
won't miss out on upward cycles. Sure, there will be some downward cycles. But
if you follow a consistent investment strategy, you are more likely to reap
market rewards over time.
[PHOTO OF EMIL J. MIKITY]
LEARNING ABOUT YOUR INVESTMENTS The best way to remain confident in your
investment plan is to learn as much as you can. To help make fund information
easier to read and understand, CoreFunds has created a "plain English"
prospectus. This prospectus explains mutual fund concepts and terms, putting
detailed fund- specific information at your fingertips.
Other good sources for fund information are the mutual fund ratings
services. CoreFunds is proud to have recently received 1-year ratings of A or
higher by Lipper for most of its equity funds and 5-Star Morningstar ratings for
the CoreFund Equity Index Fund.
LOOKING INTO THE NEXT CENTURY With the year 2000 approaching, the CoreFund
Family of Mutual Funds is well positioned to meet your present and future
investment needs. We have a full range of fund alternatives with well-defined
goals and investment strategies. And, we've assembled an exceptional portfolio
management team. As we work to grow our fund assets, we remain committed to
customer service excellence and the enhancement of investor education programs
that will help you meet your financial goals for the long term.
/S/ SIGNATURE
EMIL J. MIKITY
CHAIRMAN
1
<PAGE>
HOW TO USE YOUR
ANNUAL
REPORT
[GRAPHIC OF POINTER]
COREFUND SHARES ARE
CURRENTLY AVAILABLE IN
THREE DIFFERENT CLASSES:
CLASS Y SHARES
ARE FOR INSTITUTIONAL INVESTORS.
CLASS A SHARES
ARE FOR INDIVIDUALS INVESTING IN EQUITY AND FIXED INCOME FUNDS.
THEY OFFER A VARIETY OF SHAREHOLDER
SERVICING FEATURES, AS WELL AS
SOME ADDITIONAL FEES.
CLASS C SHARES
ARE FOR INDIVIDUALS INVESTING
IN MONEY MARKET FUNDS.
THEY OFFER A VARIETY OF SHAREHOLDER
SERVICING FEATURES, AS WELL AS
SOME ADDITIONAL FEES.
THE COREFUND 1997 ANNUAL REPORT In the pages that follow, you will read about
your specific funds, the economic trends of the past year, and the outlook going
forward. But the most significant message of this 1997 Annual Report has nothing
to do with market conditions or forecasts. Instead, we want to stress the
importance of staying with your sound, long-term investment plan through all
economic cycles.
WHAT YOU NEED TO KNOW
[SQUARE BULLET]
On the inside front cover, we discuss the reasons why investing over a
period of many years can help you reduce the amount of money you will need to
reach your goal, and how long-term investing can limit the impact of short-term
market fluctuations on your investment. Don't underestimate the importance of
starting your investment program early and saving on a regular basis. Take a few
minutes and read this section. It may help you learn about new ways to reach
your financial goals.
Also in this Annual Report, you will find the CoreStates Investment
Advisers' Review which provides insights into current economic conditions and a
global investment outlook. You will find a Manager's Discussion of Fund
Performance for each fund in the CoreFund Family of Funds. Each manager's
commentary presents a snapshot of fund performance for the 12-month period
ending June 30, 1997. The managers offer you insights into the investment
strategies they are employing and examine the current climate of specific
markets, as well as the market forces that are expected to prevail during the
first half of 1997.
2
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[SQUARE BULLET] COREFUND
QUICK FUND FACTS
Accompanying each commentary are boxes highlighting important fund
information:
[SQUARE BULLET] When a fund was opened
[SQUARE BULLET] Portfolio size
[SQUARE BULLET] Number of shares outstanding
[SQUARE BULLET] Average weighted maturity of a fund's fixed income holdings
(where applicable)
[SQUARE BULLET] Seven-day effective yield (where applicable)
PORTFOLIO COMPOSITION
For funds with equity holdings, the individual reports include listings
of the top five 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 these holdings are divided according to quality
ratings or maturity.
PERFORMANCE DATA EQUITY AND FIXED INCOME FUNDS
The performance box shows the average annual total 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 in value
of a hypothetical $10,000 investment over the lifetime of each fund. Performance
of both Y and A classes of each Fund is compared with a commonly used industry
index to show how the Fund's performance stacks up against the index.
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 a sales charge, also known as the load.
PERFORMANCE DATA MONEY MARKET FUNDS
The performance boxes show the six-month cumulative total return, 7-day
and 30-day yields for both classes Y and C as compared to the industry benchmark
that the fund manager uses to measure performance.
UNDERSTANDING FUND PERFORMANCE
[SQUARE BULLET]
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.
[GRAPHIC OF POINTER]
3
<PAGE>
GLOSSARY
OF TERMS
[GRAPHIC OF POINTER]
Various terms used in the fund reports are defined as follows:
CLASS Y/CLASS A&C CoreFund shares are currently offered in these classes. Class
Y shares are for institutional investors. Class A&C shares are for individuals,
and include added features such as shareholder servicing and automatic
investment plans, as well as some additional fees. Class C shares also offer
checkwriting privileges.
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.
DIVERSIFICATION is the spreading of investment risk by putting assets in a
wide-ranging portfolio of securities, such as a mutual fund.
DOLLAR-COST AVERAGING is an installment-purchase technique that involves
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 prices are low.
EXPENSE RATIO is the amount, expressed as a percentage of average assets, that
shareholders paid in the past year for mutual fund operating expenses and
management fees.
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").
HEDGE is a defensive investment strategy, often involving the buying or selling
of options, to offset possible losses and thereby to reduce risk.
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 measure 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.
4
<PAGE>
[SQUARE BULLET] COREFUND
LOAD refers to sales charges 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 sometimes assessed to recover costs
incurred through advertising, commission payments to brokers, or other expenses
associated with marketing and distributing a fund.
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.
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.
TOTAL RETURN shows how the value of an investment has changed from the
beginning to the end of a period, assuming that dividends and capital gains have
been reinvested. In the performance tables for equity and fixed income funds,
total return is shown on an "annualized" basis -- it assumes performance at a
constant rate for each year. In the performance boxes for money market funds,
the six-month total return is shown on a "cumulative" basis -- i.e., the total
return for the period from January 1, 1997 to June 30, 1997.
VOLATILITY is a description of how much the price of securities, such as mutual
funds, moves up or down within a given period.
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.
DEFINING THE TERMS
[SQUARE BULLET]
5
<PAGE>
CHOOSING
THE
RIGHT FUNDS
[GRAPHIC OF POINTER]
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, CoreFund makes it easy for you to adapt your individual investment
program to your changing needs.
THE RIGHT CHOICES FOR A WELL-ROUNDED INVESTMENT PLAN.
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.
FINDING THE RIGHT MIX OF RISK AND REWARD.
To help you align your portfolio's particular blend of stability and
return with your investment preferences, CoreFunds offers a broad array of
investment options.
DIVERSIFICATION
IS A WAY TO
MODERATE
YOUR RISK.
As illustrated at right, these funds fall into distinct categories that match
up with the various stages of the risk/return spectrum. By taking these factors
into consideration, you can fashion a well-rounded, diversified portfolio that
will help 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.
6
<PAGE>
[SQUARE BULLET] COREFUND
<TABLE>
MUTUAL FUND CATEGORIES
LOWER HIGHER
RISK RISK
<S> <C> <C> <C> <C>
INTERNATIONAL GROWTH [SQUARE BULLET] INTERNATIONAL GROWTH
INTERNATIONAL STOCK FUNDS
OFFER POTENTIALLY HIGHER
RETURNS, BUT CARRY SPECIAL
RISKS. THESE RISKS ARE
OUTLINED IN YOUR PROSPECTUS.
GROWTH [SQUARE BULLET] SPECIAL EQUITY
[SQUARE BULLET] GROWTH EQUITY
STOCK AND BALANCED FUNDS [SQUARE BULLET] CORE EQUITY
PURSUE LONG-TERM GROWTH. [SQUARE BULLET] EQUITY INDEX
THEY OFFER THE GREATEST GROWTH [SQUARE BULLET] BALANCED
POTENTIAL, BUT FLUCTUATE MORE
IN PRICE.
INTERNATIONAL INCOME [SQUARE BULLET] GLOBAL BOND
GLOBAL BOND FUNDS SEEK GROWTH AND
INCOME OFFERING POTENTIALLY HIGHER RETURNS
THAN DOMESTIC BONDS, BUT WITH LESS
STABILITY OF PRINCIPAL.
INCOME [SQUARE BULLET] BOND
[SQUARE BULLET] GOVERNMENT INCOME
INTERMEDIATE- AND LONG-TERM TAXABLE BOND [SQUARE BULLET] SHORT-INTERMEDIATE BOND
FUNDS SEEK A MODERATE-TO-HIGH LEVEL OF [SQUARE BULLET] SHORT TERM INCOME
INCOME AND PRESERVATION OF CAPITAL.
TAX-FREE INCOME [SQUARE BULLET] INTERMEDIATE MUNICIPAL BOND
[SQUARE BULLET] PENNSYLVANIA MUNICIPAL BOND
THESE FUNDS SEEK TO PROVIDE INCOME THAT [SQUARE BULLET] NEW JERSEY MUNICIPAL BOND
IS GENERALLY EXEMPT FROM INCOME TAX,
WHILE PRESERVING CAPITAL.
STABILITY [SQUARE BULLET] TREASURY RESERVE
[SQUARE BULLET] CASH RESERVE
MONEY MARKET FUNDS SEEK GREATER SAFETY [SQUARE BULLET] TAX-FREE RESERVE
AND STABILITY OF PRINCIPAL WHILE
PROVIDING INCOME.
LOWER HIGHER
RETURN RETURN
RISK/RETURN SPECTRUM
</TABLE>
7
<PAGE>
FUND
DESCRIPTIONS
JUNE 30, 1997
[SQUARE BULLET] EQUITY (STOCK) FUNDS
INVEST PRIMARILY IN SECURITIES SUCH AS COMMON STOCKS. THESE FUNDS SEEK MAXIMUM
LONG-TERM GAINS THROUGH CAPITAL APPRECIATION.
<TABLE>
OBJECTIVE FOR A LONG-TERM INVESTOR WHO IS LOOKING FOR...
<S> <C> <C>
[SQUARE BULLET] EQUITY Seeks to achieve price and yield ...results substantially in line with the performance
INDEX FUND performance similar to the S&P 500 of the stock market as a whole.
Composite Index.
[SQUARE BULLET] CORE EQUITY Seeks growth of capital by investing ...growth of capital and is willing to take higher
FUND primarily in a diversified portfolio risk for potentially higher returns.
of common stocks.
[SQUARE BULLET] GROWTH Seeks growth of capital and an ...capital appreciation and is willing to take higher
EQUITY FUND increasing flow of dividends from risk for potentially higher returns.
a diversified portfolio of common
stocks.
[SQUARE BULLET] SPECIAL Seeks capital growth by investing ...growth of capital and is willing to take higher risk
EQUITY FUND principally in a diversified and experience greater volatility for potentially higher
portfolio of common stocks. returns.
[SQUARE BULLET] INTERNATIONAL Seeks long-term growth of capital ...growth of capital and is willing to assume the
GROWTH FUND by investing in a portfolio of additional risks inherent in foreign investing in
common stocks diversified by country exchange for potentially higher returns.
and industry.
</TABLE>
8
<PAGE>
[SQUARE BULLET] COREFUND FAMILY OF MUTUAL FUNDS
[SQUARE BULLET] BALANCED FUND
INVESTING IN BOTH COMMON STOCKS AND FIXED INCOME. THIS FUND SEEKS TO PROVIDE
TOTAL RETURN WHILE PRESERVING CAPITAL.
<TABLE>
OBJECTIVE FOR A LONG-TERM INVESTOR WHO IS LOOKING FOR...
<S> <C> <C>
[SQUARE BULLET] BALANCED FUND Seeks to provide total return while ...participation in a diversified portfolio program
preserving capital. that is continuously and professionally managed and is
willing to take higher risk for potentially higher returns.
[SQUARE BULLET] FIXED INCOME (BOND) FUNDS
INVEST 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.
[SQUARE BULLET] SHORT TERM Seeks consistent current income ...higher yield than can be expected from either cash
INCOME FUND and relative stability of principal by management funds or other short-term investments,
investing primarily in a diversified but with less volatility than most longer-term bond funds.
portfolio of investment-grade debt
securities with remaining maturities
of three years or less.
[SQUARE BULLET] SHORT- Seeks consistent current income by ...higher yield than can be expected from other
INTERMEDIATE investing principally in a short-term investments but without the wide swings
BOND FUND diversified portfolio of debt normally attributable to long-term bond funds.
securities with an average weighted
maturity of two to five years.
</TABLE>
9
<PAGE>
FUND
DESCRIPTIONS
(CONTINUED)
JUNE 30, 1997
[SQUARE BULLET] FIXED INCOME (BOND) FUNDS (CONTINUED)
<TABLE>
OBJECTIVE FOR A LONG-TERM INVESTOR WHO IS LOOKING FOR...
<S> <C> <C>
[SQUARE BULLET] GOVERNMENT Seeks to provide current income while ...investment performance and can tolerate the risk
INCOME FUND preserving principal value and from an actively managed portfolio of taxable fixed-income
maintaining liquidity. securities without credit risk.
[SQUARE BULLET] BOND FUND Seeks to maximize long-term total ...investment performance and can tolerate the associated
return by investing principally in a risk from an actively managed portfolio of taxable fixed
diversified portfolio of debt income securities.
securities.
[SQUARE BULLET] GLOBAL Seeks to provide capital appreciation ...capital appreciation and current income over the
BOND FUND and current income through investment long term, and is willing to assume the additional
in fixed income securities of the risks of foreign investing for potentially higher returns,
United States and foreign issuers. and seeks benefits of international diversification.
[SQUARE BULLET] TAX-EXEMPT INCOME FUNDS
INVEST 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.
[SQUARE BULLET] INTERMEDIATE Seeks a high level of income exempt ...a conservative investment and seeks after-tax
MUNICIPAL from federal income tax consistent yields while protecting principal.
BOND FUND with the preservation of capital.
[SQUARE BULLET] PENNSYLVANIA Seeks a high level of current income, ...a moderate rate of tax-free income with less price
MUNICIPAL consistent with the preservation of volatility than long-term municipal bonds and the
BOND FUND capital, that is exempt from PA state enhanced investment performance of an actively managed
and local personal income tax. portfolio of tax-free securities.
</TABLE>
10
<PAGE>
[SQUARE BULLET] COREFUND FAMILY OF MUTUAL FUNDS
[SQUARE BULLET] TAX-EXEMPT INCOME FUNDS (CONTINUED)
<TABLE>
OBJECTIVE FOR A LONG-TERM INVESTOR WHO IS LOOKING FOR...
<S> <C> <C>
[SQUARE BULLET] NEW JERSEY Seeks a high level of current income ...a moderate rate of tax-free income with less price
MUNICIPAL consistent with the preservation of volatility than long-term municipal bonds and the
BOND FUND capital, that is exempt from New Jersey enhanced investment performance of an actively managed
state and local personal income tax. portfolio of tax-free securities.
[SQUARE BULLET] MONEY MARKET FUNDS
INVEST 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.
[SQUARE BULLET] TREASURY Seeks current income with liquidity ...liquidity of assets, current income, and
RESERVE and stability of principal, with stability of principal.
investments exclusively in U.S.
Treasury obligations.
[SQUARE BULLET] CASH RESERVE Seeks current income with liquidity ...liquidity of assets, current income, and
and stability of principal. stability of principal.
[SQUARE BULLET] TAX-FREE Seeks current income that is exempt ...current income exempt from federal income taxes,
RESERVE from regular income tax with stability of principal, and liquidity of assets.
liquidity and stability of principal.
</TABLE>
11
<PAGE>
CORESTATES
INVESTMENT
ADVISERS'
REVIEW
JUNE 30, 1997
ABOUT CORESTATES
INVESTMENT ADVISERS
(CSIA)
[SQUARE BULLET] INVESTMENT MANAGERS FOR THE
COREFUND FAMILY OF MUTUAL
FUNDS.
[SQUARE BULLET] MANAGING MORE THAN $17.6
BILLION IN ASSETS, INCLUDING NEARLY
$4 BILLION IN COREFUNDS.
[SQUARE BULLET] AN AFFILIATE OF CORESTATES
FINANCIAL CORP, ONE OF THE
NATION'S LARGEST AND MOST
RESPECTED BANKING INSTITUTIONS.
[SQUARE BULLET] DEDICATED TO PROVIDING ITS
INVESTORS WITH PROFESSIONAL
INVESTMENT MANAGEMENT.
[SQUARE BULLET] SERVING THE NEEDS OF INSTITUTIONS,
CORPORATIONS, MUNICIPALITIES, AND
INDIVIDUAL INVESTORS.
[SQUARE BULLET] SUPPORTING YOU WITH INVESTMENT
EXPERTISE FOR THE LONG TERM.
COREFUND INVESTMENT REVIEW
We are pleased to report another solid year of investment returns for
the CoreFund Family of Mutual Funds. Taking advantage of a strong U.S. economy
and generally favorable conditions throughout the world, the Fund managers
produced overall positive returns for equity, fixed income, and money market
fund shareholders for the fiscal year ending June 30, 1997.
In the first quarter, real Gross Domestic Product (GDP) grew at an
annual rate of 5.9%, reducing unemployment and raising personal incomes and
corporate profits. Despite market forecasts and Federal Reserve expectations,
inflation remained low. This combination of strong economic growth and low
inflation remains the basis for continued strength in U.S. stock prices.
While long term interest rates rose modestly in the last six months,
they have remained fairly steady in recent quarters. This pattern has provided
investors with adequate, though hardly spectacular returns. After a slight
(.25%) increase in the closely watched Federal funds rate engineered by the
Federal Reserve in March, short-interest rates have been steady. No additional
Federal Reserve actions are expected for some time.
International markets have generally followed the bullish tone set in the
U.S., with equity prices higher in most markets. Interest rates in international
markets were relatively stable, but the stronger U.S. dollar hurt returns for
dollar-based investors.
[BAR GRAPH DEPICTING CAPITAL MARKET RETURNS]
CAPITAL MARKET RETURNS
(% OF TOTAL RETURN)
FULL YEAR (6/96-6/97) FIRST SIX MONTHS `97
DJIA 38.61 20.12
S&P 500 34.68 20.60
SBBI 8.15 3.06
JPMGB 9.28 4.02
EAFE 12.85 11.21
DJIA = DOW JONES INDUSTRIAL AVERAGE
S&P 500 = STANDARD & POOR'S COMPOSITE INDEX
SBBI = SALOMON BROTHERS BROAD BOND INDEX
JPMGB = JP MORGAN GLOBAL BOND INDEX, US$ HEDGED
EAFE = MORGAN STANLEY EUROPE, AUSTRALIA AND FAR EAST INDEX
12
<PAGE>
[SQUARE BULLET] COREFUND
EQUITY REVIEW
For the first six months of the calendar year 1997 (the last six months of
the Funds' fiscal year), the U.S. stock market continued to build on one of the
greatest bull markets in history. The large capitalization S&P 500 Index (S&P)
produced a return of 20.6%, after an 11.7% return in the prior six months. For
the full fiscal year ended June 30, 1997, the S&P showed a total return of
34.7%.
Although larger stocks, represented by the S&P, significantly
outperformed the broader market, mid-cap and small cap stocks reported more
modest returns. The Russell 3000 Equal Weighted Index, which includes mid-cap
and small cap stocks, produced returns of 11.2% and 17.0% over the six and
twelve month periods, respectively.
U.S. stock prices continue to benefit from low inflation, stable
interest rates, and strong profit growth. As long as these positive factors
continue, the market should prove resistant to any sustained selling pressure,
as was shown following the market's weakness in March and early April.
[PHOTO OF MARK E. STALNECKER, CHAIRMAN CSIA]
[LINE GRAPH DEPICTING CHANGES IN THE YIELD CURVE]
BOND AND MONEY MARKET REVIEW
After falling slightly in the first six months of the Funds' fiscal year,
long-term Treasury rates rose modestly in the first half of 1997. The increase
in the target Federal funds rate from 5.25% to 5.5% in March was a response by
Federal Reserve policy makers to the strong economic growth experienced in the
first quarter of 1997 and fears of accelerating inflation.
(CONTINUED)
13
<PAGE>
CORESTATES
INVESTMENT
ADVISERS'
REVIEW
(CONCLUDED)
JUNE 30, 1997
However, subsequent slowing in growth and subdued inflation reassured investors,
and long-term rates fell from their early 1997 levels to end June only slightly
higher than they had been at the end of 1996.
For the Funds' full year, longer-term rates declined. The total return
for fixed income assets, as measured by the Salomon Brothers Broad Bond Index,
was 8.1%. Returns for the Index for the last half of the Funds' fiscal year were
3.1%. With the positive current inflation trends, interest rates should remain
relatively stable, and some further decline in long-term rates is possible.
[BAR GRAPH DEPICTING STOCKS -- INTERNATIONAL VS. DOMESTIC]
STOCKS -- INTERNATIONAL VS. DOMESTIC
(% OF TOTAL RETURN AS OF 6/30/97)
S&P 500 EAFE
1 YR. 34.68 12.85
2 YR. 30.26 13.06
3 YR. 28.83 9.13
4 YR. 21.34 11.05
5 YR. 19.75 12.83
S&P 500 = STANDARD & POOR'S 500 COMPOSITE INDEX
EAFE = MORGAN STANLEY EUROPE, AUSTRALIA AND FAR EAST INDEX
INTERNATIONAL REVIEW
International markets continue to underperform the United States. For the
Funds' full fiscal year ended June 30, 1997, international equity returns
(measured in U.S. dollars) on the Morgan Stanley EAFE Index were 12.9%. Most of
this return (11.2%) was generated in the last six months, following weaker
returns in 1996.
Foreign markets were generally strong in local currency terms and the
Japanese market, while weak over the full year, began to show signs of strength
late in the period amid uncertainties regarding European common currency
developments. However, strength in the dollar certainly had a negative impact on
equity returns for dollar-based investors.
OVERALL MARKET OUTLOOK
Consistent strong economic fundamentals are cause for optimism about
the overall investment outlook, although with stock prices at current
valuations, the market is vulnerable to negative surprises. The surprise could
be higher inflation or possibly lower growth, led by earnings disappointments.
But even with this note of caution, longer-term demographic trends and worldwide
economic competition continue to provide an excellent backdrop for investors.
14
<PAGE>
[SQUARE BULLET] CORE FUND
[GRAPHIC OF POINTER]
As we have always recommended, the best course of action is to stay
with your long-term investment plan. Although future returns may not match the
returns seen in the past decade, this approach should reward investors with
solid long-term real returns that approximate historical averages.
Thank you for investing in the CoreFund Family of Mutual Funds. As
always, we are committed to providing you with strong returns as we work to help
you meet your investment objective.
/S/ SIGNATURE
MARK E. STALNECKER
CHAIRMAN, CSIA
15
<PAGE>
MANAGERS'
DISCUSSION
OF
FUND
PERFORMANCE
JUNE 30, 1997
COREFUND EQUITY MANAGERS
LARY AASHEIM
EQUITY INDEX
STEPHEN DALTON
GROWTH EQUITY AND BALANCED
(MANAGERS NOT SHOWN)
JOSEPH STOCKE
CORE EQUITY & SPECIAL EQUITY
MICHAEL GIBSON
MARTIN CURRIE, INC.
AND
BEVERLY HENDRY
ABERDEEN MANAGERS
INTERNATIONAL GROWTH
[PHOTO OF LARY AASHEIM AND STEPHEN DALTON]
16
<PAGE>
[SQUARE BULLET] COREFUND
[SQUARE BULLET] EQUITY INDEX FUND
[GRAPHIC OF POINTER]
ANNUAL RESULTS
[SQUARE BULLET] This Fund returned 34.44% after expenses for the year ending
June 30, 1997.
[SQUARE BULLET] The Fund's benchmark, the S&P 500 Composite Index (S&P 500),
returned 34.68% for the same period.
[SQUARE BULLET] Assets in the Fund grew 47.9% from $166.3 million to $245.9
million during the year.
COMMENTARY
The CoreFund Equity Index Fund is a good alternative for investors who want to
invest in stocks, but don't want the risks associated with a specific equity
management style. The Fund strives to be a pure mirror of the S&P 500 Index.
Working toward this goal, we invest in approximately 430 of the stocks included
in the Index.
The factors that influence the Fund's ability to track index
performance are cash management and transaction cost management. We tightly
manage the Fund's cash portion to greatly increase its ability to track the
index.
We take advantage of opportunities to keep transaction costs as low as
possible at all times because they can have a negative impact on performance.
Over the past year, we have improved the Fund's ability to track the index, and
produce positive returns for investors. As an index fund, the Fund is not
managed in terms of market conditions. However, our outlook for the coming
months is for a stable, low interest rate environment and reasonable economic
growth. These conditions should prove to be healthy for the S&P 500 Index and
therefore encouraging for the Fund's performance.
[SQUARE BULLET]
AVERAGE ANNUAL TOTAL RETURN1
----------------------------------------
1 YEAR 5 YEAR 10 YEAR
----------------------------------------
CLASS A SYNTHETIC YIELDS
CLASS Y 34.44% 18.90% 13.43%
CLASS A W/O LOAD 34.37% 18.89% 13.42%
CLASS A W/LOAD 26.97% 17.55% 12.79%
----------------------------------------
[LINE GRAPH DEPICTING COMPARISON OF CHANGE IN VALUE OF $10,00 INVESTMENT]
COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT (DOLLARS IN THOUSANDS)
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
2/28/95 6/85 6/86 6/87 6/88 6/89
EQUITY INDEX CLASS Y 10,000 10,867 14,507 17,828 16,248 19,238
EQUITY INDEX CLASS A 9,450 10,270 13,709 16,847 15,354 18,180
(SYNTHETIC)
S&P 500 COMPOSITE INDEX 10,000 10,742 14,590 18,262 16,996 20,481
<S> <C> <C> <C> <C> <C> <C> <C> <C>
6/90 6/91 6/92 6/93 6/94 6/95 6/96 6/97
EQUITY INDEX CLASS Y 21,906 23,498 26,450 29,727 29,891 37,199 46,755 62,858
EQUITY INDEX CLASS A 20,701 22,206 24,995 28,092 28,247 35,153 44,184 59,369
(SYNTHETIC)
S&P 500 COMPOSITE INDEX 23,852 25,610 29,052 33,005 33,461 42,171 53,127 71,551
<FN>
1 FOR THE PERIOD ENDED JUNE 30, 1997. PAST PERFORMANCE IS NOT PREDICTIVE OF
FUTURE PERFORMANCE. INDIVIDUAL CLASS A SHARES WERE OFFERED BEGINNING
OCTOBER 9, 1996. THE PERFORMANCE SHOWN FOR EQUITY INDEX PORTFOLIO CLASS A
SHARES (SYNTHETIC) PERIOD TO THAT DATE IS BASED ON THE PERFORMANCE OF
INSTITUTIONAL CLASS Y SHARES, ADJUSTED TO REFLECT THE MAXIMUM SALES CHARGE
OF 5.50% FOR THE CLASS A SHARES. 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.
</FN>
</TABLE>
EQUITY INDEX FUND
----------------
QUICK FUND FACTS
----------------
INCEPTION DATE:
FEBRUARY 14, 1985
PORTFOLIO SIZE:
$245.9 MILLION
SHARES OUTSTANDING:
6,576,837 (Y&A COMBINED)
TOP FIVE HOLDINGS
----------------
(% OF FUND INVESTMENTS)
GENERAL ELECTRIC
3.2%
COCA-COLA
2.6%
MICROSOFT
2.3%
EXXON
2.3%
MERCK & COMPANY
1.9%
17
<PAGE>
MANAGERS'
DISCUSSION
OF
FUND
PERFORMANCE
(CONTINUED)
JUNE 30, 1997
CORE EQUITY FUND
----------------
QUICK FUND FACTS
----------------
INCEPTION DATE:
FEBRUARY 28, 1990
PORTFOLIO SIZE:
$531.1 MILLION
SHARES OUTSTANDING:
25,155,234 (Y&A COMBINED)
TOP FIVE HOLDINGS
----------------
(% OF FUND INVESTMENTS)
WORLDCOM
4.5%
AIRTOUCH COMMUNICATIONS
4.4%
LILLY ELI & COMPANY
3.3%
GENERAL ELECTRIC
2.9%
IBM
2.7%
[SQUARE BULLET] CORE EQUITY FUND
ANNUAL RESULTS
[SQUARE BULLET] This Fund returned 33.10% after expenses for the year ending
June 30, 1997.
[SQUARE BULLET] The Fund's benchmark, the S&P 500 Index, returned 34.68% for
the same period.
[SQUARE BULLET] Assets in the Fund grew 24.7% from $426.0 million to $531.1
million during the year.
COMMENTARY
Throughout the year, the CoreFund Core Equity Fund produced positive results for
shareholders while slightly underperforming its benchmark. With interest rates
and inflation rates stable, the Fund benefited from overall strong performance
in the technology sector. Although technology experienced a correction in
December of 1996, the Fund gained in this area for the year due to superior
stock selection and the sector's overperformance during the second quarter of
1997.
We continued our overweighting in IBM. Microsoft and Intel were also
strong contributors. And, we benefited from our holdings in Lucent, a company
spun off from AT&T that supplies equipment to telecommunications companies.
Healthcare stocks also contributed to the Fund's performance, as we
benefited from our holdings in Lilly Eli. In contrast, although underweighted in
this area, the Fund was hurt by poor performance in the utilities sector.
AVERAGE ANNUAL TOTAL RETURN1
------------------------------------------------
1 YEAR 5 YEAR INCEPTION
------------------------------------------------
CLASS Y (SYNTHETIC) 33.10% 18.74% 18.03%
CLASS A W/O LOAD 32.74% 18.64% 17.96%
CLASS A W/LOAD 25.41% 17.31% 17.06%
------------------------------------------------
[LINE GRAPH DEPICTING COMPARISON OF CHANGE IN VALUE OF $10,00 INVESTMENT]
COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT (DOLLARS IN THOUSANDS)
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
2/28/90 6/90 6/91 6/92 6/93 6/94 6/95 6/96 6/97
CORE EQUITY CLASS Y 10,000 10,964 11,978 14,285 16,109 16,352 19,814 25,338 33,725
(SYNTHETIC)
CORE EQUITY CLASS A 9,450 10,361 11,319 13,499 15,223 15,453 18,710 23,908 31,735
S&P 500 COMPOSITE INDEX 10,000 10,910 11,714 13,288 15,097 15,305 19,289 24,300 32,727
<FN>
1 FOR THE PERIOD ENDED JUNE 30, 1997. PAST PERFORMANCE OF THE PORTFOLIO IS NOT
PREDICTIVE OF FUTURE PERFORMANCE. INDIVIDUAL CLASS Y SHARES WERE OFFERED
BEGINNING FEBRUARY 21, 1995. THE PERFORMANCE SHOWN FOR CORE EQUITY PORTFOLIO
CLASS Y SHARES (SYNTHETIC) PERIOD TO THAT DATE IS BASED ON THE PERFORMANCE OF
INDIVIDUAL CLASS A SHARES, WITHOUT THE MAXIMUM SALES CHARGE OF 5.50% FOR THE
CLASS A SHARES. CLASS A SHARES OF THE CORE EQUITY PORTFOLIO COMMENCED
OPERATIONS ON FEBRUARY 28, 1990.
</FN>
</TABLE>
During the year, we saw positive performance in our consumer cyclical stock
holdings, especially from General Nutrition, although the sector as a whole
underper-
18
<PAGE>
[SQUARE BULLET] CORE FUND
formed. Also, the impact of a strong U.S. dollar on multi-national companies
made us cautious about certain drug and auto companies.
[GRAPHIC OF POINTER]
Looking ahead, we expect the stock market to continue to be strong.
Demographics are working in favor of the market as are low inflation, declining
interest rates, a budget agreement which includes tax cuts, strong mutual fund
cash flows, and robust corporate profits. We will continue our strategy of
creating a diversified portfolio of large and mid-capitalization companies with
strong fundamentals.
[SQUARE BULLET]
[SQUARE BULLET] GROWTH EQUITY FUND
ANNUAL RESULTS
[SQUARE BULLET] This Fund returned 21.67% for the year ending June 30, 1997.
[SQUARE BULLET] The Fund's benchmark, the Lipper Growth Fund Index, returned
25.57% for the same period. The S&P 500 Index returned 34.68%
for the twelve months.
[SQUARE BULLET] Assets in the Fund grew 23.7% from $123.2 million to $152.4
million during the year.
COMMENTARY
The CoreFund Growth Equity Fund, while slightly underperforming its benchmark,
produced positive returns for investors. It was a mixed year of performance in
its sector of the stock market. After turning in strong performance from June
30, 1996 through November of 1996, the Fund ran into difficulty toward the end
of the first half of its fiscal year. Overweighted in technology stocks, it was
impacted by a correction in the technology sector in December of 1996. The first
quarter of 1997 was also volatile, as the market reacted to the first increase
in the Federal Funds rate in two years.
GROWTH EQUITY FUND
------------------
QUICK FUND FACTS
------------------
INCEPTION DATE:
FEBRUARY 3, 1992
PORTFOLIO SIZE:
$152.4 MILLION
SHARES OUTSTANDING:
9,878,488 (Y&A COMBINED)
TOP FIVE HOLDINGS
------------------
(% OF FUND INVESTMENTS)
ORACLE
2.6%
INTEL
2.5%
HOME DEPOT
2.5%
DAYTON HUDSON
2.5%
HALLIBURTON
2.4%
19
<PAGE>
MANAGERS'
DISCUSSION
OF
FUND
PERFORMANCE
(CONTINUED)
JUNE 30, 1997
[SQUARE BULLET] GROWTH EQUITY (CONTINUED)
[GRAPHIC OF POINTER]
However, we maintained our position and the situation reversed. The
Fund benefited from its positioning in the second quarter of 1997 and
performance has been dynamic. The same overweighting in technology stocks that
hurt the Fund earlier is now responsible for its recent outperformance.
In addition to technology stocks, including such companies as Oracle,
Cisco Systems, Microsoft, Intel, and Motorola, the Fund is well-diversified into
other growth stock sectors. These sectors include healthcare, retail, consumer,
and financial stocks. We remain committed to our strategy of investing in high
quality, large-to-medium capitalization stocks of well-managed growth companies.
Looking ahead, the outlook for the stock market remains very positive.
Therefore, we're maintaining a fully invested position. We expect to see modest
economic growth, almost non-existent inflation, and no need for the Federal
Reserve to raise interest rates. We're also seeing some very strong corporate
profits reports. In short, the current outlook for equities appears to be very
encouraging.
[SQUARE BULLET]
AVERAGE ANNUAL TOTAL RETURN1
-----------------------------------------
1 YEAR 5 YEAR INCEPTION
CLASS Y 21.67% 15.86% 11.90%
CLASS A W/O LOAD 21.29% 15.62% 11.69%
CLASS A W/ LOAD 14.65% 14.32% 10.53%
-----------------------------------------
[LINE GRAPH DEPICTING COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT]
COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT [DOLLARS IN THOUSANDS]
<TABLE>
2/28/92 6/92 6/93 6/94 6/95 6/96 6/97
<S> <C> <C> <C> <C> <C> <C> <C>
GROWTH EQUITY CLASS Y 10,000 8,795 10,093 9,285 11,487 15,090 18,359
GROWTH EQUITY CLASS A
(SYNTHETIC) 9,450 8,311 9,538 8,763 10,817 14,170 17,187
S&P 500 COMPOSITE INDEX 10,000 9,992 11,352 11,508 14,504 18,272 24,608
LIPPER GROWTH FUNDS INDEX 10,000 9,494 11,067 11,254 13,857 16,718 20,993
<FN>
1 FOR THE PERIOD ENDED JUNE 30, 1997. 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) PERIOD TO THAT DATE IS BASED ON THE PERFORMANCE OF
INSTITUTIONAL CLASS Y SHARES, ADJUSTED TO REFLECT THE MAXIMUM SALES CHARGE OF
5.50% FOR THE CLASS A SHARES. CLASS Y SHARES OF THE GROWTH EQUITY PORTFOLIO
COMMENCED OPERATIONS ON FEBRUARY 3, 1992.
</FN>
</TABLE>
20
<PAGE>
[SQUARE BULLET] COREFUND
[SQUARE BULLET] SPECIAL EQUITY FUND
ANNUAL RESULTS
[SQUARE BULLET] This Fund returned 17.94% for the year ending June 30, 1997.
[SQUARE BULLET] The Fund's benchmark, the Russell 3000 Equal Weighted Index,
returned 17.03% for the same period.
[SQUARE BULLET] Assets in the Fund grew 14.7% from $64.8 million to $74.3
million during the year.
COMMENTARY
During the last year, CoreFund Special Equity Fund produced positive results for
shareholders while slightly outperforming its benchmark. The approach of this
Fund is very issue-specific, relying on company fundamentals. We work to choose
the very best stocks for the Fund, without concern for sector diversification.
[GRAPHIC OF POINTER]
With interest rates and inflation rates stable, the Fund benefited from
overall strong performance in the technology sector. Although technology
experienced a correction in December of 1996, the Fund gained in this area for
the year due to superior stock selection and the sector's overperformance during
the second quarter of 1997.
We continued our overweighting in IBM. Microsoft and Intel were also
strong contributors. Another stock that has performed well for the Fund is
Teradyne, a supplier of test equipment for the electronics industry. And, we
benefited from our holdings in Lucent, a company spun off from AT&T that
supplies equipment to telecommunications companies.
Healthcare stocks also contributed to the Fund's performance. The Fund
benefited from holdings in Guilford
AVERAGE ANNUAL TOTAL RETURN1
-----------------------------------------------
1 YEAR 3 YEAR INCEPTION
CLASS Y (SYNTHETIC) 17.94% 25.29% 17.31%
CLASS A W/O LOAD 17.73% 25.16% 17.20%
CLASS A W/LOAD 11.25% 22.83% 15.22%
-----------------------------------------------
[LINE GRAPH DEPICTING COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT]
COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT [DOLLARS IN THOUSANDS]
3/31/94 6/94 6/95 6/96 6/97
SPECIAL EQUITY CLASS Y
(SYNTHETIC) 10,000 9,279 11,363 15,477 18,253
SPECIAL EQUITY CLASS A 9,450 8,769 10,735 14,605 17,194
FRANK RUSSELL 3000 INDEX
(EQUALLY WEIGHTED) 10,000 9,645 11,773 14,711 17,216
1 FOR THE PERIOD ENDED JUNE 30, 1997. 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) PERIOD TO THAT DATE IS BASED ON THE
PERFORMANCE OF INDIVIDUAL CLASS A SHARES, WITHOUT THE MAXIMUM SALES CHARGE
OF 5.50% FOR THE CLASS A SHARES. CLASS A SHARES OF THE SPECIAL EQUITY
PORTFOLIO COMMENCED OPERATIONS ON MARCH 15, 1994.
SPECIAL EQUITY FUND
-------------------
QUICK FUND FACTS
-------------------
INCEPTION DATE
MARCH 15, 1994
PORTFOLIO SIZE:
$74.3 MILLION
SHARES OUTSTANDING:
6,594,766 (Y&A COMBINED)
TOP FIVE HOLDINGS
-------------------
(% OF FUND INVESTMENTS)
KUHLMAN
2.2%
SCIOS NOVA
1.9%
VDI MEDIA
1.8%
EVEREST REINSURANCE HOLDINGS
1.7%
INTEL
1.7%
21
<PAGE>
MANAGERS'
DISCUSSION
OF
FUND
PERFORMANCE
(CONTINUED)
JUNE 30, 1997
[SQUARE BULLET] SPECIAL EQUITY (CONTINUED)
Pharmaceuticals, a biotechnology company focusing on new ways of delivering
cancer drugs directly into tumors.
During the year, we saw positive performance in our consumer cyclical stock
holdings, especially from General Nutrition, although the sector as a whole
underperformed. Also, the impact of a strong U.S. dollar on multi-national
companies made us cautious about certain drug and auto companies.
Looking ahead, we expect the stock market to continue to be strong.
Demographics are working in favor of the market as are low inflation, declining
interest rates, a budget agreement which includes tax cuts, strong mutual fund
cash flows, and robust corporate profits. [SQUARE BULLET]
[SQUARE BULLET] INTERNATIONAL GROWTH FUND
ANNUAL RESULTS
[SQUARE BULLET] This Fund returned 15.43% for the year ending June 30, 1997.
[SQUARE BULLET] The Fund's benchmark, the Morgan Stanley Capital International
EAFE Index, returned 12.85% for the same period.
[SQUARE BULLET] Assets in the Fund grew 17.1% from $141.4 million to $165.6
million during the year.
[GRAPHIC OF POINTER]
COMMENTARY
The CoreFund International Growth Fund outperformed its benchmark and provided
healthy returns for investors. The Fund is co-managed by Martin Currie, Inc.
(80% of Fund Assets) and Aberdeen Managers (20% of Fund Assets), providing the
portfolio with an added level of diversification. Both managers do extensive
research on individual companies throughout the world. By visiting over 2,000
companies a year from their international offices, they learn about each
company's facilities, products, balance sheets, and management within the
context of its local market and economy. A combination of micro and macro
economic factors are considered when making buy and sell decisions for the Fund.
22
<PAGE>
[SQUARE BULLET] COREFUND
INTERNATIONAL MARKET OVERVIEW
The UK market benefited from a stronger currency as the economy began
experiencing an earlier recovery than the rest of Europe. Financial stocks
dominated returns. However, there is concern about the continued strength of the
sterling in the coming months and its impact on forecasts.
The European markets made good progress throughout the period, although
recovery is far behind North America. In spite of uncertainty over the European
Monetary Union, the improved outlook for corporate profits pushed share prices
up. Although this market is benefiting from corporate restructuring and an
emphasis on shareholder value, for U.S. dollar-based investors, returns weren't
as good as they were in local currency terms.
The Japanese market suffered during the first six months of this period,
but began to show signs of improvement at the beginning of 1997. Gains, however,
have been aided greatly by the yen strengthening significantly on the back of
possible interest rate rises. Companies which have already restructured and are
competitive globally, such as in electronics, have performed well with increases
in earnings.
Among the Asia Pacific Region markets, Hong Kong remained the best of the
major markets. Despite Hong Kong's hand over to China, there were many
opportunities for strong returns. In contrast, Thailand, Malaysia, Korea, and
Singapore were consistently disappointing throughout the year.
AVERAGE ANNUAL TOTAL RETURN1
-----------------------------------------------
1 YEAR 5 YEAR INCEPTION
CLASS Y 15.43% 11.87% 9.57%
CLASS A W/O LOAD 15.09% 11.67% 9.44%
CLASS A W/LOAD 8.78% 10.42% 8.60%
-----------------------------------------------
[LINE GRAPH DEPICTING COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT]
COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT [DOLLARS IN THOUSANDS]
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
2/28/90 6/90 6/91 6/92 6/93 6/94 6/95 6/96 6/97
INTERNATIONAL EQUITY
CLASS Y 10,000 10,985 10,688 11,210 12,562 14,611 14,581 17,018 19,644
INTERNATIONAL EQUITY
CLASS A (SYNTHETIC) 9,450 10,381 10,100 10,594 11,907 13,824 13,758 16,034 18,453
MORGAN STANLEY MSCI EAFE
INDEX 10,000 9,814 8,682 8,626 10,375 12,138 12,341 13,980 15,776
<FN>
1 FOR THE PERIOD ENDED JUNE 30, 1997. 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) PERIOD TO THAT DATE IS BASED ON THE
PERFORMANCE OF INSTITUTIONAL CLASS Y SHARES, ADJUSTED TO REFLECT THE MAXIMUM
SALES CHARGE OF 5.50% FOR THE CLASS A SHARES. CLASS Y SHARES OF THE
INTERNATIONAL GROWTH PORTFOLIO COMMENCED OPERATIONS ON FEBRUARY 12, 1990.
</FN>
</TABLE>
INTERNATIONAL GROWTH FUND
-------------------------
QUICK FUND FACTS
-------------------
INCEPTION DATE
FEBRUARY 12, 1990
PORTFOLIO SIZE:
$165.6 MILLION
SHARES OUTSTANDING:
11,250,338 (Y&A COMBINED)
TOP FIVE HOLDINGS
-------------------
(% OF FUND INVESTMENTS)
NOVARTIS
2.2%
MANNESMANN
1.6%
ROCHE HOLDINGS
1.6%
ROHM LTD
1.6%
ING GROUP
1.5%
23
<PAGE>
MANAGERS'
DISCUSSION
OF
FUND
PERFORMANCE
(CONTINUED)
JUNE 30, 1997
[SQUARE BULLET] INT'L GROWTH FUND (CONTINUED)
Latin American markets, in particular Argentina and Brazil, were up
nicely after the first six months of the period. Mexico also gained during the
second half of 1996, but the gain was canceled out by the renewed weakness of
the peso. In the second half of the period, strong rallies in the utility
sectors of Brazil made it the strongest market in its region. Argentine and
Mexican markets were also encouraged by stronger than expected economic growth.
MARTIN CURRIE, INC.
(80% OF FUND ASSETS )
Our investment approach is to invest in growth, but at the right price. During
the year, the largest sector of our asset allocation model has been Europe,
where we've invested more than half of all assets.
Latin America, including Brazil and Mexico, proved to be the best
performing sector for the period producing returns of about 45%. We've seen a
lot of privatization in these countries, particularly in utilities, from which
the Fund has benefited. After a dramatic Latin American recovery, however, we
have taken profits ahead of elections in Mexico and Brazil. We also have a very
small, but strong performing, portion in cash in the Middle East.
Going forward, we are confident of continued favorable conditions in
Hong Kong in spite of its hand over to China. We will continue to underweight or
avoid the markets of Thailand, Korea, and Malaysia due to weak conditions.
Although Japan had a difficult first half of the period, it has been
recovering nicely over the last six months. We've invested in a very focused
group of world class consumer electronics companies in Japan such as Sony,
Hitachi, and Canon, giving us the ability to produce high returns atypical of
the Japanese market as a whole. We will continue to maximize opportunities in
this market.
ABERDEEN MANAGERS
(20% OF FUND ASSETS)
Throughout the year, we remained underweighted in Japan, which benefited the
portfolio due to that country's weak performance during the early part of the
period. We have recently seen volatility in the world markets, and we expect
this trend to increase. We also expect to see volatility in the currency
24
<PAGE>
[SQUARE BULLET] COREFUND
markets as Europe moves toward one currency. We're closely watching Hong Kong
since its hand over to China, looking for opportunities. The Far East should
begin to outperform as conditions there are excellent for growth. Looking ahead,
although the international markets have generally underperformed the U.S. over
the last few years, we believe the cycle is now beginning to turn around.
[SQUARE BULLET]
[SQUARE BULLET] BALANCED FUND
ANNUAL RESULTS
[SQUARE BULLET] This Fund returned 16.44% for the year ending June 30, 1997.
[SQUARE BULLET] The Fund's benchmarks, the S&P 500 Index returned 34.68% and
the Lehman Brothers Intermediate Government/Corporate Bond Index
returned 7.23% for the same period, respectively.
[SQUARE BULLET] Assets in the Fund grew 11.5% from $105.7 million to $117.8
million during the year.
COMMENTARY
The CoreFund Balanced Fund produced positive returns for investors for the one
year period ending June 30, 1997. Throughout the year, the Fund had mixed
performance as it shifted its equity sector weightings to a more advantageous
position.
[GRAPHIC OF POINTER]
On the equity side, we began the period by decreasing the Fund's
exposure to financial stocks while increasing its energy holdings. This hurt
performance as a post election rally in the market produced high returns in the
financial sector. Also, volatility in the Fund's technology and communica-
BALANCED FUND
-------------
QUICK FUND FACTS
-------------------
INCEPTION DATE
JANUARY 4, 1993
PORTFOLIO SIZE:
$117.8 MILLION
SHARES OUTSTANDING:
8,717,507 (Y&A COMBINED)
TOP FIVE EQUITY HOLDINGS
-------------------------
(% OF FUND INVESTMENTS)
WARNER LAMBERT
1.3%
HEALTH MANAGEMENT ASSOCIATES
1.3%
PEOPLESOFT
1.2%
ORACLE
1.2%
DAYTON HUDSON
1.2%
25
<PAGE>
MANAGERS'
DISCUSSION
OF
FUND
PERFORMANCE
(CONTINUED)
JUNE 30, 1997
[SQUARE BULLET] BALANCED FUND (CONTINUED)
tions services holdings had a negative impact late in 1996.
The situation reversed during the first quarter 1997 correction, when the
overweighted technology sector generated superior returns relative to the
market. We then increased the Fund's holdings in the financial sector toward a
market weighting and decreased energy holdings. These trends continued through
the second quarter of 1997. In addition, holdings in the capital goods and
healthcare sectors continued to post strong returns, while large capitalization,
predictable growth stocks resumed market leadership.
On the fixed income side of the portfolio, we shortened duration during
periods of price strength from 10 years to about 51/2 years, bringing it closer
to the index. We also worked to add income during periods of price weakness.
Looking ahead, the Fund is now in a strong position both on the equity
side and the fixed income side in light of current market conditions. We do not
foresee economic conditions changing in the next six months, although we
continue to look for signs to the contrary. We continue to favor stocks of
companies which are generating accelerating earnings momentum and positive
earnings surprises, as well as improved earnings prospects. In contrast, we
intend to avoid new purchases of bonds, as we anticipate stable to gently
falling interest rates through the calendar year end. [SQUARE BULLET]
AVERAGE ANNUAL TOTAL RETURN1
-----------------------------------------------
1 YEAR 3 YEAR INCEPTION
CLASS Y 16.44% 17.01% 12.01%
CLASS A W/O LOAD 16.15% 16.70% 11.56%
CLASS A W/LOAD 9.79% 14.51% 10.10%
-----------------------------------------------
[LINE GRAPH DEPICTING COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT]
COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT [DOLLARS IN THOUSANDS]
1/31/93 6/93 6/94 6/95 6/96 6/97
BALANCED CLASS Y 10,000 10,478 10,309 11,980 14,185 16,517
BALANCED CLASS A
(SYNTHETIC) 9,450 9,899 9,715 11,254 13,294 15,441
S&P 500 COMPOSITE
INDEX 10,000 10,399 10,543 13,287 16,739 22,544
LEHMAN INTERMEDIATE
GOVERNMENT-CORPORATE
INDEX 10,000 10,419 10,392 11,468 12,042 12,912
1 FOR THE PERIOD ENDED JUNE 30, 1997. 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) PERIOD TO THAT DATE IS BASED ON THE PERFORMANCE OF
INSTITUTIONAL CLASS Y SHARES, ADJUSTED TO REFLECT THE MAXIMUM SALES CHARGE OF
5.50% FOR THE CLASS A SHARES. CLASS Y SHARES OF THE BALANCED PORTFOLIO
COMMENCED OPERATIONS ON JANUARY 4, 1993.
26
<PAGE>
[SQUARE BULLET] COREFUND
COREFUND FIXED INCOME MANAGERS
(LEFT TO RIGHT)
JOSEPH BAXTER
INTERMEDIATE, PA & NJ MUNI BONDS
DAN TAYLOR
SHORT-INTERMEDIATE BOND
BRIAN SNYDER
MUNICIPAL BOND SPECIALIST
JOHN ACKLER
SHORT TERM INCOME
WILLIAM LAWRENCE
GOVERNMENT INCOME & BOND
(MANAGER NOT SHOWN)
GEORGE MCNEILL
GLOBAL BOND
[PHOTO OF JOSEPH BAXTER, DAN TAYLOR, BRIAN SNYDER,
JOHN ACKLER, WILLIAM LAWRENCE]
27
<PAGE>
MANAGERS'
DISCUSSION
OF
FUND
PERFORMANCE
(CONTINUED)
JUNE 30, 1997
SHORT TERM INCOME FUND
-----------------------
QUICK FUND FACTS
-------------------
INCEPTION DATE
MAY 15, 1995
PORTFOLIO SIZE:
$37.5 MILLION
SHARES OUTSTANDING:
3,762,789 (Y&A COMBINED)
AVERAGE WEIGHTED MATURITY:
1.0 YEARS
QUALITY DIVERSIFICATION
[PIE CHART]
AAA 55%
AA 4%
A 19%
BBB 10%
OTHER 12%
INVESTMENT QUALITY RATINGS AS RATED BY MOODY'S
ANNUAL RESULTS
[SQUARE BULLET] This Fund returned 5.82% net of fees for the year ending
June 30, 1997.
[SQUARE BULLET] The Fund's benchmark, the Merrill Lynch 1-year Treasury Bill
Index, had a gross return of 6.18% for the same period.
[SQUARE BULLET] Assets in the Fund grew 24.6% from $30.1 million to $37.5
million during the year.
COMMENTARY
Despite slightly underperforming its benchmark, the CoreFund Short Term Income
Fund provided money market investors with positive returns for the year. During
the period, the average weighted maturity of the Fund was about one year, toward
the shorter end of its range of three years or less.
During the first six months of the period, the Federal funds rate remained
unchanged. However, the market experienced some short-term interest rate
volatility as concerns about inflation fueled fears that the Federal Reserve
would raise interest rates. By September, evidence of a softer economy quieted
these fears and rates dropped significantly.
The first quarter of 1997 again found short-term income securities trading
on expectations of an upward interest rate move. In March, the interest rate was
increased followed by the influx of enormous tax receipts in April and May. With
the treasury flush with cash, action was taken to reduce the auction sizes of
several Treasury issuances reducing supply for the remainder of the period.
Throughout this cycle, a laddered maturity approach was maintained,
exposing the portfolio all along the yield curve. This
AVERAGE ANNUAL TOTAL RETURN1
-----------------------------------------------
1 YEAR INCEPTION
CLASS Y 5.82% 5.42%
CLASS A W/O LOAD 5.59% 5.07%
CLASS A W/LOAD 2.19% 3.43%
-----------------------------------------------
[LINE GRAPH DEPICTING COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT]
COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT [DOLLARS IN THOUSANDS]
5/31/95 6/95 6/96 6/97
SHORT-TERM INCOME
FUND CLASS Y 10,000 10,046 10,534 11,147
SHORT-TERM INCOME
FUND CLASS A 9,450 9,718 10,160 10,728
MERRILL LYNCH 1-YEAR
TREASURY BILL INDEX 10,000 10,057 10,615 11,271
1 FOR THE PERIOD ENDED JUNE 30, 1997. 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%.
28
<PAGE>
[SQUARE BULLET] COREFUND
strategy helps to neutralize interest rate risk and is a great way to achieve
better yields due to representation at the higher end of the yield curve.
In addition, our floater and asset-backed positions were increased
slightly as a hedge against higher interest rates. This technique produces a
more constant yield.
Looking ahead, we intend to keep a disciplined laddered approach to Fund
management. We will continue to work to neutralize interest rate risk and
duration rate risk as we concentrate on yield. We believe that it will take a
while for technical factors, such as treasury supply, to change. In terms of the
economy, although we think there still may be another interest rate hike
somewhere on the horizon, the economic data is simply too good for the market to
change much in the near future. [SQUARE BULLET]
[SQUARE BULLET] SHORT-INTERMEDIATE BOND
ANNUAL RESULTS
[SQUARE BULLET] This Fund returned 6.90% for the year ending June 30, 1997.
[SQUARE BULLET] The Fund's benchmark, the Merrill Lynch 1-5 year Treasury
Index, returned 6.70% for the same period.
[SQUARE BULLET] Assets in the Fund grew 1.8% from $162.9 million to $165.9
million during the year.
COMMENTARY
The CoreFund Short-Intermediate Bond Fund provided investors with positive
returns for the year while slightly outperforming its benchmark. The Fund
benefited from overweighted positions in asset-backed securities and Yankee
securities. Underweighting in corporate bonds, treasuries, and a slight
underweighting in mortgages has been the Fund's position throughout the period.
We work to add value through security selection and sector allocation, striving
to invest in the right sectors, as well as the right securities and companies.
Overall, the bond market was surprisingly stable over the past twelve
months. The Federal Reserve Board raised interest
SHORT-INTERMEDIATE BOND FUND
----------------------------
QUICK FUND FACTS
-------------------
INCEPTION DATE
FEBRUARY 3, 1992
PORTFOLIO SIZE:
$165.9 MILLION
SHARES OUTSTANDING:
16,882,464 (Y&A COMBINED)
AVERAGE WEIGHTED MATURITY:
4.4 YEARS
QUALITY DIVERSIFICATION
[PIE CHART]
AAA 71%
AA 2%
A 10%
BBB 8%
BB 3%
NOT RATED 2%
OTHER 4%
INVESTMENT QUALITY RATINGS AS RATED BY MOODY'S
29
<PAGE>
MANAGERS'
DISCUSSION
OF
FUND
PERFORMANCE
(CONTINUED)
JUNE 30, 1997
[SQUARE BULLET] SHORT-INTERMEDIATE (CONTINUED)
rates once during the period, but there was a modest rally across the yield
curve. Volatility was very low in the marketplace.
In terms of the economy, although we think there still may be another
interest rate hike somewhere on the horizon, the economic data is simply too
good for the market to change much in the near future.
In this environment, the Fund will work to add value by continuing to
emphasize its yield advantage with corporate, mortgage-backed, and asset-backed
securities. And we continue to see potential in asset-backed securities and
Yankee securities. Although duration has been somewhat longer than the Fund's
21/2 year target, we anticipate scaling back duration to be neutral with our
benchmarks as we move forward. [SQUARE BULLET]
AVERAGE ANNUAL TOTAL RETURN1
-----------------------------------------------
1 YEAR 5 YEAR INCEPTION
CLASS Y 6.90% 5.51% 5.56%
CLASS A W/O LOAD 6.64% 5.26% 5.34%
CLASS A W/LOAD 3.15% 4.56% 4.69%
-----------------------------------------------
[LINE GRAPH DEPICTING COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT]
COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT [DOLLARS IN THOUSANDS]
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C>
2/29/92 6/92 6/93 6/94 6/95 6/96 6/97
SHORT-INTERMEDIATE
BOND CLASS Y 10,000 10,249 11,059 11,025 11,931 12,533 13,398
SHORT-INTERMEDIATE
BOND CLASS A
(SYNTHETIC) 9,675 9,916 10,700 10,641 11,487 12,037 12,836
MERRILL 1-5 YEAR SHORT-
INTERMEDIATE TREASURY
INDEX 10,000 10,324 11,189 11,265 12,248 12,883 13,747
MERILL 1-3 YEAR SHORT-
TERM TREASURY INDEX 10,000 10,284 10,961 11,138 11,999 12,651 13,483
<FN>
1 FOR THE PERIOD ENDED JUNE 30, 1997. 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.
WE HAVE CHANGED THE BENCHMARK FOR THIS FUND BECAUSE WE FEEL THE MERRILL LYNCH
1-5 YR. TREASURY INDEX MORE ACCURATELY REPRESENTS THE HOLDINGS OF THIS FUND.
</FN>
</TABLE>
30
<PAGE>
[SQUARE BULLET] COREFUND
[SQUARE BULLET] GOVERNMENT INCOME FUND
ANNUAL RESULTS
[SQUARE BULLET] This Fund returned 8.15% after expenses for the year ending
June 30, 1997.
[SQUARE BULLET] The Fund's benchmark, the Salomon Brothers Broad Investment
Grade Bond Index, also returned 8.15% for the same period.
[SQUARE BULLET] Assets in the Fund grew 36.2% from $15.2 million to $20.7
million during the year.
[GRAPHIC OF POINTER]
COMMENTARY
The CoreFund Government Income Fund produced positive results for its
shareholders while matching its benchmark. The Fund's performance was helped
significantly by an overweighting in mortgage-backed securities. Representing
about 75% of the Fund's assets, mortgage-backed securities were a strong
performing sector of the market. The balance of the Fund was in U.S. Treasury
securities.
Throughout the period, the Fund's duration management has been minimal.
The Fund's average duration is typically 43/4 years. We went a little bit longer
in the second half of 1996 which modestly helped Fund performance. During the
first quarter of 1997, we shortened duration slightly, which helped performance
during that period but took away from performance during the following quarter.
The Fund emphasizes high income as a source of return for its investors,
and it takes on no credit risks.
Overall, the bond market was surprisingly stable over the past twelve
months. The Federal Reserve Board raised interest rates once during the period,
but there was a modest rally across the yield curve. Volatility was very low in
the marketplace.
AVERAGE ANNUAL TOTAL RETURN1
-----------------------------------------------
1 YEAR 3 YEAR INCEPTION
CLASS Y 8.15% 7.47% 5.66%
CLASS A W/O LOAD 7.88% 7.25% 5.21%
CLASS A W/LOAD 4.41% 6.07% 4.37%
-----------------------------------------------
[LINE GRAPH DEPICTING COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT]
COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT (DOLLARS IN THOUSANDS)
4/30/93 6/93 6/94 6/95 6/96 6/97
GOVERNMENT INCOME CLASS Y 10,000 10,235 10,098 11,134 11,589 12,534
GOVERNMENT INCOME CLASS A
(SYNTHETIC) 9,675 9,890 9,735 10,730 11,131 12,008
SOLOMON BROAD INVESTMENT-
GRADE BOND INDEX 10,000 10,196 10,076 11,340 11,905 12,875
LEHMAN BROTHERS AGGREGATE
BOND INDEX 10,000 10,194 10,061 11,324 11,892 12,862
1 FOR THE PERIOD ENDED JUNE 30, 1997. 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.
GOVERNMENT INCOME FUND
----------------------
QUICK FUND FACTS
-------------------
INCEPTION DATE
APRIL 1, 1993
PORTFOLIO SIZE:
$20.7 MILLION
SHARES OUTSTANDING:
2,118,140 (Y&A COMBINED)
AVERAGE WEIGHTED MATURITY:
8.8 YEARS
MATURITY DIVERSIFICATION
[PIE CHART]
UNDER 1 YEAR 2%
1-5 YEARS 22%
6-10 YEARS 66%
OVER 20 YEARS 10%
MATURITY IN YEARS --% OF FUND INVESTMENTS
31
<PAGE>
MANAGERS'
DISCUSSION
OF
FUND
PERFORMANCE
(CONTINUED)
JUNE 30, 1997
[SQUARE BULLET] GOV'T INCOME (CONTINUED)
Looking ahead, we've shortened duration a bit due to prepayment fears in
the mortgage sector sparked by the second quarter rally. Overall, we plan to
stay duration neutral to the market with an emphasis on yield. We plan to
continue our emphasis on the mortgage sector, but we look to purchase mortgages
with less prepayment exposure to avoid prepayment risk.
We expect the economy to continue with low inflation and good growth
throughout the third quarter of 1997, within the context of a tight labor
market. However, if there is any rebound in retail spending, we believe there
may be another rise in interest rates in the future and the yield curve will
probably flatten. Volatility should remain generally low; therefore, we will
maintain a neutral duration strategy with an emphasis on yield. [SQUARE BULLET]
[SQUARE BULLET] BOND FUND
ANNUAL RESULTS
[SQUARE BULLET] This Fund returned 7.43% for the year ending June 30, 1997.
[SQUARE BULLET] The Fund's benchmark, the Lehman Aggregate Bond Index returned
8.16% for the same period.
[SQUARE BULLET] Assets in the Fund declined 8.0% from $199.9 million to $184.0
million during the year.
COMMENTARY
During the last year, the CoreFund Bond Fund produced positive returns for
investors while slightly underperforming its benchmark. Early in the period, we
had an underweighting in mortgage-backed securities which helped the Fund's
performance as the market rallied. We then added more mortgages, but were still
underweighted when mortgages began to outperform the market in early 1997, which
hurt the Fund's performance.
[GRAPHIC OF POINTER]
An 8% to 10% overweighting in asset-backed securities helped
significantly throughout the Fund's fiscal year. We also had an overall neutral
weighting in the corporate bond sector with an overweight in the Yankee sector.
And, we were overweighted in
32
<PAGE>
[SQUARE BULLET] COREFUND
brokerage firm securities where we benefited from recent consolidations in that
industry.
The Fund performed well during the second half of 1996 with a duration
neutral to the index. During the first half of 1997, we extended duration by
about 3 months in the first quarter. This hurt our performance because when the
market rallied in the second quarter, we were very early on duration. Right now,
we are duration neutral.
Overall, the bond market was surprisingly stable over the past twelve
months. The Federal Reserve Board raised interest rates once during the period,
but there was a modest rally across the yield curve. Volatility was very low in
the marketplace. Lesser-rated corporate bonds were the top performers. Mortgages
performed well in the first half of 1997 after slight underperformance in the
second half of 1996. Asset-backed securities also performed well for the period.
We expect the economy to continue with low inflation and good growth
throughout the third quarter of 1997, within the context of a tight labor
market. However, if there is any rebound in retail spending, we believe there
may be another rise in interest rates in the future and then the yield curve
would probably flatten. However, volatility should remain generally low, and
therefore we will maintain a neutral duration strategy with an emphasis on
yield.
We will continue to overweight the asset-backed securities and the Yankee
sectors. These are the two areas where we are seeing the most innovation from
issuers and, therefore, the most opportunities. [SQUARE BULLET]
AVERAGE ANNUAL TOTAL RETURN1
-----------------------------------------------
1 YEAR 5 YEAR INCEPTION
CLASS Y 7.43% 6.03% 7.73%
CLASS A W/O LOAD 7.15% 5.91% 7.65%
CLASS A W/LOAD 2.03% 4.88% 6.94%
-----------------------------------------------
[LINE GRAPH DEPICTING COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT]
COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT (DOLLARS IN THOUSANDS)
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
2/28/90 6/90 6/91 6/92 6/93 6/94 6/95 6/96 6/97
BOND CLASS Y
(SYNTHETIC) 10,000 10,266 11,279 12,883 14,254 13,946 15,403 16,078 17,272
BOND CLASS A 9,525 9,778 10,743 12,271 13,577 13,283 14,674 15,262 16,354
LEHMAN BROTHERS
AGGREGATE BOND
INDEX 10,000 10,373 11,482 13,095 14,639 14,447 16,261 17,076 18,470
<FN>
1 FOR THE PERIOD ENDED JUNE 30, 1997. 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 MAXIMUM SALES CHARGE OF 4.75% FOR THE
CLASS A SHARES. CLASS A SHARES OF THE BOND PORTFOLIO COMMENCED OPERATIONS ON
FEBRUARY 28, 1990.
</FN>
</TABLE>
BOND FUND
---------
QUICK FUND FACTS
-------------------
INCEPTION DATE
FEBRUARY 28, 1990
PORTFOLIO SIZE:
$184.0 MILLION
SHARES OUTSTANDING:
17,959,624 (Y&A COMBINED)
AVERAGE WEIGHTED MATURITY:
11.0 YEARS
QUALITY DIVERSIFICATION
AAA 77%
AA 1%
A 7%
BBB 10%
NOT RATED 3%
OTHER 2%
INVESTMENT QUALITY RATINGS AS RATED BY MOODY'S
33
<PAGE>
MANAGERS'
DISCUSSION
OF
FUND
PERFORMANCE
(CONTINUED)
JUNE 30, 1997
GLOBAL BOND FUND
----------------
QUICK FUND FACTS
-------------------
INCEPTION DATE
FEBRUARY 15, 1993
PORTFOLIO SIZE:
$34.8 MILLION
SHARES OUTSTANDING:
3,646,453 (Y&A COMBINED)
AVERAGE WEIGHTED MATURITY:
8.7 YEARS
QUALITY DIVERSIFICATION
AAA 68%
AA 25%
A 6%
NOT RATED 1%
INVESTMENT QUALITY RATINGS AS RATED BY MOODY'S
[SQUARE BULLET] GLOBAL BOND FUND
ANNUAL RESULTS
[SQUARE BULLET] This Fund returned 6.18% for the year ending June 30, 1997.
[SQUARE BULLET] The Fund's benchmark, the J.P. Morgan Global Bond Index,
returned 4.48% for the same period.
[SQUARE BULLET] Assets in the Fund grew 4.8% from $33.2 million to $34.8
million during the year.
COMMENTARY
[GRAPHIC OF POINTER]
During the past year, the Global Bond Fund outperformed its benchmark, reporting
positive performance for shareholders. For the year ending in June 1997, bond
markets globally have done quite well. We have an environment where restrained
growth is appearing around the world with seemingly no inflationary
consequences. The bond markets have responded well to this structural change in
the world. However, because of the strength of the dollar, the performance has
not reflected this as well as we would like.
During the first six months of the Fund's fiscal year, investors were
uncertain about the strength of the U.S. economy. This is important because the
performance of U.S. Treasuries has been setting the tone for other world bond
markets.
Also during this period, we saw volatility in parts of Europe in light
of uncertainty about the European Monetary Union (EMU). In response to continued
uneasiness about the EMU, all of the Fund's European
AVERAGE ANNUAL TOTAL RETURN1
-----------------------------------------------
1 YEAR 3 YEAR INCEPTION
CLASS Y 6.18% 7.99% 3.92%
CLASS A W/O LOAD 5.92% 7.74% 3.65%
CLASS A W/LOAD 0.92% 6.01% 2.23%
-----------------------------------------------
[LINE GRAPH DEPICTING COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT]
COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT (DOLLARS IN THOUSANDS)
12/31/93 6/94 6/95 6/96 6/97
GLOBAL BOND CLASS Y 10,000 9,045 9,923 10,729 11,392
GLOBAL BOND CLASS A 9,525 8,595 9,418 10,147 10,748
J.P. MORGAN GLOBAL
BOND INDEX 10,000 9,964 11,704 11,942 12,477
J.. MORGAN GLOBAL
BOND INDEX, HEDGED 10,000 9,489 10,537 11,498 12,565
1 FOR THE PERIOD ENDED JUNE 30, 1997. PAST PERFORMANCE OF THE PORTFOLIO IS NOT
PREDICTIVE OF FUTURE PERFORMANCE. CLASS Y SHARES AND CLASS A SHARES WERE
OFFERED BEGINNING FEBRUARY 15, 1993. THE MAXIMUM SALES CHARGE ON CLASS A
SHARES IS 4.75%.
holdings are now hedged back to the dollar. We believe that European currency
will continue to be weak in the coming months.
The first half of 1997 brought the March interest rate increase in the U.S.
We
34
<PAGE>
[SQUARE BULLET] COREFUND
also saw strong employment numbers and rising average earnings implying the
danger of further interest rate moves for the U.S. and the UK. In Europe, slow
growth and the constraints of the EMU set the stage for higher interest rates.
And, in Japan, while export growth was strengthening, domestic growth was
inhibited.
We see the next six months as a dangerous period for global bonds because
any kick in inflation, no matter how small, may take the market by surprise, and
the risk is that yields will go back up. We expect to see virtually all bond
markets with higher yields over the next six months, and therefore, we are
continuing to keep a short maturity profile. [SQUARE BULLET]
[SQUARE BULLET] INTERMEDIATE MUNI BOND
ANNUAL RESULTS
[SQUARE BULLET] This Fund returned 5.62% for the year ending June 30, 1997.
[SQUARE BULLET] The Fund's benchmark, the Lehman Brothers 7-Year Municipal Bond
Index, returned 7.05% for the same period.
[GRAPHIC OF POINTER]
[SQUARE BULLET] Assets in the Fund grew 42.9% from $1.4 million to $2.0 million
during the year.
COMMENTARY
During the year, the CoreFund Intermediate Municipal Bond Fund provided
investors with positive returns, even though it underperformed its benchmark.
The municipal bond market experienced slow economic growth during the first
quarter of 1997. After a Federal Funds rate hike of .25% and tax exempt yields
rose 25 to 30 basis points, the municipal market rallied along with the Treasury
market in the second quarter. Yields fell 40 basis points across the municipal
curve.
In April, higher yields, the stock market sell-off, and a slowing economy
drew investors into the muni marketplace. Demand soon outstripped bond supply.
Also, April tax payments increased municipal cash,
INTERMEDIATE MUNICIPAL BOND FUND
--------------------------------
QUICK FUND FACTS
-------------------
INCEPTION DATE
MAY 3, 1993
PORTFOLIO SIZE:
$2.0 MILLION
SHARES OUTSTANDING:
194,239 (Y&A COMBINED)
AVERAGE WEIGHTED MATURITY:
7.1 YEARS
QUALITY DIVERSIFICATION
AAA 68%
AA 22%
A 3%
NOT RATED 4%
OTHER 3%
INVESTMENT QUALITY RATINGS AS RATED BY MOODY'S
35
<PAGE>
MANAGERS'
DISCUSSION
OF
FUND
PERFORMANCE
(CONTINUED)
JUNE 30, 1997
[SQUARE BULLET] INTERMEDIATE MUNI (CONTINUED)
decreasing the need for new issues. As a result, a strong technical rally pushed
yields down. Yields rose slightly in June as supply began to increase, creating
a small window of opportunity for investors.
We believe that interest rates will remain unchanged for at least the
near future. We will remain focused on investing in tax-exempt municipal bonds
maintaining an average weighted maturity of three to ten years. [SQUARE BULLET]
AVERAGE ANNUAL TOTAL RETURN1
-----------------------------------------------
1 YEAR 3 YEAR INCEPTION
CLASS Y 5.62% 5.31% 4.07%
CLASS A W/O LOAD 5.36% 5.09% 3.81%
CLASS A W/LOAD 1.97% 3.95% 2.98%
-----------------------------------------------
[LINE GRAPH DEPICTING COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT]
COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT (DOLLARS IN THOUSANDS)
5/31/93 6/93 6/94 6/95 6/96 6/97
INTERMEDIATE TERM MUNI
CLASS Y 10,000 10,124 10,097 10,660 11,165 11,793
INTERMEDIATE TERM MUNI
CLASS A (SYNTHETIC) 9,675 9,782 9,732 10,259 10,719 11,293
LEHMAN 7-YEAR MUNICIPAL
BOND INDEX 10,000 10,183 10,311 11,163 11,781 12,612
1 FOR THE PERIOD ENDED JUNE 30, 1997. 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%.
[SQUARE BULLET] PA MUNICIPAL BOND FUND
ANNUAL RESULTS
[SQUARE BULLET] This Fund returned 7.92% for the year ending June 30, 1997.
[SQUARE BULLET] The Fund's benchmark, the Lehman Brothers Pennsylvania Bond
Index, returned 8.07% for the same period.
[SQUARE BULLET] Assets in the Fund grew 23.2% from $9.9 million to $12.2
million during the year.
COMMENTARY
The CoreFund Pennsylvania Municipal Bond Fund almost equaled its benchmark
performance for the year, providing investors with positive tax-free returns.
The Fund benefited from an increase in AA rated bonds which added yield with
minimal additional risk exposure. Also, by increasing the Fund's average
maturity to the upper end of its 9-11 year range, we've enhanced returns.
After outperforming their treasury counterparts during the second half
of 1996, the municipal bond market experienced slow economic growth during the
first quarter of 1997. After a Federal Funds rate hike of .25% and tax exempt
yields rising 25
36
<PAGE>
[SQUARE BULLET] COREFUND
AVERAGE ANNUAL TOTAL RETURN1
-----------------------------------------------
1 YEAR 3 YEAR INCEPTION
CLASS Y 7.92% 7.14% 6.90%
CLASS A W/O LOAD 7.65% 6.88% 6.64%
CLASS A W/LOAD 2.54% 5.15% 4.98%
-----------------------------------------------
[LINE GRAPH DEPICTING COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT]
COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT (DOLLARS IN THOUSANDS)
5/31/94 6/94 6/95 6/96 6/97
PENNSYLVANIA MUNI BOND
CLASS Y 10,000 9,913 10,656 11,298 12,193
PENNSYLVANIA MUNI BOND
CLASS A 9,525 9,429 10,112 10,695 11,513
LEHMAN BROTHERS MUTUAL
FUND PA INDEX 10,000 9,946 10,828 11,505 12,433
1 FOR THE PERIOD ENDED JUNE 30, 1997. 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 4.75%.
to 30 basis points, the municipal market rallied along with the Treasury market
in the second quarter. Yields fell 40 basis points across the municipal curve.
In April, higher yields, the stock market sell-off, and a slowing
economy drew investors into the muni marketplace. Demand soon outstripped bond
supply. Also, April tax payments increased municipal cash decreasing the need
for new issues. As a result, a strong technical rally pushed yields down. Yields
rose slightly in June as supply began to increase, creating a small window of
opportunity for investors. Looking ahead, we believe that interest rates will
remain unchanged for at least the near future. [SQUARE BULLET]
PENNSYLVANIA MUNICIPAL BOND FUND
--------------------------------
QUICK FUND FACTS
-------------------
INCEPTION DATE
MAY 16, 1994
PORTFOLIO SIZE:
$12.2 MILLION
SHARES OUTSTANDING:
1,162,752 (Y&A COMBINED)
AVERAGE WEIGHTED MATURITY:
10.7 YEARS
QUALITY DIVERSIFICATION
AAA 65%
AA 19%
A 6%
OTHER 10%
INVESTMENT QUALITY RATINGS AS RATED BY MOODY'S
37
<PAGE>
MANAGERS'
DISCUSSION
OF
FUND
PERFORMANCE
(CONTINUED)
JUNE 30, 1997
NEW JERSEY MUNICIPAL BOND FUND
------------------------------
QUICK FUND FACTS
-------------------
INCEPTION DATE
MAY 16, 1994
PORTFOLIO SIZE:
$1.9 MILLION
SHARES OUTSTANDING:
184,608 (Y&A COMBINED)
AVERAGE WEIGHTED MATURITY:
9.9 YEARS
QUALITY DIVERSIFICATION
AAA 37%
AA 27%
NOT RATED 31%
OTHER 5%
INVESTMENT QUALITY RATINGS AS RATED BY MOODY'S
[SQUARE BULLET] NJ MUNICIPAL BOND FUND
ANNUAL RESULTS
[SQUARE BULLET] This Fund returned 6.70% for the year ending June 30, 1997.
[SQUARE BULLET] The Fund's benchmark, the Lehman Brothers New Jersey Bond Index,
returned 7.88% for the same period.
[SQUARE BULLET] Assets in the Fund grew 18.8% from $1.6 to $1.9 million during
the year.
COMMENTARY
The CoreFund NJ Municipal Bond Fund provided investors with positive tax-free
returns for the year despite underperforming its benchmark. The Fund benefited
from an extension of its average maturity which enhanced returns.
After outperforming their treasury counterparts during the second half of
1996, the municipal bond market experienced slow economic growth during the
first quarter of 1997. After a Federal Funds rate hike of .25% and tax exempt
yields rising 25 to 30 basis points, the municipal market rallied along with the
Treasury market in the second quarter. Yields fell 40 basis points across the
municipal curve.
In April, higher yields, the stock market sell-off, and a slowing economy
drew investors into the muni market place. Demand soon outstripped bond supply.
Also, April tax payments increased municipal cash, decreasing the need for new
issues. As a result, a strong technical rally pushed yields down. Yields rose
slightly in June as supply began to increase, creating a small window of
opportunity for investors. Looking ahead, we believe that interest rates will
remain unchanged for at least the near future. [SQUARE BULLET]
AVERAGE ANNUAL TOTAL RETURN1
-----------------------------------------------
1 YEAR 3 YEAR INCEPTION
CLASS Y 6.70% 6.41% 6.15%
CLASS A W/O LOAD 6.44% 6.07% 5.85%
CLASS A W/LOAD 1.40% 4.35% 4.21%
-----------------------------------------------
[LINE GRAPH DEPICTING COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT]
COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT (DOLLARS IN THOUSANDS)
5/31/94 6/94 6/95 6/96 6/97
NEW JERSEY MUNI BOND
CLASS Y 10,000 9,930 10,650 11,212 11,963
NEW JERSEY MUNI BOND
CLASS A 9,525 9,466 10,113 10,612 11,295
LEHMAN BROTHERS MUTUAL
FUND NEW JERSEY INDEX 10,000 9,939 10,783 11,443 12,344
1 FOR THE PERIOD ENDED JUNE 30, 1997. 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 4.75%.
38
<PAGE>
[SQUARE BULLET] COREFUND
COREFUND MONEY MARKET MANAGERS
(LEFT TO RIGHT)
JOHN ACKLER
CASH RESERVE
FOLU ABIONA
TAX-FREE RESERVE
RONALD BRASTEN
TREASURY RESERVE
[PHOTO OF JOHN ACKLER, FOLU ABIONA, RONALD BRASTEN]
39
<PAGE>
MANAGERS'
DISCUSSION
OF
FUND
PERFORMANCE
(CONTINUED)
JUNE 30, 1997
TREASURY RESERVE
-----------------
QUICK FUND FACTS
-------------------
INCEPTION DATE
NOVEMBER 21, 1988
PORTFOLIO SIZE:
$847.5 MILLION
AVERAGE WEIGHTED MATURITY:
55 DAYS
SEVEN DAY YIELD:
5.01% (CLASS Y)
4.76% (CLASS C)
QUALITY DIVERSIFICATION
AAA 36%
NOT RATED 2%
OTHER 62%
INVESTMENT QUALITY RATINGS AS RATED BY MOODY'S
[SQUARE BULLET] TREASURY RESERVE
ANNUAL RESULTS
[GRAPHIC POINTER]
[SQUARE BULLET] This Fund returned 4.97% net of expenses for the year ending
June 30, 1997.
[SQUARE BULLET] The Fund's benchmark, the IBC/Donoghue Treasury & REPO Index,
returned 4.78% for the same period. The IBC/Donoghue 100%
Treasury Fund Index returned 4.72%, net of expenses, for the
year.
[SQUARE BULLET] Assets in the Fund declined 7.1% from $911.9 million to $847.5
million during the year.
COMMENTARY
The average weighted maturity of the CoreFund Treasury Reserve decreased from 58
to 55 days during the year. The Fund slightly outperformed its benchmark for the
year. The drop in Fund assets was primarily due to investors moving money out of
money market funds and into longer-term coupon securities.
During the first six months of the period, the Federal Funds rate
remained unchanged. However, the market experienced some short-term interest
rate volatility as concerns about inflation fueled fears that the Federal
Reserve would raise interest rates. By September, evidence of a softer economy
quieted these fears and rates dropped significantly.
The first quarter of 1997 again found money market securities trading
on expectations of an upward interest rate move. In March, there was an
interest rate increase followed by the influx of enormous tax receipts in April
and May. With the Treasury flush with cash, the supply of Treasury bills was
reduced for the remainder of the period.
As the market began to anticipate the interest rate increase, we began
lowering the Fund's average maturity to take advantage of market opportunities.
The Fund's primary consideration is yield, so we look for value as we invest.
Throughout this cycle, a laddered maturity approach was maintained, exposing the
portfolio all along the yield curve. This strategy helps to neutralize interest
rate risk and is a great way to achieve better yields due to representation at
the higher end of the yield curve.
Over the last few months, we've seen expensive Treasury bills and an
inverted yield curve in which overnight yields are higher than longer
maturities. To take advantage of
40
<PAGE>
[SQUARE BULLET] COREFUND
this scenario, we've increased our position in overnight repurchase agreements.
This position also helps us to maintain complete liquidity.
PERFORMANCE
- ------------------------------------------
6-MONTH YIELD YIELD
TOTAL RETURN 7-DAY 30-DAY
(CUMULATIVE)(COMPOUNDED)
- ------------------------------------------
CLASS Y 2.45% 5.01% 4.98%
CLASS C 2.32% 4.76% 4.73%
IBC DONOGHUE 2.36% 4.83% 4.81%
TREASURY &
REPO INDEX
- ------------------------------------------
Looking forward, we continue to anticipate another interest rate
increase. However the timing of the move is unclear. Economic growth remains
slow and inflation benign, but the economy is expected to rebound in the third
or fourth quarters.
The Treasury bill remains very rich. Decreased supply and other technical
factors have caused the 3-month sector to trade well below the Federal Funds
target. For this reason, the investment in other Treasury sectors, including
overnight repurchase agreements, will continue to increase until the Treasury
bill market cheapens up. [SQUARE BULLET]
[SQUARE BULLET] CASH RESERVE
ANNUAL RESULTS
[GRAPHIC OF POINTER]
[SQUARE BULLET] This Fund returned 5.09% for the year ending June 30, 1997.
[SQUARE BULLET] The Fund's benchmark, the IBC/Donoghue All-Taxable Money Fund
Average, returned 4.97% for the same period.
[SQUARE BULLET] Assets in the Fund grew 12.8% from $809.9 million to $913.9
million during the year.
COMMENTARY
Outperforming its benchmark, the Cash Reserve provided money market investors
with positive returns for the year. During the period, the average weighted
maturity of the Fund was increased to over 70 days.
During the first six months of the period, the Federal Funds rate
remained unchanged. However, the market experienced some short-term interest
rate volatility as concerns about inflation fueled fears that the Federal
Reserve would raise interest rates. By September, evidence of a softer economy
quieted these fears and rates dropped significantly.
CASH RESERVE
-----------------
QUICK FUND FACTS
-------------------
INCEPTION DATE
AUGUST 16, 1985
PORTFOLIO SIZE:
$913.9 MILLION
AVERAGE WEIGHTED MATURITY:
73 DAYS
SEVEN DAY YIELD:
5.20% (CLASS Y)
4.96% (CLASS C)
QUALITY DIVERSIFICATION
AAA 2%
AA 9%
A 4%
NOT RATED 6%
OTHER 79%
INVESTMENT QUALITY RATINGS AS RATED BY MOODY'S
41
<PAGE>
MANAGERS'
DISCUSSION
OF
FUND
PERFORMANCE
(CONTINUED)
JUNE 30, 1997
[SQUARE BULLET] CASH RESERVE (CONTINUED)
The first quarter of 1997 again found money market securities trading
on expectations of an upward interest rate move. In March, there was an interest
rate increase followed by the influx of enormous tax receipts in April and May.
With the Treasury flush with cash, the supply of Treasury bills was reduced for
the remainder of the period.
PERFORMANCE
- ------------------------------------------
6-MONTH YIELD YIELD
TOTAL RETURN 7-DAY 30-DAY
(CUMULATIVE)(COMPOUNDED)
- ------------------------------------------
CLASS Y 2.53% 5.20% 5.12%
CLASS C 2.40% 4.96% 4.88%
IBC DONOGHUE 2.46% 5.04% 5.02%
ALL-TAXABLE
MONEY MARKET
- ------------------------------------------
Throughout this cycle, a laddered maturity approach was maintained
exposing the portfolio all along the yield curve. This strategy helps to
neutralize interest rate risk and is a great way to achieve better yields due to
representation at the higher end of the yield curve.
In addition, we swapped some of the Fund's fixed-rate debt into
floating rate debt as a hedge against higher interest rates. This technique
produces a more constant yield.
Looking ahead, we intend to keep a disciplined laddered approach to
Fund management. We will continue to work to neutralize interest rate risk and
duration rate risk as we concentrate on yield. We believe that it will take a
while for technical factors, such as Treasury bill supply, to change. In terms
of the economy, although we think there still may be another interest rate hike
somewhere on the horizon, the economic data is simply too good for the market to
change much in the near future. [SQUARE BULLET]
42
<PAGE>
[SQUARE BULLET] COREFUND
[SQUARE BULLET] TAX-FREE RESERVE
ANNUAL RESULTS
[SQUARE BULLET] This Fund returned 3.08% for the year ending June 30, 1997.
[SQUARE BULLET] The Fund's benchmark, the IBC/Donoghue Tax-Free Average,
returned 3.03% for the same period.
[SQUARE BULLET] Assets in the Fund grew 14.8% from $107.0 million to $122.8
million during the year.
COMMENTARY
The average weighed maturity of the Tax-Free Reserve was 51 days during the
year. And, the Fund's one year effective yield was 3.08%, as the Fund
outperformed its benchmark.
During the first six months of this period we experienced normal
patterns in the tax-free money market securities market. The market is driven by
seasonality in terms of the amount of cash in the market. Typically during
January, June, and July, yields fall due to an abundance of cash in the market.
However, in January of 1997, a new pattern emerged as a strong decline in
pre-refinanced bonds took cash out of the market. As a result, supply was
adequate and yields were fabulous.
Throughout the first half of 1997, conditions have remained positive for
the Fund. In June, the tax-exempt rate was equal to the taxable rate. We're
seeing changes to
PERFORMANCE
- ------------------------------------------
6-MONTH YIELD YIELD
TOTAL RETURN 7-DAY 30-DAY
(CUMULATIVE)(COMPOUNDED)
- ------------------------------------------
CLASS Y 1.53% 3.61% 3.35%
CLASS C 1.40% 3.36% 3.10%
IBC DONOGHUE 1.52% 3.45% 3.28%
TAX-FREE
AVERAGE
- ------------------------------------------
the fundamentals of the market that are resulting in higher yields. And, the
trend should continue. It appears that supply should remain strong and, with
more availability comes higher yields.
Our strategy will remain steady as we keep the average maturity of the Fund
between 50 and 60 days. We will extend out on the yield curve when we see an
issue of high value. We will also continue to utilize commercial paper and
smaller note deals as appropriate. Our challenge will be to research and
identify new cash flow patterns and take advantage of them in the coming months.
[SQUARE BULLET]
TAX-FREE RESERVE
-----------------
QUICK FUND FACTS
-------------------
INCEPTION DATE:
APRIL 16, 1991
PORTFOLIO SIZE:
$122.8 MILLION
AVERAGE WEIGHTED MATURITY:
51 DAYS
SEVEN DAY YIELD:
3.61% (CLASS Y)
3.36% (CLASS C)
QUALITY DIVERSIFICATION
AAA 9%
AA 8%
A 22%
NOT RATED 17%
OTHER 44%
INVESTMENT QUALITY RATINGS AS RATED BY MOODY'S
43
<PAGE>
REPORT
OF
INDEPENDENT
AUDITORS
[SQUARE BULLET] COREFUND
Board of Directors and Shareholders
CoreFunds, Inc.
We have audited the accompanying statements of net assets of the Equity Index
Fund, Core Equity Fund, Growth Equity Fund, Special Equity Fund, International
Growth Fund, Balanced Fund, Short Term Income Fund, Short-Intermediate Bond
Fund, Government Income Fund, Bond Fund, Global Bond Fund, Intermediate
Municipal Bond Fund, Pennsylvania Municipal Bond Fund, New Jersey Municipal Bond
Fund, Treasury Reserve, Cash Reserve, and Tax-Free Reserve of CoreFunds, Inc.
(the "Fund") as of June 30, 1997, and the related statements of operations for
the year then ended, and the statements of changes in net assets for the periods
presented herein. We have also audited the financial highlights for each of the
periods presented herein for the Equity Index Fund, Growth Equity Fund,
International Growth Fund, Balanced Fund, Short-Intermediate Bond Fund,
Government Income Fund, Global Bond Fund, Intermediate Municipal Bond Fund,
Pennsylvania Municipal Bond Fund, New Jersey Municipal Bond Fund, Treasury
Reserve, Cash Reserve, and Tax-Free Reserve, and for the periods ended June 30,
1996 and June 30, 1997 presented herein for the Core Equity Fund, Special Equity
Fund, Short Term Income Fund, and Bond Fund. 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 financial highlights for the
periods ended October 31, 1990 through October 31, 1995 for the Core Equity
Fund, Special Equity Fund, Short Term Income Fund, and Bond 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, 1997 and confirmation of securities not
held by the custodian by correspondence with brokers. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the 1997 financial statements and financial highlights
referred to above present fairly, in all material respects, the financial
position of the Equity Index Fund, Core Equity Fund, Growth Equity Fund, Special
Equity Fund, International Growth Fund, Balanced Fund, Short Term Income Fund,
Short-Intermediate Bond Fund, Government Income Fund, Bond Fund, Global Bond
Fund, Intermediate Municipal Bond Fund, Pennsylvania Municipal Bond Fund, New
Jersey Municipal Bond Fund, Treasury Reserve, Cash Reserve, and Tax-Free Reserve
at June 30, 1997 and the results of their operations for the year then ended,
and the changes in their net assets for the periods presented herein and for the
Equity Index Fund, Growth Equity Fund, International Growth Fund, Balanced Fund,
Short-Intermediate Bond Fund, Government Income Fund, Global Bond Fund,
Intermediate Municipal Bond Fund, Pennsylvania Municipal Bond Fund, New Jersey
Municipal Bond Fund, Treasury Reserve, Cash Reserve, and Tax-Free Reserve, the
financial highlights for each of the periods presented herein, and for the Core
Equity Fund, Special Equity Fund, Short Term Income Fund, and Bond Fund, the
financial highlights for the periods ended June 30, 1996 and June 30, 1997
presented herein, in conformity with generally accepted accounting principles.
Philadelphia, Pennsylvania
August 12, 1997
/S/ SIGNATURE
ERNST & YOUNG LLP
44
<PAGE>
STATEMENT
OF
NET ASSETS
AS OF
JUNE 30, 1997
[SQUARE BULLET] COREFUND EQUITY FUNDS
EQUITY INDEX FUND
[PIE CHART]
MISCELLANEOUS 8%
UTILITIES 8%
TRANSPORTATION 1%
RETAIL 5%
METALS & MINING 1%
FINANCE 16%
CHEMICALS & DRUGS 15%
CONSUMER PRODUCTS 11%
DURABLE GOODS 28%
ENERGY 7%
% OF TOTAL PORTFOLIO INVESTMENTS
- --------------------------------------------------------
DESCRIPTION SHARES VALUE (000)
- --------------------------------------------------------
COMMON STOCKS -- 99.6%
AEROSPACE & DEFENSE -- 0.5%
Lockheed Martin 6,800 $ 704
Raytheon 8,900 454
TRW 3,000 170
----------
1,328
----------
AGRICULTURE -- 0.1%
Pioneer Hi-Bred International 3,000 240
----------
AIR TRANSPORTATION -- 0.4%
AMR* 2,800 259
Delta Air Lines 2,500 205
Federal Express* 4,000 231
US Air Group* 7,800 273
----------
968
----------
AIRCRAFT -- 1.9%
Allied Signal 9,100 764
Boeing 24,810 1,316
McDonnell Douglas 8,200 562
Northrop Grumman 1,700 149
Parker Hannifin 2,850 173
Rockwell International 8,763 517
Textron 8,000 531
United Technologies 8,600 714
----------
4,726
----------
APPAREL/TEXTILES -- 0.3%
Liz Claiborne 5,000 233
Nike, Class B 8,800 514
Russell 3,100 92
----------
839
----------
APPLIANCES -- 0.1%
Allegheny Teledyne 8,300 224
----------
- -------------------------------------------------------
DESCRIPTION SHARES VALUE (000)
- -------------------------------------------------------
AUTOMOTIVE -- 1.8%
Chrysler 26,200 $ 860
Echlin 8,300 299
Ford Motor 43,400 1,638
General Motors 27,600 1,537
Paccar 3,000 139
----------
4,473
----------
BANKS -- 8.0%
Banc One 18,444 893
Bank of New York 13,000 566
BankAmerica 25,600 1,653
BankBoston 4,500 324
Bankers Trust New York 3,800 331
Barnett Banks of Florida 6,800 357
Chase Manhattan 15,766 1,530
Citicorp 16,800 2,025
Comerica 3,700 252
Fifth Third Bancorp 3,000 246
First Bank System 3,800 324
First Chicago 12,701 768
First Union 10,530 974
Fleet Financial Group 9,801 620
Golden West Financial 3,300 231
Great Western Financial 3,000 161
H.F. Ahmanson 2,400 103
J.P. Morgan 8,300 866
Keycorp 7,800 436
MBNA 11,925 437
Mellon Bank 11,400 514
National City 6,800 357
NationsBank 27,000 1,742
Norwest 15,300 861
PNC Bank 13,900 579
Providian Financial* 2,300 74
Suntrust Banks 8,400 463
U.S. Bancorp 4,300 276
UST 13,600 377
Wachovia 7,100 414
Wells Fargo 3,433 925
----------
19,679
----------
BEAUTY PRODUCTS -- 2.0%
Avon Products 3,200 226
Colgate Palmolive 10,492 685
Ecolab 3,300 158
International Flavors &
Fragrances 2,500 126
Procter & Gamble 25,400 3,588
----------
4,783
----------
BROADCASTING, CABLE TV, NEWSPAPERS
& ADVERTISING -- 0.6%
Comcast, Class A 14,200 304
Interpublic Group 2,200 135
Tele-Communications, Class A* 18,900 281
US West Media Group* 21,800 441
Viacom, Class B* 10,526 316
----------
1,477
----------
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
45
<PAGE>
STATEMENT
OF
NET ASSETS
AS OF
JUNE 30, 1997
EQUITY INDEX FUND (CONTINUED)
- -------------------------------------------------------
DESCRIPTION SHARES VALUE (000)
- -------------------------------------------------------
BUILDING & CONSTRUCTION -- 0.3%
Centex 2,400 $ 98
Fluor 1,900 105
Foster Wheeler 3,300 134
Halliburton 4,600 365
McDermott International 3,400 99
----------
801
----------
BUILDING MATERIALS -- 0.1%
Owens Corning 2,800 121
----------
CHEMICALS -- 2.7%
Air Products & Chemical 3,100 252
B.F. Goodrich 4,200 182
Dow Chemical 8,150 710
E.I. DuPont de Nemours 40,000 2,515
Eastman Chemical 5,700 362
FMC* 3,400 270
Great Lakes Chemical 300 16
Hercules 2,700 129
Monsanto 19,500 840
Morton International 10,300 311
Nalco Chemical 5,700 220
Praxair 3,500 196
Sigma Aldrich 10,600 372
Union Carbide 3,400 160
W.R. Grace & Company 3,100 171
----------
6,706
----------
COMMUNICATIONS EQUIPMENT -- 2.5%
Cabletron Systems* 5,800 164
Cisco Systems* 24,600 1,651
Lucent Technologies 23,300 1,679
Motorola 20,600 1,566
Northern Telecom 8,300 755
Tellabs* 6,200 346
----------
6,161
----------
COMPUTERS, SOFTWARE, & SERVICES -- 8.0%
3COM* 12,000 540
Autodesk 6,300 241
Automatic Data Processing 9,400 442
Ceridian* 3,400 144
Compaq Computer* 9,700 963
Computer Associates
International 12,050 671
Computer Sciences* 1,900 137
CUC International* 13,350 345
Dell Computer* 6,200 728
Digital Equipment* 3,900 138
EMC* 7,100 277
Equifax 6,000 223
First Data 15,400 677
Harris Computer Systems 1,600 134
Hewlett Packard 35,300 1,977
International Business Machines 37,800 3,409
Microsoft* 44,300 5,598
Novell* 29,300 203
Oracle Systems* 24,575 1,238
Parametric Technology* 5,000 213
Pitney Bowes 5,000 356
- -------------------------------------------------------
DESCRIPTION SHARES VALUE (000)
- -------------------------------------------------------
Seagate Technology* 7,200 $ 253
Shared Medical Systems 2,400 130
Silicon Graphics* 4,600 69
Sun Microsystems* 11,200 417
Tandy 2,000 112
----------
19,635
----------
CONTAINERS & PACKAGING -- 0.1%
Bemis 3,500 152
Crown Cork & Seal 3,700 198
----------
350
----------
DRUGS -- 8.3%
Abbott Labs 28,000 1,869
Allergan 4,300 137
American Home Products 22,800 1,744
Amgen* 9,600 558
Baxter International 7,800 408
Bristol-Myers Squibb 37,040 3,000
Eli Lilly 19,900 2,175
Merck 44,400 4,595
Pfizer 24,100 2,880
Pharmacia & Upjohn 16,255 565
Schering Plough 27,200 1,302
Warner Lambert 9,400 1,168
----------
20,401
----------
ELECTRICAL EQUIPMENT -- 3.7%
Emerson Electric 14,600 804
General Electric 120,900 7,904
Westinghouse Electric 21,500 497
----------
9,205
----------
ELECTRICAL SERVICES -- 2.1%
American Electric Power 5,300 223
Baltimore Gas & Electric 4,700 125
Carolina Power & Light 3,600 129
Central & South West 5,400 115
Cinergy 4,600 160
Consolidated Edison of New York 5,300 156
Dominion Resources of Virginia 5,500 201
DTE Energy 4,200 116
Duke Power 12,984 622
Edison International 13,400 333
Entergy 5,200 142
FPL Group 6,100 281
GPU 4,200 151
Niagara Mohawk Power* 26,200 224
Northern States Power 3,700 191
Pacificorp 6,400 141
PECO Energy 16,000 336
PG&E 11,500 279
PP&L Resources 5,500 110
Public Service Enterprise Group 5,500 138
Southern 20,100 440
Texas Utilities 7,300 251
Unicom 4,800 107
Union Electric Power 4,300 162
----------
5,133
----------
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
46
<PAGE>
[SQUARE BULLET] COREFUND EQUITY FUNDS
- -------------------------------------------------------
DESCRIPTION SHARES VALUE (000)
- -------------------------------------------------------
ENTERTAINMENT -- 0.9%
King World Productions* 6,600 $ 231
Walt Disney 24,926 2,000
----------
2,231
----------
ENVIRONMENTAL SERVICES -- 0.4%
Browning Ferris Industries 5,900 196
Laidlaw Incorporated, Class B 14,000 193
Waste Management 15,200 488
----------
877
----------
FINANCIAL SERVICES -- 3.3%
Allstate 15,700 1,146
American Express 16,600 1,237
Beneficial 2,400 171
Charles Schwab 6,400 260
Countrywide Credit Industries 6,000 187
FHLMC 30,200 1,038
FNMA 38,800 1,693
Green Tree Financial 5,900 210
Household International 4,100 482
Merrill Lynch 11,200 668
Morgan Stanley, Dean Witter,
Discover 19,330 832
Salomon 2,500 139
----------
8,063
----------
FOOD, BEVERAGE & TOBACCO -- 8.6%
Anheuser Busch 16,400 688
Archer Daniels Midland 16,455 387
Brown Forman, Class B 2,700 132
Campbell Soup 16,200 810
Coca Cola 91,600 6,389
ConAgra 7,300 468
Coors, Adolph, Class B 5,600 149
CPC International 5,400 499
Fortune Brands 700 26
General Mills 5,900 384
H.J. Heinz 16,650 768
Hershey Foods 4,000 221
Kellogg 7,600 651
Pepsico 56,800 2,134
Philip Morris 89,400 3,967
Quaker Oats 5,800 260
Ralston-Purina Group 3,900 321
Sara Lee 16,900 703
Seagram 12,300 495
Unilever 5,900 1,263
Whitman 5,100 129
Wrigley, William Jr. 4,000 268
----------
21,112
----------
GAS/NATURAL GAS -- 1.0%
Coastal 2,500 133
Columbia Gas Systems 3,500 228
Consolidated Natural Gas 6,600 355
Enron 7,300 298
Nicor 3,700 133
Noram Energy 17,800 271
Oneok 5,900 190
Pacific Enterprises 3,800 128
- -------------------------------------------------------
DESCRIPTION SHARES VALUE (000)
- -------------------------------------------------------
Peoples Energy 4,100 $ 154
Sonat 6,800 349
Williams 3,750 164
----------
2,403
----------
GLASS PRODUCTS -- 0.3%
Corning 7,300 406
PPG Industries 7,300 424
----------
830
----------
HOTELS & LODGING -- 0.4%
HFS* 4,100 238
Hilton Hotels 8,500 226
ITT Corporation* 3,600 220
Marriott International 2,900 178
----------
862
----------
HOUSEHOLD FURNITURE & FIXTURES-- 0.4%
Armstrong World Industries 1,600 117
Masco 3,500 146
Newell 3,600 143
Sherwin Williams 4,600 142
Snap-On Tools 4,050 159
Stanley Works 3,600 144
----------
851
----------
HOUSEHOLD PRODUCTS -- 1.1%
Clorox 2,900 383
Gillette 20,500 1,942
National Service Industries 3,000 146
Whirlpool 5,700 311
----------
2,782
----------
INSURANCE -- 4.2%
Aetna 5,308 543
American General 9,716 464
American International Group 17,000 2,539
AON 5,250 272
Chubb 6,600 441
Cigna 2,900 515
Conseco 5,600 207
General Re 2,400 437
Hartford Financial
Services Group 3,100 257
Lincoln National 2,100 135
Loews 3,400 340
Marsh and McLennan 7,400 528
MBIA 1,900 214
MGIC Investment 5,000 240
Safeco 2,800 131
St. Paul 2,827 216
Torchmark 5,400 385
Transamerica 1,600 150
Travelers 21,866 1,379
United Healthcare 5,100 265
Unum 6,000 252
USF&G 13,500 324
----------
10,234
----------
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
47
<PAGE>
STATEMENT
OF
NET ASSETS
AS OF
JUNE 30, 1997
EQUITY INDEX FUND (CONTINUED)
- -------------------------------------------------------
DESCRIPTION SHARES VALUE (000)
- -------------------------------------------------------
LUMBER & WOOD PRODUCTS -- 0.1%
Georgia Pacific 2,700 $ 231
Potlatch 2,100 95
----------
326
----------
MACHINERY -- 1.7%
Baker Hughes 1,000 39
Black & Decker 3,500 130
Briggs & Stratton 3,800 190
Brunswick 9,500 297
Case 3,000 207
Caterpillar 6,900 741
Crane 4,650 194
Deere 7,800 428
Dover 2,800 172
Eaton 2,700 236
General Instrument* 5,800 145
Illinois Tool Works 8,200 410
Ingersoll Rand 2,400 148
Tenneco 5,000 226
Timken 5,000 178
Tyco International 5,300 369
----------
4,110
----------
MEASURING DEVICES -- 0.5%
Honeywell 4,400 334
Johnson Controls 3,000 123
Millipore 3,400 150
Perkin Elmer 2,000 159
Tektronix 3,500 210
Thermo Electron* 5,100 173
----------
1,149
----------
MEDICAL PRODUCTS & SERVICES-- 3.0%
Becton Dickinson 4,600 233
Beverly Enterprises* 19,600 319
Biomet* 7,400 138
Boston Scientific* 5,800 356
Cardinal Health 4,000 229
Columbia/HCA Healthcare 22,850 898
Guidant 3,000 255
Healthsouth* 11,000 274
Humana* 10,800 250
Johnson & Johnson 48,000 3,090
Manor Care 3,900 127
Medtronic 8,000 648
Tenet Healthcare* 12,900 381
U.S. Surgical 6,000 224
----------
7,422
----------
METALS & MINING -- 0.9%
Alcan Aluminum 7,700 267
Aluminum Company of America 5,200 392
Asarco 3,300 101
Cyprus AMAX Minerals 7,400 181
Freeport-McMoran Copper
and Gold, Class B 6,000 187
Inco 7,600 228
Newmont Mining 10,770 420
Phelps Dodge 1,600 136
Reynolds Metals 3,500 249
----------
2,161
----------
- -------------------------------------------------------
DESCRIPTION SHARES VALUE (000)
- -------------------------------------------------------
MISCELLANEOUS CHEMICAL PRODUCTS-- 0.1%
Raychem 1,900 $ 141
----------
MISCELLANEOUS CONSUMER SERVICES-- 0.2%
Gallaher Group PLC* 7,600 140
H & R Block 7,000 226
Service International 5,800 191
----------
557
----------
MISCELLANEOUS MANUFACTURING-- 0.3%
Hasbro 3,600 102
ITT Industries* 10,500 270
Mattel 8,250 279
----------
651
----------
PAPER & PAPER PRODUCTS -- 1.9%
Avery Dennison 4,600 185
Champion International 2,200 122
International Paper 12,035 584
James River 3,200 118
Kimberly Clark 23,704 1,179
Minnesota Mining &
Manufacturing 14,600 1,489
Stone Container 3,800 54
Temple Inland 2,400 130
Union Camp 4,750 238
Westvaco 3,150 99
Weyerhaeuser 6,006 312
Willamette Industries 1,900 133
----------
4,643
----------
PETROLEUM REFINING -- 8.6%
Amerada Hess 2,100 117
Amoco 17,500 1,521
Ashland 4,300 199
Atlantic Richfield 12,000 846
Burlington Resources 2,900 128
Chevron 23,300 1,723
Enserch 6,600 147
Exxon 90,900 5,590
Helmerich and Payne 6,600 380
Mobil 28,800 2,012
Occidental Petroleum 9,900 248
Oryx Energy* 8,400 177
Phillips Petroleum 7,200 315
Rowan Companies* 10,000 282
Royal Dutch Petroleum ADR 76,800 4,176
Santa Fe Energy Resources* 7,300 107
Schlumberger 8,900 1,113
Sun 8,200 254
Texaco 7,800 848
Union Pacific Resources Group 8,629 215
Unocal 8,900 345
USX Marathon Group 9,500 274
Western Atlas* 3,000 220
----------
21,237
----------
PHOTOGRAPHIC EQUIPMENT & SUPPLIES-- 0.8%
Eastman Kodak 11,300 867
Polaroid 6,100 339
Xerox 10,800 852
----------
2,058
----------
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
48
<PAGE>
[SQUARE BULLET] COREFUND EQUITY FUNDS
- -------------------------------------------------------
DESCRIPTION SHARES VALUE (000)
- -------------------------------------------------------
PRECIOUS METALS -- 0.2%
Barrick Gold 12,000 $ 264
Echo Bay Mines 9,100 51
Placer Dome Group 5,400 88
----------
403
----------
PRINTING & PUBLISHING -- 1.2%
Deluxe 2,500 85
Donnelly R.R. & Sons 9,200 337
Dow Jones 5,600 225
Gannett 4,800 474
Knight-Ridder 3,000 147
McGraw-Hill 2,200 129
Meredith 6,000 174
New York Times, Class A 3,200 162
Time Warner, Class A 19,800 955
Times Mirror, Class A 3,900 222
Tribune 3,000 144
----------
3,054
----------
PROFESSIONAL SERVICES -- 0.2%
Cognizant 11,000 446
Dun & Bradstreet 4,700 123
----------
569
----------
RAILROADS -- 0.8%
Burlington Northern Santa Fe 5,464 491
CSX 8,200 455
Norfolk Southern 4,600 463
Union Pacific 8,300 585
----------
1,994
----------
RETAIL -- 5.1%
Albertson's 8,400 307
American Stores 3,200 158
Autozone* 10,000 236
Charming Shoppes* 35,000 183
Circuit City Stores 3,000 107
Costco Companies* 10,900 358
CVS 6,400 328
Darden Restaurants 11,800 107
Dayton-Hudson 7,800 415
Dillards, Class A 9,700 336
Federated Department Stores* 5,700 198
Gap 9,600 373
Giant Food, Class A 3,900 126
Harcourt General 2,300 110
Home Depot 17,066 1,177
J.C. Penney 8,600 449
K Mart* 10,000 123
Kroger* 6,200 180
Limited 9,500 192
Lowes 5,500 204
May Department Stores 6,900 326
McDonald's 24,900 1,203
Mercantile Stores 2,500 157
Rite Aid 3,700 185
Sears Roebuck 13,500 726
TJX Companies 13,400 353
Toys R Us* 9,800 343
Wal Mart Stores 82,600 2,793
- -------------------------------------------------------
DESCRIPTION SHARES VALUE (000)
- -------------------------------------------------------
Walgreen 7,600 $ 408
Wendy's International 5,900 153
Winn Dixie Stores 3,400 127
Woolworth* 7,500 180
----------
12,621
----------
RUBBER & PLASTIC -- 0.5%
Goodyear Tire & Rubber 5,380 341
Reebok International 7,300 341
Rubbermaid 8,500 253
Tupperware 5,700 208
----------
1,143
----------
SEMI-CONDUCTORS/INSTRUMENTS-- 2.7%
Advanced Micro Devices* 7,500 270
AMP 6,200 259
Applied Materials* 6,600 467
Intel 30,100 4,269
LSI Logic* 4,000 128
Micron Technology 5,900 236
National Semiconductor* 5,600 172
Texas Instruments 6,600 555
Thomas & Betts 5,000 263
----------
6,619
----------
SPECIALTY MACHINERY -- 0.1%
Cooper Industries 2,600 129
----------
STEEL & STEEL WORKS -- 0.1%
Bethlehem Steel* 5,900 62
Nucor 2,000 115
USX U.S. Steel Group 1,900 67
Worthington Industries 4,600 84
----------
328
----------
TELEPHONES & TELECOMMUNICATION-- 6.1%
AT&T 58,736 2,059
Airtouch Communications* 19,100 523
Alltel 5,500 184
Ameritech 21,800 1,481
Bell Atlantic 17,400 1,320
Bellsouth 36,100 1,674
GTE 33,600 1,474
MCI Communications 26,658 1,021
NYNEX 14,600 841
SBC Telecommunications 33,586 2,078
Sprint 14,000 737
US West 17,600 663
Worldcom* 33,500 1,072
----------
15,127
----------
TRUCKING -- 0.1%
Ryder System 5,000 165
----------
WHOLESALE -- 0.3%
Genuine Parts 4,200 142
Ikon Office Solutions 11,600 289
Sysco 4,100 150
W.W. Grainger 2,000 156
----------
737
----------
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
49
<PAGE>
STATEMENT
OF
NET ASSETS
AS OF
JUNE 30, 1997
EQUITY INDEX FUND (CONCLUDED)
- --------------------------------------------------------
DESCRIPTION PAR (000) VALUE (000)
- --------------------------------------------------------
TOTAL COMMON STOCKS
(Cost $146,336) $244,839
----------
REPURCHASE AGREEMENTS -- 0.1%
Aubrey Lanston
5.90%, dated 06/30/97, matures
07/01/97, repurchase price
$183,030 (collateralized by U.S.
Treasury Note, par value $145,000,
11.875%, 11/15/03; market
value $188,152) $183 183
Swiss Bank
5.875%, dated 06/30/97, matures
07/01/97, repurchase price
$183,030 (collateralized by U.S.
Treasury Note, par value $190,000,
5.625%, 11/30/00; market value
$187,397) 183 183
----------
TOTAL REPURCHASE AGREEMENTS
(Cost $366) 366
----------
TOTAL INVESTMENTS -- 99.7%
(Cost $146,702) 245,205
----------
OTHER ASSETS AND LIABILITIES,
NET -- 0.3% 715
----------
NET ASSETS:
Portfolio Shares -- Class Y ($0.001 par
value -- 500 million authorized shares)
based on 6,456,231 outstanding shares
of beneficial interest 139,806
Portfolio Shares -- Class A ($0.001 par
value -- 500 million authorized shares)
based on 120,606 outstanding shares
of beneficial interest 4,032
Accumulated Net Realized Gain
on Investments 3,579
Net Unrealized Appreciation
on Investments 98,503
----------
TOTAL NET ASSETS -- 100.0% $245,920
==========
NET ASSET VALUE AND REDEMPTION
PRICE PER SHARE -- CLASS Y $37.39
==========
NET ASSET VALUE AND REDEMPTION
PRICE PER SHARE -- CLASS A $37.37
==========
* NON INCOME PRODUCING SECURITY
ADR -- AMERICAN DEPOSITORY RECEIPT
FHLMC -- FEDERAL HOME LOAN MORTGAGE CORPORATION
FNMA -- FEDERAL NATIONAL MORTGAGE ASSOCIATION
PLC -- PUBLIC LIMITED COMPANY
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
CORE EQUITY FUND
MISCELLANEOUS 7%
UTILITIES 12%
TRANSPORTATION 2%
RETAIL 5%
HEALTHCARE SERVICES 2%
FINANCE 13%
CHEMICALS & DRUGS 7%
CONSUMER PRODUCTS 10%
DURABLE GOODS 37%
ENERGY 5%
% OF TOTAL PORTFOLIO INVESTMENTS
- --------------------------------------------------------
DESCRIPTION SHARES VALUE (000)
- --------------------------------------------------------
COMMON STOCKS -- 100.1%
AIRCRAFT -- 2.4%
Boeing 120,000 $ 6,367
McDonnell Douglas 35,000 2,397
Textron 60,000 3,982
----------
12,746
----------
APPAREL/TEXTILES -- 0.1%
Burlington Industries* 49,771 597
----------
AUTOMOTIVE -- 1.6%
Allied Signal 60,000 5,040
Ford Motor 91,900 3,469
----------
8,509
----------
BEAUTY PRODUCTS -- 0.1%
USA Detergents* 56,500 579
----------
BROADCASTING, NEWSPAPERS
& ADVERTISING -- 0.6%
Emmis Broadcasting* 77,500 3,381
----------
BUILDING & CONSTRUCTION -- 1.2%
Clayton Homes 250,000 3,563
Foster Wheeler 62,500 2,531
----------
6,094
----------
CHEMICALS -- 4.4%
Hercules 20,000 958
IMC Global 120,000 4,200
Monsanto 99,000 4,263
Praxair 128,000 7,168
3COM* 147,500 6,638
----------
23,227
----------
50
<PAGE>
[SQUARE BULLET] COREFUND EQUITY FUNDS
- -------------------------------------------------------
DESCRIPTION SHARES VALUE (000)
- -------------------------------------------------------
COMMUNICATIONS EQUIPMENT -- 2.2%
Cabletron Systems* 86,000 $ 2,435
ITT Industries 47,500 1,223
Lucent Technologies 51,853 3,737
Motorola 53,700 4,081
----------
11,476
----------
COMPUTERS & SERVICES -- 6.9%
America Online* 35,000 1,947
Computer Associates
International 125,000 6,961
International Business
Machines 160,000 14,430
Microsoft* 70,000 8,846
Storage Technology* 100,000 4,450
----------
36,634
----------
CONTAINERS & PACKAGING -- 0.4%
Ball 67,500 2,029
----------
DRUGS -- 8.6%
Biogen* 210,000 7,114
Eli Lilly & Co. 160,900 17,588
General Electric 235,000 15,363
Ivax 126,900 1,428
Mylan Laboratories 275,200 4,059
----------
45,552
----------
ELECTRICAL SERVICES -- 2.0%
FPL Group 55,000 2,533
Pinnacle West Capital 125,000 3,758
Unicom 196,500 4,372
----------
10,663
----------
ENVIRONMENTAL SERVICES -- 1.5%
Browning Ferris Industries 240,000 7,980
----------
FINANCIAL SERVICES -- 1.1%
Equity Residential
Properties Trust 108,000 5,130
Mercury Finance 330,000 804
----------
5,934
----------
FOOD, BEVERAGE & TOBACCO -- 8.0%
Canandaigua Wine, Class A* 195,005 6,630
Chiquita Brands International 460,000 6,325
Nabisco Holdings, Class A 330,000 13,159
Philip Morris 150,500 6,678
RJR Nabisco Holdings 288,200 9,511
----------
42,303
----------
HEALTHCARE SERVICES -- 2.1%
Medpartners* 525,572 11,365
----------
HOTELS & LODGING -- 3.5%
Felcor Suite Hotels 110,000 4,098
HFS* 180,000 10,440
Hilton Hotels 150,000 3,984
----------
18,522
----------
- -------------------------------------------------------
DESCRIPTION SHARES VALUE (000)
- -------------------------------------------------------
INSURANCE -- 12.2%
Conseco 200,000 $ 7,400
Equitable 225,800 7,508
Everest Reinsurance Holdings 287,000 11,372
General Re 67,500 12,285
Hartford Financial
Services Group 96,900 8,018
Sunamerica 75,000 3,656
Travelers 166,000 10,468
Travelers Property Casualty 100,000 3,988
----------
64,695
----------
MACHINERY -- 1.6%
Case 45,000 3,099
Cummins Engine 75,000 5,292
----------
8,391
----------
MEASURING DEVICES -- 1.0%
Thermo Electron* 150,000 5,100
----------
MEDICAL PRODUCTS & SERVICES-- 2.7%
Alza* 189,300 5,478
Human Genome Sciences* 24,700 821
United States Surgical 220,000 8,195
----------
14,494
----------
METALS & MINING -- 1.2%
Freeport-McMoran Copper
and Gold, Class B 75,000 2,334
Potash of Saskatchewan 54,000 4,053
----------
6,387
----------
PETROLEUM & FUEL PRODUCTS -- 3.5%
Louisiana Land & Exploration 23,000 1,314
Reading & Bates* 105,000 2,809
Repsol ADR 85,000 3,607
Tidewater 114,300 5,029
Triton Energy, Class A* 70,000 3,207
USX Marathon Group 95,000 2,743
----------
18,709
----------
PETROLEUM REFINING -- 5.0%
British Petroleum ADR 136,218 10,199
Mobil 195,000 13,626
Texaco 27,500 2,991
----------
26,816
----------
PHOTOGRAPHIC EQUIPMENT & SUPPLIES -- 0.7%
Xerox 50,000 3,944
----------
PRINTING & PUBLISHING -- 0.3%
News ADR 110,000 1,719
----------
RAILROADS -- 0.8%
CSX 45,000 2,498
Union Pacific 25,000 1,763
----------
4,261
----------
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
51
<PAGE>
STATEMENT
OF
NET ASSETS
AS OF
JUNE 30, 1997
CORE EQUITY FUND (CONCLUDED)
- -------------------------------------------------------
DESCRIPTION SHARES VALUE (000)
- -------------------------------------------------------
REAL ESTATE -- 0.2%
Kimco Realty 37,500 $ 1,191
----------
RESTAURANTS -- 0.9%
Darden Restaurants 410,000 3,716
Lone Star Steakhouse & Saloon* 45,000 1,170
----------
4,886
----------
RETAIL -- 5.3%
Albertson's 75,000 2,738
CML Group 275,000 498
Corporate Express* 185,000 2,671
General Nutrition* 322,750 9,037
Lowes 58,400 2,168
Pep Boys - Manny,
Moe & Jack 185,000 6,302
Saks Holdings* 60,000 1,500
Staples* 137,600 3,199
----------
28,113
----------
RUBBER & PLASTIC -- 1.4%
Goodyear Tire & Rubber 120,000 7,598
----------
SEMI-CONDUCTORS/INSTRUMENTS -- 2.7%
Intel 77,500 10,990
VLSI Technology* 135,000 3,189
----------
14,179
----------
STEEL & STEEL WORKS -- 0.3%
USX U.S. Steel Group 45,000 1,578
----------
TELEPHONES &
TELECOMMUNICATION -- 12.8%
Airtouch Communications* 860,000 23,543
Bellsouth 76,000 3,525
Mcleod, Class A* 185,000 6,244
Qualcomm* 170,000 8,649
Qwest Communications Int'l* 70,700 1,927
Worldcom* 754,600 24,147
----------
68,035
----------
WATER TREATMENT -- 0.8%
U.S. Filter* 150,000 4,088
----------
TOTAL COMMON STOCKS
(Cost $420,376) 531,775
----------
- -------------------------------------------------------
DESCRIPTION PAR (000) VALUE (000)
- -------------------------------------------------------
REPURCHASE AGREEMENTS -- 0.1%
Aubrey Lanston
5.90%, dated 06/30/97, matures
07/01/97, repurchase price $66,011
(collateralized by U.S. Treasury Note,
par value $50,000, 11.875%,
11/15/03; market value $67,320) $66 $ 66
Sanwa Bank
5.85%, dated 06/30/97, matures
07/01/97, repurchase price $66,011
(collateralized by U.S. Treasury Note,
par value $65,000, 6.625%, 06/30/01;
market value $67,320) 66 66
----------
TOTAL REPURCHASE AGREEMENTS
(Cost $132) 132
----------
TOTAL INVESTMENTS -- 100.2%
(Cost $420,508) 531,907
----------
OTHER ASSETS AND LIABILITIES,
NET -- (0.2%) (849)
----------
NET ASSETS:
Portfolio Shares -- Class Y ($0.001 par
value -- 50 million authorized) based on
24,395,839 outstanding shares 363,289
Portfolio Shares -- Class A ($0.001 par
value -- 50 million authorized) based on
759,395 outstanding shares 10,067
Accumulated Net Realized Gain
on Investments 46,302
Net Unrealized Appreciation
on Investments 111,399
Undistributed Net Investment Income 1
----------
TOTAL NET ASSETS -- 100.0% $531,058
==========
NET ASSET VALUE AND REDEMPTION
PRICE PER SHARE -- CLASS Y $21.11
==========
NET ASSET VALUE AND REDEMPTION
PRICE PER SHARE -- CLASS A $21.13
==========
* NON-INCOME PRODUCING SECURITY
ADR -- AMERICAN DEPOSITORY RECEIPT
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
52
<PAGE>
[SQUARE BULLET] COREFUND EQUITY FUNDS
GROWTH EQUITY FUND
MISCELLANEOUS 3%
UTILITIES 1%
RETAIL 11%
FINANCE 14%
ENERGY 5%
CASH EQUIVALENTS 5%
CHEMICAL & DRUGS 15%
CONSUMER PRODUCTS 8%
DURABLE GOODS 39%
% OF TOTAL PORTFOLIO INVESTMENTS
- -------------------------------------------------------
DESCRIPTION SHARES VALUE (000)
- -------------------------------------------------------
COMMON STOCKS -- 98.4%
AIRCRAFT -- 2.0%
Allied Signal 20,000 $ 1,680
Boeing 26,000 1,380
----------
3,060
----------
BANKS -- 6.9%
Barnett Banks of Florida 50,000 2,625
Citicorp 24,643 2,971
J.P. Morgan 28,000 2,922
Norwest 35,000 1,969
----------
10,487
----------
BEAUTY PRODUCTS -- 2.4%
Colgate Palmolive 56,000 3,654
----------
CHEMICALS -- 1.9%
Monsanto 66,600 2,868
----------
COMMUNICATIONS EQUIPMENT -- 4.0%
Cisco Systems* 43,900 2,947
Motorola 41,600 3,162
----------
6,109
----------
COMPUTERS, SOFTWARE & SERVICES-- 13.6%
Compaq Computer* 32,000 3,176
Computer Associates
International 53,926 3,003
Microsoft* 25,032 3,163
Oracle Systems* 81,124 4,087
Parametric Technology* 56,200 2,392
Paychex 36,787 1,398
Peoplesoft* 66,000 3,481
----------
20,700
----------
- -------------------------------------------------------
DESCRIPTION SHARES VALUE (000)
- -------------------------------------------------------
DRUGS -- 9.0%
Johnson & Johnson 49,000 $ 3,154
Merck 15,900 1,646
Schering Plough 40,000 1,915
SmithKline Beecham ADR 38,550 3,532
Warner Lambert 28,000 3,479
----------
13,726
----------
ELECTRICAL EQUIPMENT -- 5.4%
General Electric 47,178 3,084
Illinois Tool Works 70,000 3,496
Westinghouse Electric 70,400 1,628
----------
8,208
----------
ENTERTAINMENT -- 1.8%
Walt Disney 34,300 2,753
----------
FINANCIAL SERVICES -- 4.0%
FHLMC 85,000 2,922
FNMA 74,656 3,257
----------
6,179
----------
FOOD, BEVERAGE & TOBACCO -- 4.3%
Coca Cola 25,600 1,786
ConAgra 25,000 1,603
Hershey Foods 30,000 1,659
Sara Lee 38,500 1,603
----------
6,651
----------
HEALTHCARE SERVICES -- 2.3%
Health Management Associates* 124,025 3,535
----------
HOUSEHOLD PRODUCTS -- 3.7%
Gillette 34,800 3,297
Sunbeam Oster 62,100 2,344
----------
5,641
----------
INSURANCE -- 2.9%
American International Group 18,400 2,748
Oxford Health Plan* 22,300 1,600
----------
4,348
----------
MEASURING DEVICES -- 1.0%
Honeywell 21,000 1,593
----------
MEDICAL INFORMATION SYSTEMS -- 2.2%
HBO 48,000 3,306
----------
MEDICAL PRODUCTS & SERVICES-- 3.6%
Acuson* 112,000 2,576
Cardinal Health 51,600 2,954
----------
5,530
----------
PETROLEUM REFINING -- 4.7%
Baker Hughes 38,000 1,470
Halliburton 48,000 3,804
Schlumberger 15,100 1,887
----------
7,161
----------
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
53
<PAGE>
STATEMENT
OF
NET ASSETS
AS OF
JUNE 30, 1997
GROWTH EQUITY FUND (CONCLUDED)
- -------------------------------------------------------
DESCRIPTION SHARES/PAR (000) VALUE (000)
- -------------------------------------------------------
RETAIL -- 10.8%
Costco* 45,000 $ 1,479
Dayton-Hudson 72,000 3,829
Gap 90,000 3,499
Home Depot 56,000 3,861
Walgreen 70,000 3,754
----------
16,422
----------
SEMI-CONDUCTORS/INSTRUMENTS -- 3.6%
Intel 27,400 3,886
Linear Technology 30,000 1,553
----------
5,439
----------
TELEPHONES & TELECOMMUNICATION -- 8.3%
Brooks Fiber Properties* 97,400 3,287
LCI International* 126,834 2,774
McLeod, Class A* 82,000 2,768
Qualcomm* 49,900 2,539
Worldcom* 38,137 1,220
----------
12,588
----------
TOTAL COMMON STOCKS
(Cost $104,982) 149,958
----------
REPURCHASE AGREEMENTS -- 4.0%
Aubrey Lanston
5.90%, dated 06/30/97, matures
07/01/97, repurchase price
$2,048,336 (collateralized by U.S.
Treasury Note, par value $1,610,000,
11.875%, 11/15/03;
market value $2,089,136) $2,048 2,048
Hong Kong Shanghai Bank
5.80%, dated 06/30/97, matures
07/01/97, repurchase
price $2,048,330 (collateralized
by U.S. Treasury Note, par value
$1,990,000, 7.25%, 05/15/04;
market value $2,100,843) 2,048 2,048
Sanwa Bank
5.85%, dated 06/30/97, matures
07/01/97, repurchase price
$2,048,333 (collateralized by
U.S. Treasury Note, par value
$2,070,000, 6.625%, 06/30/01;
market value $2,094,840) 2,048 2,048
----------
TOTAL REPURCHASE AGREEMENTS
(Cost $6,144) 6,144
----------
TOTAL INVESTMENTS -- 102.4%
(Cost $111,126) 156,102
----------
OTHER ASSETS AND LIABILITIES,
NET -- (2.4%) (3,709)
----------
- --------------------------------------------------------
DESCRIPTION VALUE (000)
- --------------------------------------------------------
NET ASSETS:
Portfolio Shares -- Class Y ($0.001 par
value -- 100 million authorized) based
on 9,573,636 outstanding shares $ 97,352
Portfolio Shares -- Class A ($0.001
par value -- 100 million authorized)
based on 304,852 outstanding shares 3,280
Accumulated Net Realized Gain
on Investments 6,786
Net Unrealized Appreciation
on Investments 44,976
Distributions in Excess of Net
Investment Income (1)
----------
TOTAL NET ASSETS -- 100.0% $152,393
==========
NET ASSET VALUE AND REDEMPTION
PRICE PER SHARE -- CLASS Y $15.43
==========
NET ASSET VALUE AND REDEMPTION
PRICE PER SHARE -- CLASS A $15.39
==========
* NON-INCOME PRODUCING SECURITY
ADR -- AMERICAN DEPOSITORY RECEIPT
FHLMC -- FEDERAL HOME LOAN MORTGAGE CORPORATION
FNMA -- FEDERAL NATIONAL MORTGAGE ASSOCIATION
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
54
<PAGE>
[SQUARE BULLET] COREFUND EQUITY FUNDS
SPECIAL EQUITY FUND
MISCELLANEOUS 13%
UTILITIES 3%
REAL ESTATE 3%
FINANCE 9%
ENERGY 2%
BUILDING & CONSTRUCTION 3%
CASH EQUIVALENTS 1%
CHEMICAL & DRUGS 13%
CONSUMER PRODUCTS 9%
DURABLE GOODS 44%
% OF TOTAL PORTFOLIO INVESTMENTS
- -------------------------------------------------------
DESCRIPTION SHARES VALUE (000)
- -------------------------------------------------------
COMMON STOCKS -- 99.3%
AIRCRAFT -- 0.7%
McDonnell Douglas 7,500 $ 514
----------
APPAREL/TEXTILES -- 2.1%
Burlington Industries* 5,117 61
Fieldcrest Cannon* 17,400 331
Haggar 20,000 255
Mothers Work* 17,500 127
Oneita Industries* 55,000 22
Oxford Industries 20,000 567
Quaker Fabric* 11,900 196
----------
1,559
----------
AUTOMOTIVE -- 0.4%
Earl Scheib* 4,900 30
Ford Motor 5,000 189
Walbro 3,000 61
----------
280
----------
BUILDING & CONSTRUCTION -- 1.3%
Cavalier Homes 20,483 205
Jacobs Engineering Group* 29,500 793
----------
998
----------
CHEMICALS -- 2.2%
Kinark* 57,500 194
Royal Group Technologies Ltd* 27,500 729
----------
1,733
----------
COMMUNICATIONS EQUIPMENT -- 3.6%
Ciena* 10,700 504
ITT Industries 5,000 129
Scientific-Atlanta 31,000 678
VDI Media* 120,000 1,350
----------
2,661
----------
- -------------------------------------------------------
DESCRIPTION SHARES VALUE (000)
- -------------------------------------------------------
COMPUTERS & SERVICES -- 4.9%
America Online* 8,000 $ 445
Apex PC Solutions Inc* 36,000 711
Computer Associates
International 7,000 390
Gametek* 10,000 11
International Business
Machines 11,000 992
Mizar* 18,200 66
Mylex* 75,000 712
Pace Health
Management Systems* 43,500 98
Video Lotteries Technologies* 34,200 205
----------
3,630
----------
CONTAINERS & PACKAGING -- 1.2%
Ball 20,000 601
Cronos Group* 31,400 216
Silgan Holdings* 1,000 39
----------
856
----------
DRUGS -- 11.3%
Anesta* 45,200 859
Aphton* 52,500 774
Biogen* 6,500 220
ChiRex* 62,000 736
Collagenex Pharmaceuticals* 46,300 556
Flamel Technologies ADR* 97,700 446
Guilford Pharmaceuticals* 40,500 982
Hybridon* 22,500 112
Ilex Oncology* 31,500 500
Isis Pharmaceutical* 27,300 398
Medpartners* 45,000 973
Pharmaceutical Resources* 105,000 289
Roberts Pharmaceuticals* 12,500 140
Scios Nova* 218,200 1,391
----------
8,376
----------
ELECTRICAL EQUIPMENT -- 1.2%
Magnetek* 54,000 898
----------
ELECTRONICS -- 4.0%
Kuhlman 50,000 1,612
Lam Research* 12,700 471
Smartflex Systems* 2,300 22
Teradyne* 23,000 903
----------
3,008
----------
ENERGY & POWER -- 0.3%
Comfort Systems USA Inc* 14,500 227
----------
ENTERTAINMENT -- 1.0%
Boomtown* 5,700 51
Cinergi Pictures Entertainment* 14,300 18
Meridian Sports* 17,300 22
Mikohn Gaming* 110,000 481
Sports Club* 38,000 204
----------
776
----------
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
55
<PAGE>
STATEMENT
OF
NET ASSETS
AS OF
JUNE 30, 1997
SPECIAL EQUITY FUND (CONTINUED)
- --------------------------------------------------------
DESCRIPTION SHARES VALUE (000)
- --------------------------------------------------------
ENVIRONMENTAL SERVICES -- 1.5%
Harding Lawson
Associates Group* 40,300 $ 281
Philip Services* 52,500 833
----------
1,114
----------
FINANCIAL SERVICES -- 3.6%
Aames Financial 46,500 860
Arm Financial Group* 4,500 90
Delta Financial* 34,700 664
Mercury Finance 75,000 183
Prentiss Properties Trust 34,000 871
----------
2,668
----------
FOOD, BEVERAGE & TOBACCO -- 2.9%
General Nutrition* 36,700 1,028
Philip Morris 10,300 457
RJR Nabisco Holdings 20,200 667
Rymer Foods* 60,100 3
----------
2,155
----------
HOTELS & LODGING -- 3.3%
HFS* 18,500 1,073
John Q. Hammons Hotels* 9,600 89
Prime Hospitality* 64,500 1,274
U.S. Franchise Systems, Class A* 4,500 44
----------
2,480
----------
HOUSEHOLD FURNISHINGS -- 0.6%
Winsloew Furniture* 44,180 483
----------
INSURANCE -- 5.7%
Conseco 18,000 666
Everest Reinsurance Holdings 32,300 1,280
Gryphon Holdings* 36,700 560
Sunamerica 7,500 366
Travelers 9,501 599
Travelers Property Casualty 18,100 722
----------
4,193
----------
MACHINERY -- 3.4%
Case 12,500 861
Cummins Engine 17,000 1,200
First Aviation* 45,000 439
----------
2,500
----------
MEASURING DEVICES -- 0.9%
Rofin-Sinar Technologies* 36,000 688
----------
MEDICAL PRODUCTS & SERVICES-- 5.7%
Acme United* 129,200 791
American Retirement* 23,000 408
Coast Dental Services* 4,500 69
Emeritus* 27,000 398
Harborside Healthcare* 18,000 256
Innovasive Devices* 9,000 106
Metra Biosystems* 6,800 33
Molecular Dynamics* 1,400 20
Possis Medical* 22,600 381
Quest Medical* 9,000 82
- --------------------------------------------------------
DESCRIPTION SHARES VALUE (000)
- --------------------------------------------------------
Resound* 47,400 $ 267
Spectranetics* 27,000 86
United States Surgical 22,500 838
Urologix* 26,500 450
Value Health* 5,400 109
----------
4,294
----------
METALS & MINING -- 1.6%
Potash of Saskatchewan 4,300 323
UCAR International* 18,500 846
----------
1,169
----------
MISCELLANEOUS BUSINESS SERVICES-- 0.5%
Mecon* 62,000 194
RMH Teleservices* 27,500 206
----------
400
----------
MISCELLANEOUS MANUFACTURING-- 1.4%
Foster Wheeler 20,000 810
RMI Titanium* 35,000 954
----------
1,764
----------
PETROLEUM & FUEL PRODUCTS -- 3.3%
Cairn Energy USA* 63,200 829
Callon Petroleum* 9,000 144
Shaw Group* 35,000 569
Tidewater 20,000 880
----------
2,422
----------
PETROLEUM REFINING -- 0.7%
USX-U.S. Steel Group 14,000 491
----------
RAILROADS -- 0.7%
Union Pacific 7,000 493
----------
REAL ESTATE -- 2.1%
Agree Realty 9,400 193
Liberty Property Trust 25,800 642
Pacific Gulf Properties 31,400 691
----------
1,526
----------
RESTAURANTS/FOOD SERVICES -- 1.5%
Darden Restaurants 50,000 453
Uno Restaurant* 90,000 636
Vie de France* 21,000 28
----------
1,117
----------
RETAIL -- 4.4%
Bon-Ton Stores* 46,300 370
Chicos* 4,500 24
Corporate Express* 42,500 614
CML Group 92,200 167
Cross-Continent Auto Retailers* 65,000 687
Drug Emporium* 92,100 472
Hot Topic* 4,400 99
Microage* 40,000 735
Sportmart* 14,400 54
Sportmart, Class A* 14,400 40
Strouds* 19,000 33
----------
3,295
----------
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
56
<PAGE>
[SQUARE BULLET] COREFUND EQUITY FUNDS
- -------------------------------------------------------
DESCRIPTION SHARES VALUE (000)
- -------------------------------------------------------
RUBBER & PLASTIC -- 0.8%
Goodyear Tire & Rubber 4,000 $ 253
O'Sullivan 45,000 377
----------
630
----------
SEMI-CONDUCTORS/INSTRUMENTS-- 3.2%
Ess Technology* 4,600 62
Intel 9,000 1,276
VLSI Technology* 45,000 1,063
----------
2,401
----------
SPECIALTY CONSTRUCTION -- 1.0%
Oakwood Homes 30,000 720
----------
STEEL & STEEL WORKS -- 1.1%
Texas Industries 32,000 850
----------
TECHNOLOGY, SERVICES -- 0.8%
Cabletron Systems* 20,000 566
----------
TELEPHONES & TELECOMMUNICATION -- 13.0%
Aerial Communications* 92,000 782
Airtouch Communications* 41,500 1,136
Amnex* 171,500 418
Clearnet, Class A* 40,000 485
Intermedia Communications
of Florida* 25,000 809
Lucent Technologies 16,500 1,189
Mcleod, Class A* 25,000 844
Metrocall* 25,000 112
Qualcomm* 15,500 789
Qwest Communications Int'l* 19,100 520
Rural Cellular* 92,000 949
Smartalk Teleservices* 65,000 1,008
Viatel* 90,000 608
----------
9,649
----------
TESTING LABORATORIES -- 0.5%
Genome Therapeutics* 45,000 388
----------
WATER TREATMENT -- 0.9%
U.S. Filter* 25,000 681
----------
TOTAL COMMON STOCKS
(Cost $67,323) 73,843
----------
- --------------------------------------------------------
DESCRIPTION PAR (000) VALUE (000)
- --------------------------------------------------------
REPURCHASE AGREEMENT -- 1.2%
Sanwa Bank
5.85%, dated 06/30/97, matures
07/01/97, repurchase price
$870,141 (collateralized by
U.S. Treasury Note, par value
$880,000, 6.625%, 06/30/01;
market value $890,560) $870 $ 870
----------
TOTAL REPURCHASE AGREEMENT
(Cost $870) 870
----------
TOTAL INVESTMENTS -- 100.5%
(Cost $68,193) 74,713
----------
OTHER ASSETS AND LIABILITIES,
NET -- (0.5%) (386)
----------
NET ASSETS:
Portfolio Shares -- Class Y ($0.001
par value -- 1 billion authorized)
based on 6,386,101 outstanding shares 62,238
Portfolio Shares -- Class A ($0.001
par value -- 1 billion authorized)
based on 208,665 outstanding shares 2,199
Accumulated Net Realized Gain
on Investments 3,428
Net Unrealized Appreciation
on Investments 6,520
Distributions in Excess of Net
Investment Income (58)
----------
TOTAL NET ASSETS -- 100.0% $74,327
==========
NET ASSET VALUE AND REDEMPTION
PRICE PER SHARE -- CLASS Y $11.27
==========
NET ASSET VALUE AND REDEMPTION
PRICE PER SHARE -- CLASS A $11.25
==========
* NON-INCOME PRODUCING SECURITY
ADR -- AMERICAN DEPOSITORY RECEIPT
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
57
<PAGE>
STATEMENT
OF
NET ASSETS
AS OF
JUNE 30, 1997
INTERNATIONAL GROWTH FUND
UNITED KINGDOM 18%
SMALLER MARKETS 9%
OTHER PACIFIC RIM 16%
CASH EQUIVALENTS 4%
EUROPE 35%
JAPAN 18%
% OF TOTAL PORTFOLIO INVESTMENTS
- --------------------------------------------------------
DESCRIPTION SHARES VALUE (000)
- --------------------------------------------------------
FOREIGN STOCKS -- 94.5%
ARGENTINA -- 0.9%
Banco Frances ADR 4,025 $ 131
Irsa GDR 1,440 63
Perez Companc 83,643 668
Telefonica Argentina ADR 18,500 641
----------
1,503
----------
AUSTRALIA -- 1.5%
AGl 80,000 471
Lend Lease 25,000 528
National Australia Bank 44,500 637
QBE Insurance 150,000 906
----------
2,542
----------
AUSTRIA -- 0.9%
VA Technologie 7,800 1,428
----------
BELGIUM -- 0.8%
Generale Banque 3,500 1,347
----------
BRAZIL -- 1.9%
Centrais Electricas GDR* 750 105
Companhia Brasileira de
Distribuicao Grupo de
Acucar ADR 4,400 100
Electrobras ADR 38,500 1,076
Telebras ADR 11,970 1,816
----------
3,097
----------
CHILE -- 0.7%
Compania de Telecom de
Chile ADR 32,000 1,056
Santa Isabel ADR 2,100 68
----------
1,124
----------
- -------------------------------------------------------
DESCRIPTION SHARES VALUE (000)
- -------------------------------------------------------
DENMARK -- 1.7%
Coloplast, Series B 3,100 $ 207
Danske Traelast 2,430 222
Novo-Nordisk, Class B 20,000 2,180
Sydbank 4,824 220
----------
2,829
----------
FINLAND -- 0.4%
Amer Group 20,000 360
Nokia AB, Series A 3,080 230
----------
590
----------
FRANCE -- 7.8%
Air Liquide 11,450 1,816
Alcatel Alsthom 2,500 313
AXA 28,595 1,777
Cie Financiere de Paribas,
Class A 3,865 267
Cie Generale des Eaux 9,248 1,184
Cie Generale des Eaux Warrants 2,000 1
Hermes International 540 50
Michelin `B' 27,900 1,674
Penauille Polyservices 1,000 226
Rhone Poulenc 44,000 1,796
Schneider 32,900 1,750
SGS-Thomson Microelectronics* 2,265 179
Societe Nationale Elf Aquitaine 15,166 1,635
Valeo 3,000 186
----------
12,854
----------
GERMANY -- 9.0%
Bayer 2,500 96
BMW 1,950 1,607
Deutsche Bank AG 34,100 2,002
Eurobike 7,000 197
Fried Krupp 665 131
Hoechst 47,402 2,008
Leica Camera 5,525 136
Mannesmann 5,700 2,545
Puma 5,500 169
SGL Carbon 10,100 1,379
Veba 40,749 2,301
Volkswagen 2,800 2,122
Wella 450 304
----------
14,997
----------
HONG KONG -- 6.7%
Amoy Properties 635,000 701
Cheung Kong Holdings 159,000 1,570
China Light & Power 140,000 793
China Overseas Land &
Investment 950,000 766
Citic Pacific 100,000 625
First Pacific 502,000 642
Giordano 650,000 445
HSBC Holdings 50,481 1,518
Hutchison Whampoa 161,000 1,392
New World Development 182,000 1,085
Swire Pacific, Series A 79,500 716
Swire Pacific, Series B 550,000 834
----------
11,087
----------
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
58
<PAGE>
[SQUARE BULLET] COREFUND EQUITY FUNDS
- --------------------------------------------------------
DESCRIPTION SHARES VALUE (000)
- --------------------------------------------------------
HUNGARY -- 0.1%
Pannoplast RT 3,200 $ 161
----------
INDIA -- 1.9%
Himilayan Fund* 75,918 1,146
Icici GDR* 60,000 840
Indian Opportunities Fund* 41,981 410
Videsh Sanchar Nigam GDR* 35,000 726
----------
3,122
----------
INDONESIA -- 2.4%
Bank Bali "F" 300,000 802
Bank International
Indonesia "F" 1,100,000 950
Indosat "F" 275,000 823
Telekomunikasi "F" 850,000 1,390
----------
3,965
----------
ISRAEL -- 0.6%
Near East Opportunity Fund* 59,000 878
Tadarin Limited* 4,032 113
----------
991
----------
ITALY -- 1.8%
Banca Popolare
Commercio e Industria 19,650 237
Bulgari 46,000 262
ENI SPA 255,967 1,447
Fila ADR 3,500 117
Finanziaria Autogrill* 188,250 315
Gucci Group ADR 2,400 155
Industrie Natuzzi Spa ADR 17,500 448
----------
2,981
----------
JAPAN -- 17.3%
77th Bank 33,000 320
Canon 79,000 2,152
DDI 145 1,071
Eiden Sakakiya 30,000 251
Hitachi 115,000 1,285
Honda Motor 25,000 753
Hoya 8,000 356
Ito Yokado 24,000 1,393
Kamigumi 95,000 535
Kao 21,000 291
Kyocera 13,000 1,033
Mabuchi Motor 8,000 464
Marui Company 39,000 725
Mitsubishi Heavy Industries 171,000 1,312
Mitsui Fudosan 66,000 910
Nippon Express 80,000 639
Nitto Denko 32,000 623
Nomura Securities 56,000 772
Riso Kagaku Corporation 5,100 419
Rohm Company 24,000 2,472
Secom 16,000 1,175
Shimachu 17,000 511
Shin-Etsu Chemical 56,000 1,486
Sony Corporation 24,000 2,093
Sumitomo Electric 75,000 1,257
Suzuki Motor 24,000 304
- -------------------------------------------------------
DESCRIPTION SHARES VALUE (000)
- -------------------------------------------------------
Taisho Pharmaceutical 25,000 $ 674
Tokio Marine & Fire Insurance 63,000 825
Toyota Motor 51,000 1,505
Yamanouchi Pharmaceutical 38,000 1,022
----------
28,628
----------
MALAYSIA -- 1.1%
AMMB Holdings 117,000 728
AMMB Holdings Rights* 100,000 36
AMMB Holdings Warrants* 10,000 13
Edaran Otomobil 63,000 537
Malaysian Oxygen 100,000 507
----------
1,821
----------
MEXICO -- 1.9%
Cifra SA, Series B 550,000 1,011
Corporacion Industrial Alfa 61,945 423
Empresas ICA Sociedad 18,300 294
Grupo Corvi UBL* 120,000 70
Grupo Financiero Banamex 355,000 930
Grupo Modelo, Series C 9,000 62
Grupo Radio Centro ADR 3,300 39
Grupo Televisa GDR 4,000 122
Industrias CH, Series B* 30,000 123
----------
3,074
----------
NETHERLANDS -- 3.0%
Gucci Group NV 1,400 90
ING Groep 51,305 2,364
Phillips Electronics NV 30,000 2,148
Vendex International 4,000 219
Wolters Kluwer 800 97
----------
4,918
----------
NORWAY -- 0.2%
Tomra Systems 13,500 276
----------
PERU -- 0.0%
Credicorp 4,230 93
----------
PHILIPPINES -- 1.5%
Ayala Land, Series B 800,000 736
Belle* 4,000,000 1,169
Philippine Long Distance
Telephone ADR 10,000 643
----------
2,548
----------
SINGAPORE -- 0.5%
Development Bank of Singapore 74,000 932
----------
SOUTH KOREA -- 0.4%
Korea Electric Power ADR 35,000 654
Samsung Electronics 2,463 67
----------
721
----------
SPAIN -- 2.5%
Banco de Santander 71,400 2,200
Corp Financiera Reunida 75,000 316
Telefonica de Espana 55,000 1,590
----------
4,106
----------
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
59
<PAGE>
STATEMENT
OF
NET ASSETS
AS OF
JUNE 30, 1997
INTERNATIONAL GROWTH FUND (CONCLUDED)
- --------------------------------------------------------
DESCRIPTION SHARES VALUE (000)
- --------------------------------------------------------
SWEDEN -- 1.6%
ABB AB, Class A 134,200 $ 1,882
Ericsson Telephone ADR 8,360 329
SSAB A 20,000 408
----------
2,619
----------
SWITZERLAND -- 5.3%
Ciba Speciality Chemicals* 557 51
Credit Suisse Group 18,000 2,311
Disetronic 130 263
Novartis AG 2,217 3,542
Oerlikon-Buehrle 790 92
Roche 276 2,495
----------
8,754
----------
TAIWAN -- 0.3%
Standard Foods Taiwan GDR* 50,000 479
----------
THAILAND -- 0.6%
Ruam Pattan Fund II 1,281,000 386
Siam Cement "F" 16,000 277
Siam Commercial Bank 100,000 410
----------
1,073
----------
UNITED KINGDOM -- 18.3%
3i Group 35,130 292
Barclays Bank 14,425 286
Brit-Borneo Petroleum
Syndicate 14,250 336
British Aerospace 14,475 322
British Petroleum 24,320 302
British Sky Broadcasting 30,420 223
British Telecommunications 157,000 1,166
Cable & Wireless 85,000 782
General Electric 158,000 944
GKN 74,500 1,283
Glaxo Wellcome 67,000 1,383
Granada Group 74,750 983
JJB Sports 34,200 280
Ladbroke 374,430 1,465
Lasmo 240,318 1,038
Logica 21,300 246
Manchester United 28,850 292
Marks & Spencer 164,000 1,360
McKechnie 76,500 538
National Power 33,420 290
National Westminster Bank 60,000 807
Next 24,500 277
NFC 333,000 723
Norwich Union PLC 27,200 145
Prudential 28,100 272
Railtrack Group 28,090 292
Reckitt & Coleman 102,500 1,528
Rentokil Group 79,000 276
Royal Bank of Scotland 149,000 1,388
Safeway 158,144 915
Scottish Power 187,000 1,217
Shell Transportation
& Trading 235,500 1,605
SmithKline Beecham Units 15,100 278
SmithKline Beecham, Series A 2,190 40
- -------------------------------------------------------
DESCRIPTION SHARES/PAR (000) VALUE (000)
- -------------------------------------------------------
Smiths Industries 86,782 $ 1,112
Standard Chartered Bank 17,840 272
Tesco 47,900 295
TSB Lloyds Group 170,500 1,748
Unilever 57,200 1,639
Wassall 119,625 615
Wolseley 98,000 764
Zeneca Group 9,600 317
----------
30,336
----------
VENEZUELA -- 0.9%
Cia Anonima Telecom ADR* 33,000 1,423
----------
TOTAL FOREIGN STOCKS
(Cost $128,125) 156,419
----------
FOREIGN PREFERRED STOCKS -- 1.2%
AUSTRALIA -- 0.5%
Newscorp 220 867
----------
BRAZIL -- 0.6%
Petroleo Brasileira ADR 35,000 1,015
----------
GERMANY -- 0.1%
Fresnius 888 202
----------
TOTAL FOREIGN PREFERRED STOCKS
(Cost $1,908) 2,084
----------
CONVERTIBLE BONDS -- 0.9%
JAPAN -- 0.9%
Mitsubishi Bank
3.000%, 11/30/02 $ 900 984
Namco
4.700%, 09/30/98 35,000 434
----------
1,418
----------
MALAYSIA -- 0.0%
AMMB
5.000%, 05/13/02 100 34
----------
TOTAL CONVERTIBLE BONDS
(Cost $1,406) 1,452
----------
DEMAND DEPOSIT -- 3.9%
Morgan Stanley
4.350%, 07/01/97 6,500 6,500
----------
TOTAL DEMAND DEPOSIT
(Cost $6,500) 6,500
----------
TOTAL INVESTMENTS -- 100.5%
(Cost $137,939) 166,455
----------
OTHER ASSETS AND LIABILITIES,
NET -- (0.5%) (907)
----------
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
60
<PAGE>
[SQUARE BULLET] COREFUND EQUITY FUNDS
- -------------------------------------------------------
DESCRIPTION VALUE (000)
- -------------------------------------------------------
NET ASSETS:
Portfolio Shares -- Class Y ($.001 par
value -- 25 million authorized)
based on 11,084,932 outstanding shares $130,725
Portfolio Shares -- Class A ($.001 par
value -- 25 million authorized) based
on 165,406 outstanding shares 2,133
Accumulated net realized gain
on investments 3,773
Net unrealized depreciation on
forward foreign currency contracts,
foreign currency and translation of
other assets and liabilities in
foreign currency (3)
Net unrealized appreciation
on investments 28,516
Accumulated net investment income 404
----------
TOTAL NET ASSETS -- 100.0% $165,548
==========
NET ASSET VALUE, OFFERING AND REDEMPTION
PRICE PER SHARE -- CLASS Y $14.72
==========
NET ASSET VALUE AND REDEMPTION PRICE
PER SHARE -- CLASS A $14.70
==========
* NON-INCOME PRODUCING SECURITY
ADR -- AMERICAN DEPOSITORY RECEIPTS
"F" -- FOREIGN SHARES
GDR -- GLOBAL DEPOSITORY RECEIPTS
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
BALANCED FUND
U.S. TREASURY OBLIGATIONS 18%
U.S. GOVERNMENT BACKED BONDS 5%
U.S. AGENCY BACKED BONDS 5%
CORPORATE BONDS 7%
CASH EQUIVALENTS 6%
COMMON STOCK 59%
% OF TOTAL PORTFOLIO INVESTMENTS
- --------------------------------------------------------
DESCRIPTION SHARES VALUE (000)
- --------------------------------------------------------
COMMON STOCKS -- 59.2%
AIRCRAFT -- 0.8%
Boeing 18,400 $ 976
----------
BANKS -- 1.9%
Citicorp 10,000 1,206
J.P. Morgan 10,000 1,044
----------
2,250
----------
BEAUTY PRODUCTS -- 1.8%
Colgate Palmolive 21,800 1,422
Procter & Gamble 5,000 706
----------
2,128
----------
BROADCASTING, NEWSPAPERS & ADVERTISING -- 1.0%
Comcast, Class A 50,000 1,069
TCI Satellite Entertainment* 4,300 34
----------
1,103
----------
CHEMICALS -- 0.8%
Monsanto 21,750 937
----------
COMMUNICATIONS EQUIPMENT -- 3.2%
Cisco Systems* 19,600 1,316
Motorola 17,000 1,292
Qualcomm* 23,500 1,196
----------
3,804
----------
COMPUTERS, SOFTWARE & SERVICES-- 5.9%
Compaq Computer* 13,000 1,290
Computer Associates
International 24,000 1,337
Microsoft* 11,000 1,390
Oracle Systems* 29,000 1,461
Peoplesoft* 28,000 1,477
----------
6,955
----------
* NON-INCOME PRODUCING SECURITY
ADR -- AMERICAN DEPOSITORY RECEIPTS
"F" -- FOREIGN SHARES
GDR -- GLOBAL DEPOSITORY RECEIPTS
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
61
<PAGE>
STATEMENT
OF
NET ASSETS
AS OF
JUNE 30, 1997
BALANCED FUND (CONTINUED)
- --------------------------------------------------------
DESCRIPTION SHARES VALUE (000)
- --------------------------------------------------------
DRUGS -- 7.2%
Amgen* 20,000 $ 1,162
Bristol-Myers Squibb 12,000 972
Genzyme* 30,000 833
Glaxo ADR 29,400 1,229
Merck 7,000 725
Schering Plough 20,000 958
SmithKline Beecham ADR 11,800 1,081
Warner Lambert 12,000 1,491
----------
8,451
----------
ELECTRICAL EQUIPMENT -- 2.9%
Emerson Electric 17,300 953
General Electric 20,200 1,321
Westinghouse Electric 47,000 1,087
----------
3,361
----------
ENTERTAINMENT -- 0.6%
Walt Disney 8,500 682
----------
FINANCIAL SERVICES -- 2.2%
FHLMC 41,000 1,409
FNMA 28,000 1,222
----------
2,631
----------
FOOD, BEVERAGE & TOBACCO -- 1.8%
Coca Cola 13,400 935
Philip Morris 13,500 599
Sara Lee 15,000 624
----------
2,158
----------
HEALTHCARE SERVICES -- 3.3%
HBO 19,500 1,343
Health Management Associates* 52,299 1,491
Oxford Health Plan* 15,000 1,076
----------
3,910
----------
HOUSEHOLD PRODUCTS -- 1.7%
Gillette 13,800 1,308
Sunbeam Oster 19,000 717
----------
2,025
----------
INSURANCE -- 1.8%
American International Group 8,000 1,195
General Re 5,000 910
----------
2,105
----------
MACHINERY -- 1.7%
Caterpillar 9,500 1,020
Deere 17,500 960
----------
1,980
----------
MEASURING DEVICES -- 1.1%
Honeywell 17,000 1,290
----------
MEDICAL PRODUCTS & SERVICES-- 3.3%
Acuson* 35,000 805
Boston Scientific* 15,000 922
Cardinal Health 22,850 1,308
Johnson & Johnson 13,200 850
----------
3,885
----------
- -------------------------------------------------------
DESCRIPTION SHARES/PAR (000) VALUE (000)
- -------------------------------------------------------
METALS & MINING -- 0.8%
Aluminum Company of America 12,700 $ 957
----------
PETROLEUM REFINING -- 6.4%
Amoco 12,400 1,078
Atlantic Richfield 12,000 846
Chevron 17,100 1,264
Exxon 19,500 1,199
Mobil 16,200 1,132
Schlumberger 7,700 963
Texaco 10,000 1,088
----------
7,570
----------
RETAIL -- 3.9%
Costco* 30,000 986
Dayton-Hudson 27,000 1,436
Gap 30,000 1,166
Home Depot 15,000 1,034
----------
4,622
----------
SEMI-CONDUCTORS/INSTRUMENTS -- 0.9%
Intel 7,500 1,064
----------
TECHNOLOGY, SERVICES -- 0.7%
Paychex 21,000 798
----------
TELEPHONES & TELECOMMUNICATION-- 3.5%
Alltel 30,000 1,003
LCI International* 48,000 1,050
McLeod, Class A* 24,000 810
Worldcom* 39,900 1,277
----------
4,140
----------
TOTAL COMMON STOCKS
(Cost $50,338) 69,782
----------
U.S. TREASURY OBLIGATIONS -- 18.2%
U.S. Treasury Bonds
6.000%, 08/15/99 $1,500 1,496
7.250%, 05/15/16 500 521
8.750%, 05/15/17 665 800
U.S. Treasury Notes
8.500%, 07/15/97 1,215 1,216
8.125%, 02/15/98 1,670 1,694
6.125%, 05/15/98 1,000 1,003
9.250%, 08/15/98 1,620 1,677
8.875%, 11/15/98 1,105 1,146
8.875%, 02/15/99 110 115
6.000%, 06/30/99 2,000 1,999
6.000%, 10/15/99 500 499
5.875%, 11/15/99 2,000 1,987
7.750%, 11/30/99 700 724
6.375%, 01/15/00 500 502
7.500%, 11/15/01 3,235 3,370
6.625%, 03/31/02 1,000 1,008
7.500%, 02/15/05 600 634
6.500%, 08/15/05 500 498
6.875%, 05/15/06 500 510
----------
TOTAL U.S. TREASURY OBLIGATIONS
(Cost $21,553) 21,399
----------
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
62
<PAGE>
[SQUARE BULLET] COREFUND EQUITY FUNDS
- -------------------------------------------------------
DESCRIPTION PAR (000) VALUE (000)
- -------------------------------------------------------
U.S. GOVERNMENT AGENCY OBLIGATIONS -- 5.6%
FHLB
8.120%, 09/26/06 $1,800 $ 1,801
8.000%, 10/17/11 1,250 1,260
FHLMC
6.440%, 01/28/00 500 501
8.150%, 09/12/06 500 500
8.025%, 09/15/06 1,000 1,025
8.055%, 09/30/11 1,000 1,015
FNMA
5.940%, 12/12/05 500 474
----------
TOTAL U.S. GOVERNMENT AGENCY OBLIGATIONS
(Cost $6,548) 6,576
----------
U.S. GOVERNMENT MORTGAGE-BACKED BONDS -- 5.3%
FHLMC
6.000%, 05/01/08 670 646
5.500%, 11/01/08 569 536
FNMA
6.500%, 08/01/10 236 231
6.500%, 09/01/10 307 301
6.500%, 11/01/24 467 447
GNMA
7.500%, 10/15/11 2,365 2,407
9.000%, 10/15/19 161 170
7.500%, 03/15/26 1,479 1,483
----------
TOTAL U.S. GOVERNMENT MORTGAGE-
BACKED BONDS
(Cost $6,245) 6,221
----------
CORPORATE OBLIGATIONS -- 6.8%
BANKING -- 1.5%
First Bank System
6.875%, 09/15/07 500 489
MBNA
7.250%, 09/15/02 185 186
Midland Bank
6.950%, 03/15/11 200 193
Nationsbank
6.500%, 03/15/06 200 192
Provident Bank
6.125%, 12/15/00 25 25
Royal Bank of Scotland
6.375%, 02/01/11 205 188
Santander
7.250%, 11/01/15 100 96
U.S. Bancorp
6.750%, 10/15/05 500 488
----------
1,857
----------
- -------------------------------------------------------
DESCRIPTION PAR (000) VALUE (000)
- -------------------------------------------------------
FINANCIAL SERVICES -- 2.7%
Chrysler Financial
6.950%, 03/25/02 $ 500 $ 501
CSR Finance
7.700%, 07/21/25 200 202
Donaldson Lufkin & Jenrette
6.875%, 11/01/05 185 180
Ford Motor Credit
6.375%, 04/15/00 500 498
6.250%, 11/08/00 500 494
7.500%, 01/15/03 1,000 1,028
Merrill Lynch
7.000%, 04/27/08 250 248
----------
3,151
----------
INDUSTRIAL -- 2.6%
Arco Chemical
10.250%, 11/01/10 210 266
Bellsouth
7.000%, 02/01/05 500 504
Coca Cola
6.000%, 07/15/03 1,000 960
Dayton Hudson
8.500%, 12/01/22 500 510
ITT
7.375%, 11/15/15 360 335
Laidlaw
8.750%, 04/15/25 75 83
MacMillan Bloedel
7.700%, 02/15/26 215 202
Noranda
8.125%, 06/15/04 195 205
----------
3,065
----------
TOTAL CORPORATE OBLIGATIONS
(Cost $8,166) 8,073
----------
REPURCHASE AGREEMENTS -- 5.9%
Aubrey Lanston
5.90%, dated 06/30/97, matures
07/01/97, repurchase price
$1,728,283 (collateralized by U.S.
Treasury Note, par value $1,360,000,
11.875%, 11/15/03;
market value $1,764,736) 1,728 1,728
Hong Kong Shanghai Bank
5.80%, dated 06/30/97, matures
07/01/97, repurchase price $1,728,278
(collateralized by U.S. Treasury Note,
par value $1,680,000,
7.25%, 05/15/04;
market value $1,773,576) 1,728 1,728
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
63
<PAGE>
STATEMENT
OF
NET ASSETS
AS OF
JUNE 30, 1997
BALANCED FUND (CONCLUDED)
- -------------------------------------------------------
DESCRIPTION PAR (000) VALUE (000)
- -------------------------------------------------------
Sanwa Bank
5.85%, dated 06/30/97, matures
07/01/97, repurchase price
$1,728,281 (collateralized by U.S.
Treasury Note, par value $1,745,000,
6.625%, 06/30/01;
market value $1,765,940) $1,728 $ 1,728
Swiss Bank
5.875%, dated 06/30/97, matures
07/01/97, repurchase price
$1,728,282 (collateralized by
U.S. Treasury Note, par value
$1,795,000, 5.625%, 11/30/00;
market value $1,770,409) 1,728 1,728
----------
TOTAL REPURCHASE AGREEMENTS
(Cost $6,912) 6,912
----------
TOTAL INVESTMENTS -- 101.0%
(Cost $99,764) 118,963
----------
OTHER ASSETS AND LIABILITIES,
NET -- (1.0%) (1,123)
----------
- -------------------------------------------------------
DESCRIPTION VALUE (000)
- -------------------------------------------------------
NET ASSETS:
Portfolio Shares -- Class Y ($0.001
par value -- 100 million authorized)
based on 8,407,085 outstanding shares $ 90,012
Portfolio Shares -- Class A ($0.001
par value -- 100 million authorized)
based on 310,422 outstanding shares 3,413
Accumulated Net Realized Gain
on Investments 5,216
Net Unrealized Appreciation
on Investments 19,199
----------
TOTAL NET ASSETS -- 100.0% $117,840
==========
NET ASSET VALUE AND REDEMPTION
PRICE PER SHARE -- CLASS Y $13.52
==========
NET ASSET VALUE AND REDEMPTION
PRICE PER SHARE -- CLASS A $13.52
==========
*NON-INCOME PRODUCING SECURITY
ADR -- AMERICAN DEPOSITORY RECEIPT
FHLB -- FEDERAL HOME LOAN BANK
FHLMC -- FEDERAL HOME LOAN MORTGAGE CORPORATION
FNMA -- FEDERAL NATIONAL MORTGAGE ASSOCIATION
GNMA -- GOVERNMENT NATIONAL MORTGAGE ASSOCIATION
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
64
<PAGE>
[SQUARE BULLET] COREFUND EQUITY FUNDS
SHORT TERM INCOME FUND
[PIE CHART]
U.S. TREASURY OBLIGATIONS 42%
CASH EQUIVALENTS 10%
CORPORATE BONDS 48%
% OF TOTAL PORTFOLIO INVESTMENTS
- --------------------------------------------------------
DESCRIPTION PAR (000) VALUE (000)
- --------------------------------------------------------
U.S. TREASURY OBLIGATIONS -- 39.6%
U.S. Treasury Notes
5.750%, 10/31/97 $ 500 $ 500
7.375%, 11/15/97 1,000 1,006
6.000%, 12/31/97 575 576
5.625%, 01/31/98 750 750
6.125%, 03/31/98 500 502
5.875%, 04/30/98 2,000 2,002
6.125%, 05/15/98 1,000 1,003
6.000%, 05/31/98 1,000 1,002
6.125%, 08/31/98 1,000 1,003
6.000%, 09/30/98 2,500 2,503
5.875%, 10/31/98 1,000 999
5.750%, 12/31/98 1,000 997
6.375%, 01/15/99 1,000 1,006
5.875%, 01/31/99 1,000 998
----------
TOTAL U.S. TREASURY OBLIGATIONS
(Cost $14,842) 14,847
----------
CORPORATE BONDS -- 35.7%
BANKING -- 4.0%
American Express Centurion Bank
5.738%, 08/21/98 1,000 1,001
Citicorp
6.013%, 11/23/99 500 502
----------
1,503
----------
FINANCIAL SERVICES -- 21.2%
American General Finance
7.000%, 10/01/97 985 988
Associates of North America
6.250%, 03/15/99 525 524
Chrysler Financial
6.375%, 01/28/00 510 507
Credit Suisse
5.628%, 03/13/98 1,000 1,000
- --------------------------------------------------------
DESCRIPTION PAR (000) VALUE (000)
- --------------------------------------------------------
Fleet Mortgage Group
6.500%, 09/15/99 $ 500 $ 501
Lehman Brothers Holdings
6.375%, 06/01/98 500 501
Mellon Financial
7.625%, 11/15/99 255 263
Morgan Stanley Group
5.853%, 02/26/99 1,250 1,250
5.625%, 03/01/99 1,000 991
Salomon
6.500%, 03/01/00 750 745
Sears Roebuck Acceptance
6.380%, 02/16/99 650 652
----------
7,922
----------
INDUSTRIAL -- 10.5%
AT&T Capital
5.970%, 02/27/98 1,000 1,000
Shell Oil
6.950%, 12/15/98 1,000 1,010
Time Warner
7.450%, 02/01/98 735 740
USX
6.650%, 10/09/97 1,200 1,202
----------
3,952
----------
TOTAL CORPORATE BONDS
(Cost $13,375) 13,377
----------
COMMERCIAL PAPER -- 1.3%
BANKING -- 1.3%
Abn Amro North American Finance
5.392%, 07/28/97 500 498
----------
TOTAL COMMERCIAL PAPER
(Cost $498) 498
----------
TIME DEPOSITS -- 10.0%
BANKING -- 4.7%
First Union Bank
6.000%, 07/01/97 1,752 1,752
----------
FINANCIAL SERVICES -- 5.3%
Allstate
5.745%, 07/01/97 2,000 2,000
----------
TOTAL TIME DEPOSITS
(Cost $3,752) 3,752
----------
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
65
<PAGE>
STATEMENT
OF
NET ASSETS
AS OF
JUNE 30, 1997
SHORT TERM INCOME FUND (CONCLUDED)
- --------------------------------------------------------
DESCRIPTION PAR (000) VALUE (000)
- --------------------------------------------------------
ASSET-BACKED SECURITIES -- 12.4%
Cit Rv Owner Trust,
Series 1995-B, Class A
6.500%, 04/15/11 $258 $ 260
Eqcc Home Equity Loan Trust,
Series 1996-2, Class A2
6.700%, 09/15/08 250 251
Eqcc Home Equity Loan Trust,
Series 1997-1, Class A3
6.840%, 09/15/11 750 753
Independent National Mortgage,
Series 96-A, Class A1
6.710%, 09/25/26 638 642
Money Store Home Equity Loan
Trust, Series 93-B
5.400%, 08/15/05 333 329
Navistar Financial Owner Trust,
Series 1997-A, Class A2
6.350%, 01/15/00 500 502
Student Loan Marketing Association,
Series 1997-1, Class A1 (A)
5.530%, 10/25/05 750 749
Union Acceptance,
Series 1997-A, Class A
6.130%, 07/10/01 404 405
Union Acceptance, Series 96-A
5.400%, 04/07/03 572 567
WFS Financial Owner Trust,
Series 1996-B, Class A2 CMO
6.200%, 05/20/99 203 203
----------
TOTAL ASSET-BACKED SECURITIES
(Cost $4,655) 4,661
----------
TOTAL INVESTMENTS -- 99.0%
(Cost $37,122) 37,135
----------
OTHER ASSETS AND LIABILITIES,
NET -- 1.0% 369
----------
- --------------------------------------------------------
DESCRIPTION VALUE (000)
- --------------------------------------------------------
NET ASSETS:
Portfolio Shares -- Class Y ($0.001
par value -- 1 billion authorized)
based on 3,713,316 outstanding shares $37,088
Portfolio Shares -- Class A ($0.001
par value -- 1 billion authorized)
based on 49,473 outstanding shares 492
Accumulated Net Realized Loss
on Investments (89)
Net Unrealized Appreciation
on Investments 13
----------
TOTAL NET ASSETS -- 100.0% $37,504
==========
NET ASSET VALUE AND REDEMPTION PRICE
PER SHARE -- CLASS Y $9.97
==========
NET ASSET VALUE AND REDEMPTION PRICE
PER SHARE -- CLASS A $9.96
==========
CMO -- COLLATERALIZED MORTGAGE OBLIGATIONS
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
66
<PAGE>
[SQUARE BULLET] COREFUND EQUITY FUNDS
SHORT-INTERMEDIATE BOND FUND
[PIE CHART]
U.S. TREASURY OBLIGATIONS 52%
CASH EQUIVALENTS 4%
CORPORATE BONDS 42%
U.S. AGENCY BACKED BONDS 2%
% OF TOTAL PORTFOLIO INVESTMENTS
- -------------------------------------------------------
DESCRIPTION PAR (000) VALUE (000)
- -------------------------------------------------------
U.S. TREASURY OBLIGATIONS -- 52.7%
U.S. Treasury Notes
6.000%, 08/31/97 $ 1,500 $ 1,501
7.375%, 11/15/97 4,000 4,025
5.125%, 02/28/98 1,500 1,494
6.000%, 05/31/98 12,145 12,169
7.125%, 10/15/98 4,105 4,165
5.625%, 11/30/98 1,630 1,623
8.875%, 02/15/99 1,755 1,830
6.500%, 04/30/99 9,035 9,100
6.000%, 10/15/99 2,200 2,196
7.750%, 12/31/99 2,500 2,588
7.750%, 01/31/00 8 8
7.125%, 02/29/00 6,735 6,880
8.000%, 05/15/01 6,635 7,004
6.625%, 07/31/01 17,355 17,512
6.500%, 08/31/01 3,850 3,867
6.625%, 04/30/02 5,775 5,826
6.250%, 02/15/07 1,675 1,638
6.625%, 05/15/07 4,000 4,030
----------
TOTAL U.S. TREASURY OBLIGATIONS
(Cost $87,474) 87,456
----------
U.S. AGENCY MORTGAGE-BACKED BONDS -- 2.6%
FHLMC
6.750%, 03/15/07 1,755 1,760
FNMA
6.500%, 08/01/10 1,482 1,453
6.500%, 10/01/10 1,120 1,098
----------
TOTAL U.S. AGENCY MORTGAGE-BACKED BONDS
(Cost $4,322) 4,311
----------
CORPORATE OBLIGATIONS -- 23.2%
BANKING -- 4.5%
Bank One
7.600%, 05/01/07 1,815 1,865
- -------------------------------------------------------
DESCRIPTION PAR (000) VALUE (000)
- -------------------------------------------------------
BCH Cayman Islands Limited
7.700%, 07/15/06 $1,630 $ 1,671
Security Pacific
11.500%, 11/15/00 1,955 2,234
Societe Generale
7.400%, 06/01/06 1,755 1,768
----------
7,538
----------
FINANCIAL SERVICES -- 6.7%
Associates Corporation of
North America
6.375%, 08/15/98 1,500 1,504
Dean Witter Discover
6.300%, 01/15/06 1,540 1,463
Ford Motor Credit
6.800%, 08/15/97 1,000 1,002
Lehman Brothers
7.250%, 04/15/03 2,630 2,640
Paine Webber Group
6.500%, 11/01/05 1,745 1,653
Salomon
7.200%, 02/01/04 2,810 2,810
----------
11,072
----------
INDUSTRIALS -- 9.2%
Barrick Gold
7.500%, 05/01/07 1,780 1,816
CSR America
6.875%, 07/21/05 1,670 1,645
Loews
6.750%, 12/15/06 1,705 1,652
Nabisco
6.850%, 06/15/05 1,425 1,388
Noranda
8.125%, 06/15/04 1,770 1,858
Tele-Communications
8.650%, 09/15/04 985 1,027
Time Warner
7.750%, 06/15/05 1,770 1,805
United Air Lines
6.750%, 12/01/97 2,435 2,443
USX
9.625%, 08/15/03 1,490 1,672
----------
15,306
----------
UTILITIES -- 2.8%
Coastal
8.125%, 09/15/02 1,370 1,437
Tosco
7.625%, 05/15/06 1,790 1,832
Penn Power and Light
7.750%, 05/01/02 1,280 1,328
----------
4,597
----------
TOTAL CORPORATE OBLIGATIONS
(Cost $38,388) 38,513
----------
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
67
<PAGE>
STATEMENT
OF
NET ASSETS
AS OF
JUNE 30, 1997
SHORT-INTERMEDIATE BOND FUND (CONCLUDED)
- --------------------------------------------------------
DESCRIPTION PAR (000) VALUE (000)
- --------------------------------------------------------
ASSET-BACKED SECURITIES -- 19.6%
Aames Mortgage Trust,
Series 96-B, Class A1B
7.275%, 05/15/20 $2,100 $ 2,123
Banc One Auto Guarantor Trust,
Series 1997-A, Class A
6.270%, 11/20/03 1,867 1,867
Citicorp Mortgage Securities,
Series 97-1, Class A2
7.250%, 02/25/27 1,775 1,772
Countrywide Mortgage Broker
Services, Series 97-A1, Class A1
7.000%, 03/25/27 1,869 1,866
Eqcc, Series 1996-4, Class A5
6.710%, 07/15/11 1,875 1,868
Equivantage Home Loan Trust,
Series 96-1, Class A1
6.550%, 10/25/25 830 818
General Electric Capital Mortgage
Services, Series 97-3, Class A4
7.500%, 04/25/27 1,800 1,815
Independent National Mortgage,
Series 96-A, Class A1
6.710%, 09/25/26 2,700 2,714
Metlife Captial Equipment Loan
Trust, Series 97-A, Class A
6.850%, 05/20/08 1,600 1,606
Money Store Home Equity Trust,
Series 96-B, Class A7
7.550%, 06/15/20 3,000 3,065
Residential Asset Securization Trust,
Series 97-A3, Class A10
7.250%, 05/25/27 1,770 1,768
Saxon Asset Securities Trust,
Series 96-2, Class A2
6.475%, 11/25/20 1,993 1,979
Sears Credit Account Master Trust,
Series 95-3, Class A
7.000%, 10/15/04 3,000 3,045
Standard Credit Card Master Trust,
Series 95-6, Class A
6.750%, 06/07/00 2,000 2,016
Union Acceptance,
Series 96-A, Class A
5.400%, 04/07/03 1,544 1,531
WFS Financial Owner Trust,
Series 1996-D, Class A3
6.050%, 07/20/01 2,650 2,636
----------
TOTAL ASSET-BACKED SECURITIES
(Cost $32,288) 32,489
----------
- -------------------------------------------------------
DESCRIPTION PAR (000) VALUE (000)
- -------------------------------------------------------
REPURCHASE AGREEMENT -- 4.3%
Sanwa Bank
5.85%, dated 06/30/97, matures
07/01/97, repurchase price
$7,121,157 (collateralized by
U.S. Treasury Note, par value
$7,200,000, 6.625%, 06/30/01;
market value $7,286,400) $7,120 $ 7,120
----------
TOTAL REPURCHASE AGREEMENT
(Cost $7,120) 7,120
----------
TOTAL INVESTMENTS -- 102.4%
(Cost $169,592) 169,889
----------
OTHER ASSETS AND LIABILITIES,
NET -- (2.4%) (3,984)
----------
NET ASSETS:
Portfolio Shares -- Class Y ($0.001
par value -- 100 million authorized)
based on 16,602,388 outstanding shares 165,179
Portfolio Shares -- Class A ($0.001
par value -- 100 million authorized)
based on 280,076 outstanding shares 3,380
Accumulated Net Realized Loss
on Investments (2,951)
Net Unrealized Appreciation
on Investments 297
----------
TOTAL NET ASSETS -- 100.0% $165,905
==========
NET ASSET VALUE AND REDEMPTION
PRICE PER SHARE -- CLASS Y $9.83
==========
NET ASSET VALUE AND REDEMPTION
PRICE PER SHARE -- CLASS A $9.83
==========
FHLMC -- FEDERAL HOME LOAN MORTGAGE CORPORATION
FNMA -- FEDERAL NATIONAL MORTGAGE ASSOCIATION
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
68
<PAGE>
[SQUARE BULLET] COREFUND EQUITY FUNDS
[PIE CHART]
GOVERNMENT INCOME FUND
U.S. TREASURY OBLIGATIONS 23%
CASH EQUIVALENTS 2%
U.S. AGENCY BACKED BONDS 12%
U.S. GOVERNMENT BACKED BONDS 63%
% OF TOTAL PORTFOLIO INVESTMENTS
- -------------------------------------------------------
DESCRIPTION PAR (000) VALUE (000)
- -------------------------------------------------------
U.S. TREASURY OBLIGATIONS -- 23.1%
U.S. Treasury Bond
6.625%, 02/15/27 $1,250 $ 1,223
U.S. Treasury Notes
6.375%, 05/15/99 970 975
8.000%, 05/15/01 1,200 1,267
6.500%, 08/31/01 1,000 1,004
6.625%, 04/30/02 300 303
----------
TOTAL U.S. TREASURY OBLIGATIONS
(Cost $4,760) 4,772
----------
U.S. GOVERNMENT MORTGAGE-BACKED BONDS -- 62.9%
GNMA
8.000%, 09/15/09 668 690
8.000%, 02/15/22 336 344
8.000%, 09/15/22 59 60
8.000%, 10/15/22 257 262
8.000%, 11/15/22 468 479
7.000%, 04/15/23 348 341
7.500%, 08/15/23 1,109 1,112
6.500%, 11/15/23 442 423
7.000%, 01/15/24 805 791
8.000%, 05/15/25 839 858
6.500%, 12/15/25 992 949
7.500%, 02/15/26 469 471
6.500%, 04/15/26 487 465
8.000%, 05/15/26 961 983
8.000%, 06/15/26 694 709
8.000%, 08/15/26 1,987 2,032
8.000%, 09/15/26 1,992 2,038
----------
TOTAL U.S. GOVERNMENT MORTGAGE-BACKED BONDS
(Cost $12,946) 13,007
----------
- --------------------------------------------------------
DESCRIPTION PAR (000) VALUE (000)
- --------------------------------------------------------
U.S. AGENCY MORTGAGE-BACKED BONDS -- 11.6%
FHLMC
6.000%, 05/01/08 $330 $ 318
FNMA
7.000%, 10/01/22 696 682
7.000%, 11/01/26 401 393
7.500%, 05/01/27 996 999
----------
TOTAL U.S. AGENCY MORTGAGE-BACKED BONDS
(Cost $2,415) 2,392
----------
REPURCHASE AGREEMENT -- 1.8%
Sanwa Bank
5.85% dated 06/30/97, matures
07/01/97, repurchase price
$375,061 (collateralized by
U.S. Treasury Note, par value
$380,000, 6.625%, 06/30/01;
market value $384,560) 375 375
----------
TOTAL REPURCHASE AGREEMENT
(Cost $375) 375
----------
TOTAL INVESTMENTS -- 99.4%
(Cost $20,496) 20,546
----------
OTHER ASSETS AND LIABILITIES,
NET -- 0.6% 121
----------
NET ASSETS:
Portfolio Shares -- Class Y ($0.001
par value -- 100 million authorized)
based on 1,948,080 outstanding shares 19,281
Portfolio Shares -- Class A ($0.001
par value -- 100 million authorized)
based on 170,059 outstanding shares 1,722
Accumulated Net Realized Loss
on Investments (385)
Net Unrealized Appreciation
on Investments 50
Distribution in Excess of Net
Investment Income (1)
----------
TOTAL NET ASSETS -- 100.0% $20,667
==========
NET ASSET VALUE AND REDEMPTION
PRICE PER SHARE -- CLASS Y $9.76
==========
NET ASSET VALUE AND REDEMPTION
PRICE PER SHARE -- CLASS A $9.76
==========
FHLMC -- FEDERAL HOME LOAN MORTGAGE CORPORATION
FNMA -- FEDERAL NATIONAL MORTGAGE CORPORATION
GNMA -- GOVERNMENT NATIONAL MORTGAGE CORPORATION
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
69
<PAGE>
STATEMENT
OF
NET ASSETS
AS OF
JUNE 30, 1997
BOND FUND
[PIE CHART]
U.S. TREASURY OBLIGATIONS 35%
U.S. GOVERNMENT BACKED BONDS 8%
CASH EQUIVALENTS 2%
CORPORATE BONDS 33%
U.S. AGENCY BACKED BONDS 22%
% OF TOTAL PORTFOLIO INVESTMENTS
- -------------------------------------------------------
DESCRIPTION PAR (000) VALUE (000)
- -------------------------------------------------------
U.S. TREASURY OBLIGATIONS -- 34.5%
U.S. Treasury Bonds
6.500%, 11/15/26 $2,160 $ 2,069
6.625%, 02/15/27 4,890 4,784
U.S. Treasury Notes
5.625%, 11/30/98 4,075 4,056
8.875%, 02/15/99 12,755 13,302
6.500%, 04/30/99 6,610 6,658
7.750%, 01/31/00 503 521
6.750%, 04/30/00 4,305 4,359
8.000%, 05/15/01 2,795 2,951
6.625%, 07/31/01 4,740 4,783
7.500%, 11/15/01 6,590 6,865
6.250%, 02/28/02 1,335 1,327
7.250%, 05/15/04 3,735 3,894
6.250%, 02/15/07 1,888 1,847
6.625%, 05/15/07 6,025 6,070
----------
TOTAL U.S. TREASURY OBLIGATIONS
(Cost $63,250) 63,486
----------
U.S. GOVERNMENT MORTGAGE-BACKED BONDS -- 30.0%
FHLMC
6.750%, 03/15/07 2,355 2,361
7.500%, 10/01/10 2,600 2,640
8.000%, 07/01/25 3,413 3,493
FNMA
6.500%, 08/01/10 3,096 3,035
6.500%, 09/01/10 3,489 3,421
7.500%, 06/01/11 2,493 2,529
6.500%, 03/25/19 1,690 1,656
8.500%, 02/01/25 3,439 3,568
7.500%, 08/01/25 3,006 3,012
8.500%, 08/01/26 3,470 3,600
7.000%, 11/01/26 4,012 3,931
8.000%, 12/15/26 1,953 1,997
7.500%, 05/01/27 4,514 4,524
- -------------------------------------------------------
DESCRIPTION PAR (000) VALUE (000)
- -------------------------------------------------------
GNMA
7.500%, 12/15/25 $5,391 $ 5,408
6.500%, 04/15/26 5,932 5,674
7.000%, 06/15/26 1,885 1,858
7.500%, 06/15/27 2,485 2,493
----------
TOTAL U.S. GOVERNMENT MORTGAGE-BACKED BONDS
(Cost $54,950) 55,200
----------
ASSET-BACKED SECURITIES -- 9.8%
Aames Mortgage Trust,
Series 96-B, Class A1B
7.275%, 05/15/20 2,489 2,517
EQCC, Series 96-4, Class A5
6.710%, 07/15/11 2,000 1,992
Equivantage Home Equity Loan
Trust, Series 96-1, Class A1
6.550%, 10/25/25 1,473 1,451
First Plus Home Loan Trust,
Series 1997-2, Class A5
6.820%, 04/10/23 2,200 2,201
Independent National Mortgage,
Series 96-A, Class A1
6.710%, 09/25/26 96 96
Metlife Captial Equipment Loan
Trust, Series 97-A, Class A
6.850%, 05/20/08 1,800 1,806
Money Store Home Equity Trust,
Series 96-B, Class A7
7.550%, 06/15/20 3,145 3,213
Saxon Asset Securities Trust,
Series 96-2, Class A2
6.475%, 11/25/20 1,950 1,936
UCFC, Series 96-D, Class A2
6.381%, 07/15/10 1,480 1,476
Vanderbilt Mortgage Finance,
Series 1997-B, Class 1A4
7.190%, 02/07/14 1,404 1,418
----------
TOTAL ASSET-BACKED SECURITIES
(Cost $18,045) 18,106
----------
NON-AGENCY MORTGAGE-BACKED BONDS -- 4.5%
Citicorp Mortgage Securities,
Series 97-1, Class A2 CMO
7.250%, 02/25/27 2,060 2,057
Countrywide Mortgage Broker
Services, Series 97-A1,
Class A1 CMO
7.000%, 03/25/27 2,075 2,071
General Electric Capital Mortgage
Services, Series 97-3,
Class A4 CMO
7.500%, 04/25/27 2,300 2,320
Residential Asset Securization Trust,
Series 97-A3, Class A10 CMO
7.250%, 05/25/27 1,835 1,833
----------
TOTAL NON-AGENCY MORTGAGE-BACKED BONDS
(Cost $8,205) 8,281
----------
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
70
<PAGE>
[SQUARE BULLET] COREFUND FIXED INCOME FUNDS
- --------------------------------------------------------
DESCRIPTION PAR (000) VALUE (000)
- --------------------------------------------------------
CORPORATE BONDS -- 18.1%
BANKING -- 6.5%
Bank One
8.000%, 04/29/27 $1,980 $ 2,039
First Union Capital I
7.935%, 01/15/27 1,820 1,790
Provident Bank
7.125%, 03/15/03 1,955 1,953
Santander Finance
6.375%, 02/15/11 1,955 1,784
Societe Generale
7.400%, 06/01/06 2,115 2,131
Wells Fargo Capital I
7.960%, 12/15/26 2,210 2,191
----------
11,888
----------
FINANCIAL SERVICES -- 1.9%
CNA Financial
7.250%, 11/15/23 725 681
Fairfax Financial Holdings LP
8.300%, 04/15/26 1,515 1,572
Lehman Brothers Holdings
7.375%, 05/15/04 1,320 1,333
----------
3,586
----------
INDUSTRIAL -- 9.7%
American Stores
8.000%, 06/01/26 2,110 2,128
Barrick Gold
7.500%, 05/01/07 1,855 1,892
Legrand S.A.
8.500%, 02/15/25 2,590 2,862
Loews
6.750%, 12/15/06 1,880 1,821
Nabisco
7.550%, 06/15/15 1,845 1,806
Noranda
8.125%, 06/15/04 1,940 2,037
Tele-Communications
8.650%, 09/15/04 1,000 1,043
Time Warner
7.750%, 06/15/05 1,985 2,025
Tosco
7.625%, 05/15/06 2,185 2,237
----------
17,851
----------
TOTAL CORPORATE BONDS
(Cost $33,313) 33,325
----------
- -------------------------------------------------------
DESCRIPTION PAR (000) VALUE (000)
- -------------------------------------------------------
REPURCHASE AGREEMENT -- 2.3%
Sanwa Bank
5.85%, dated 06/30/97, matures
07/01/97, repurchase price
$4,194,682 (collateralized by
U.S. Note, par value $4,240,000,
6.625%, 06/30/01; market
value $4,290,880) $4,194 $ 4,194
----------
TOTAL REPURCHASE AGREEMENT
(Cost $4,194) 4,194
----------
TOTAL INVESTMENTS -- 99.2%
(Cost $181,957) 182,592
----------
OTHER ASSETS AND LIABILITIES,
NET -- 0.8% 1,394
----------
NET ASSETS:
Portfolio Shares -- Class Y ($.001
par value -- 1 billion authorized)
based on 17,801,308 outstanding shares 183,444
Portfolio Shares -- Class A ($.001
par value -- 1 billion authorized)
based on 158,316 outstanding shares 1,664
Accumulated Net Realized Loss
on Investments (1,757)
Net Unrealized Appreciation
on Investments 635
----------
TOTAL NET ASSETS -- 100.0% $183,986
==========
NET ASSET VALUE AND REDEMPTION
PRICE PER SHARE -- CLASS Y $10.24
==========
NET ASSET VALUE AND REDEMPTION
PRICE PER SHARE -- CLASS A $10.24
==========
CMO -- COLLATERALIZED MORTGAGE OBLIGATION
FHLMC -- FEDERAL HOME LOAN MORTGAGE CORPORATION
FNMA -- FEDERAL NATIONAL MORTGAGE ASSOCIATION
GNMA -- GOVERNMENT NATIONAL MORTGAGE ASSOCIATION
LP -- LIMITED PARTNERSHIP
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
71
<PAGE>
STATEMENT
OF
NET ASSETS
AS OF
JUNE 30, 1997
GLOBAL BOND FUND
[PIE CHART]
UNITED STATES 28%
UNITED KINGDOM 20%
SWEDEN 5%
AUSTRALIA 6%
CASH EQUIVALENTS 7%
DENMARK 7%
FRANCE 3%
GERMANY 16%
NEW ZEALAND 5%
SPAIN 3%
% OF TOTAL PORTFOLIO INVESTMENTS
- -------------------------------------------------------
DESCRIPTION PAR (000)(1) VALUE (000)
- -------------------------------------------------------
FOREIGN BONDS -- 52.3%
AUSTRALIA -- 6.2%
Australian Government
10.000%, 10/15/02 $ 800 $ 697
New South Wales Treasury
12.000%, 12/01/01 1,600 1,466
----------
2,163
----------
DENMARK -- 7.2%
Kingdom of Denmark
7.000%, 11/10/24 16,850 2,509
----------
GERMANY -- 15.4%
Bundesrepublic
6.250%, 01/04/24 9,590 5,348
----------
NEW ZEALAND -- 4.8%
Government of New Zealand
8.000%, 11/15/06 2,320 1,687
----------
SWEDEN -- 4.7%
Government of Sweden
8.000%, 08/15/07 11,500 1,634
----------
UNITED KINGDOM -- 14.0%
Chubu Electric Power
6.750%, 08/10/99 950 1,565
Halifax Building
8.375%, 12/15/99 950 1,616
United Kingdom Treasury
10.500%, 05/19/99 950 1,674
----------
4,855
----------
TOTAL FOREIGN BONDS
(Cost $18,084) 18,196
----------
- -------------------------------------------------------
DESCRIPTION PAR (000)(1) VALUE (000)
- -------------------------------------------------------
COMMERCIAL PAPER -- 18.7%
Banque International Luxembourg
5.58%, 07/21/97 $ 1,000 $ 997
Cargill Financial
5.81%, 07/10/97 1,000 998
Commerical Union
5.58%, 07/10/97 1,000 999
Credit Local
5.56%, 07/07/97 1,000 999
McDonald's
5.61%, 07/07/97 500 499
National Rural Utilities
5.65%, 07/21/97 1,000 997
Santander International
5.67%, 07/28/97 1,000 996
----------
TOTAL COMMERCIAL PAPER
(Cost $6,486) 6,485
----------
DEBT OPTIONS -- 0.6%
FRANCE -- 0.1%
Government of France OAT 7.5%
Put, strike @ 114.68* 23,000,000 52
----------
GERMANY -- 0.4%
Bundesrepublic 7.375% Put,
strike @ 112.45* 7,300,000 40
Bundesrepublic 6.25% Put,
strike @ 96.32* 6,000,000 89
----------
129
----------
SWEDEN -- 0.1%
Government of Sweden 8.00%
Put, strike @ 6.71* 11,500,000 36
----------
TOTAL DEBT OPTIONS
(Cost $382) 217
----------
CURRENCY OPTIONS -- 0.1%
Deutsche Mark Call,
strike 1.7025* 7,000,000 28
----------
TOTAL CURRENCY OPTIONS
(Cost $139) 28
----------
U.S. TREASURY OBLIGATIONS-- 19.3%
U.S. Treasury Notes
4.75%, 09/30/98 6,800 6,705
----------
TOTAL U.S. TREASURY OBLIGATIONS
(Cost $6,777) 6,705
----------
DEMAND DEPOSIT -- 6.7%
Morgan Stanley
4.35%, 07/01/97 2,347 2,347
----------
TOTAL DEMAND DEPOSIT
(Cost $2,347) 2,347
----------
TOTAL INVESTMENTS -- 97.7%
(Cost $34,215) 33,978
----------
OTHER ASSETS AND LIABILITIES,
NET -- 2.3% 794
----------
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
72
<PAGE>
[SQUARE BULLET] COREFUND FIXED INCOME FUNDS
- --------------------------------------------------------
DESCRIPTION VALUE (000)
- --------------------------------------------------------
NET ASSETS:
Portfolio Shares -- Class Y ($.001
par value -- 25 million authorized)
based on 3,627,358 outstanding shares $36,004
Portfolio Shares -- Class A ($.001
par value --25 million authorized)
based on 19,095 outstanding shares 189
Accumulated net realized loss
on investments (1,573)
Net unrealized appreciation on forward
foreign currency contracts, foreign
currency and translation of other assets
and liabilities in foreign currency 211
Net unrealized depreciation
on investments (237)
Accumulated net investment income 178
----------
TOTAL NET ASSETS -- 100.0% $34,772
==========
NET ASSET VALUE, OFFERING AND REDEMPTION
PRICE PER SHARE -- CLASS Y $9.54
==========
NET ASSET VALUE AND REDEMPTION PRICE
PER SHARE -- CLASS A $9.52
==========
* NON-INCOME PRODUCING SECURITY
(1) IN LOCAL CURRENCY UNLESS OTHERWISE INDICATED
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
INTERMEDIATE MUNICIPAL BOND FUND
[PIE CHART]
REVENUE BONDS 50%
CASH EQUIVALENTS 3%
GENERAL OBLIGATIONS 37%
PRE-REFUNDED SECURITIES 10%
% OF TOTAL PORTFOLIO INVESTMENTS
- --------------------------------------------------------
DESCRIPTION PAR (000) VALUE (000)
- --------------------------------------------------------
MUNICIPAL BONDS -- 94.6%
COLORADO -- 1.1%
El Paso County, Colorado GO
5.200%, 12/01/02 $ 20 $ 21
----------
FLORIDA -- 2.7%
Jacksonville, Florida Electric
Authority Revenue Bond,
Series 3-A
5.200%, 10/01/02 50 52
----------
GEORGIA -- 2.7%
De Kalb County, Georgia Health
Facilities GO
5.300%, 01/01/03 50 52
----------
HAWAII -- 2.6%
Hawaii State GO
5.200%, 06/01/04 50 51
----------
ILLINOIS -- 7.5%
Bloomingdale, Illinois GO
5.450%, 01/01/09 85 87
Illinois State Sales Tax
Revenue Bond, Series S
4.900%, 06/15/07 60 59
----------
146
----------
MARYLAND -- 2.6%
Maryland State Health & Higher
Education Facilities Authority
Revenue Bond for Johns
Hopkins Project
5.125%, 07/01/03 50 51
----------
MASSACHUSETTS -- 2.7%
Massachusetts Bay Transportation
Authority Revenue Bond, Series A
5.300%, 03/01/05 50 52
----------
MICHIGAN -- 5.2%
Grand Haven, Michigan Electric
Revenue Bond MBIA
5.000%, 07/01/04 100 102
----------
73
<PAGE>
STATEMENT
OF
NET ASSETS
AS OF
JUNE 30, 1997
INTERMEDIATE MUNICIPAL BOND FUND (CONCLUDED)
- --------------------------------------------------------
DESCRIPTION PAR (000) VALUE (000)
- --------------------------------------------------------
NEW JERSEY -- 6.1%
Burlington County, New Jersey
Community Bridge Systems
Revenue Bond, Callable
10/01/03 at 101 CG
5.050%, 10/01/04 $ 50 $ 51
Medford Township, New Jersey
Board of Education FGIC
5.950%, 02/01/03 65 69
----------
120
----------
PENNSYLVANIA -- 61.4%
Allegheny County, Pennsylvania
Hospital Development Authority
Revenue Bond for Presbyterian
University Hospital, Series B2 (A)
4.200%, 03/01/18 80 80
Allegheny County, Pennsylvania,
Series C-33, GO
7.450%, 02/15/98 50 51
Governor Mifflin, Pennsylvania
School District GO AMBAC
4.850%, 11/15/01 50 51
Lehigh County, Pennsylvania
GO FGIC
5.125%, 11/15/08 110 111
Luzerne County, Pennsylvania,
Series A, GO, Pre-Refunded
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 88
Pennsylvania State Industrial
Development Authority Revenue
Bond AMBAC
5.000%, 07/01/04 100 101
Pennsylvania State Infrastructure
Authority Revenue Bond for
Pennvest Loan Pool Project MBIA
6.000%, 09/01/03 65 70
Pennsylvania State Turnpike
Commission Revenue Bond,
Series 1, Pre-Refunded 12/01/01
at 102 FGIC
7.150%, 12/01/11 50 56
Pennsylvania State Turnpike
Commission Revenue Bond,
Series F, Pre-Refunded 12/01/99
at 102 AMBAC
7.250%, 12/01/17 50 54
- --------------------------------------------------------
DESCRIPTION PAR (000) VALUE (000)
- --------------------------------------------------------
Philadelphia, Pennsylvania Airport
Parking Authority Revenue
Bond AMBAC
5.500%, 09/01/05 $ 80 $ 83
Pittsburgh, Pennsylvania School
District, Series A, GO FGIC
4.850%, 09/01/03 100 101
Reading, Pennsylvania Parking
Authority Revenue Bond MBIA
4.950%, 11/15/02 50 51
Scranton-Lackawana, Pennsylvania
Health and Welfare Authority
Revenue Bond for Mercy Health
Project, Series B MBIA
5.000%, 01/01/06 50 50
University of Pittsburgh, Pennsylvania
Revenue Bond for University
Capital Projects FGIC
5.050%, 06/01/10 90 89
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 59
----------
1,199
----------
TOTAL MUNICIPAL BONDS
(Cost $1,825) 1,846
----------
CASH EQUIVALENT -- 3.4%
SEI Institutional Tax
Free Portfolio
67 67
----------
TOTAL CASH EQUIVALENT
(Cost $67) 67
----------
TOTAL INVESTMENTS -- 98.0%
(Cost $1,892) 1,913
----------
OTHER ASSETS AND LIABILITIES,
NET -- 2.0% 39
----------
NET ASSETS:
Portfolio Shares -- Class Y ($0.001 par
value -- 100 million authorized) based
on 98,840 outstanding shares 1,025
Portfolio Shares -- Class A ($0.001 par
value -- 100 million authorized) based
on 95,399 outstanding shares 989
Accumulated Net Realized Loss
on Investments (83)
Net Unrealized Appreciation
on Investments 21
----------
TOTAL NET ASSETS -- 100.0% $1,952
==========
NET ASSET VALUE AND REDEMPTION
PRICE PER SHARE -- CLASS Y $10.05
==========
NET ASSET VALUE AND REDEMPTION
PRICE PER SHARE -- CLASS A $10.05
==========
(A) VARIABLE RATE SECURITY -- THE RATE REFLECTED ON THE STATEMENT OF NET ASSETS
IS THE RATE IN EFFECT ON JUNE 30, 1997.
AMBAC -- AMERICAN MUNICIPAL BOND ASSURANCE COMPANY
CG -- COUNTY GUARANTY
FGIC -- FINANCIAL GUARANTY INSURANCE COMPANY
GO -- GENERAL OBLIGATION
MBIA -- MUNICIPAL BOND INVESTORS ASSURANCE
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
74
<PAGE>
[SQUARE BULLET] COREFUND FIXED INCOME FUNDS
PENNSYLVANIA MUNICIPAL BOND FUND
[PIE CHART]
REVENUE BONDS 72%
GENERAL OBLIGATIONS 27%
PRE-REFUNDED SECURITIES 1%
% OF TOTAL PORTFOLIO INVESTMENTS
- --------------------------------------------------------
DESCRIPTION PAR (000) VALUE (000)
- --------------------------------------------------------
MUNICIPAL BONDS -- 98.5%
PENNSYLVANIA -- 96.1%
Allegheny County, Pennsylvania
GO, Series C-43, Callable
09/15/04 at 100 MBIA
5.875%, 09/15/10 $ 60 $ 62
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%, 10/01/03 125 129
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 26
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 10 10
Allegheny County, Pennsylvania
Sanitation Authority Sewer
Revenue Bond, Series B,
Pre-Refunded 06/01/99
at 100 FGIC
7.450%, 06/01/99 130 138
Allegheny County, Pennsylvania
GO, Series C-43, Callable
09/15/04 at 100 MBIA
5.875%, 09/15/13 100 103
- -------------------------------------------------------
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 $ 68
Bucks County, Pennsylvania Bucks
County Community College
5.500%, 06/15/14 300 301
Center City District, Pennsylvania
Business Improvement
Assessment Bond, Callable
12/01/07 at 100 AMBAC
5.600%, 12/01/08 60 63
Central Bucks, Pennsylvania
School District GO, Callable
02/01/01 at 100
6.600%, 02/01/03 175 187
Crawford, Pennsylvania Central
School District GO FGIC
7.000%, 02/15/05 100 114
Delaware County, Pennsylvania
Revenue Bond for Villanova
University AMBAC
5.400%, 08/01/08 200 206
Delaware County, Pennsylvania GO
7.100%, 12/01/98 170 172
5.500%, 10/01/15 75 75
Dover Township, Pennsylvania
Sewer Authority Revenue Bond
6.250%, 05/01/12 20 22
Hampden Township, Pennsylvania
Sewer Authority Special
Obligation Bond, Callable
10/01/96 at 100
5.350%, 04/01/03 110 112
Lower Burrell, Pennsylvania City
Municipal Sewer Authority
Revenue Bond AMBAC
5.125%, 02/01/16 250 238
Lower Merion Township,
Pennsylvania GO, Callable
08/01/02 at 100
5.625%, 08/01/05 100 104
Manheim, Pennsylvania Central
School District GO, Callable
05/15/04 at 100 FGIC
6.100%, 05/15/14 100 104
Millcreek Township, Pennsylvania
Sewer Authority Revenue Bond,
Callable 11/01/99 at 100 MBIA
6.000%, 11/01/06 150 156
Montgomery County, Pennsylvania
Higher Education and Health
Authority Revenue Bond for
Abington Memorial Hospital,
Series A AMBAC
5.125%, 06/01/14 250 237
Montgomery County, Pennsylvania
GO, Callable 10/15/03 at 100
5.750%, 10/15/11 175 181
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
75
<PAGE>
STATEMENT
OF
NET ASSETS
AS OF
JUNE 30, 1997
PENNSYLVANIA MUNICIPAL BOND FUND (CONCLUDED)
- -------------------------------------------------------
DESCRIPTION PAR (000) VALUE (000)
- -------------------------------------------------------
North Wales, Pennsylvania Water
Authority Revenue Bond
Pre-Refunded 11/01/04 at 100
6.750%, 11/01/04 $ 100 $ 112
Northampton County, Pennsylvania
Higher Education Authority
Revenue Bond for Lehigh
University, Series A MBIA
5.750%, 11/15/18 150 152
Pennsylvania Housing Finance
Agency Single Family
Mortgage- 55 Revenue Bond
4.700%, 10/01/01 100 100
Pennsylvania State Convention
Center Authority Revenue Bond,
Series A FGIC
6.700%, 09/01/16 75 87
Pennsylvania State General
Obligation Bond
5.125%, 09/15/04 450 460
5.000%, 11/15/12 500 487
Pennsylvania State GO, Series 2
6.000%, 07/01/05 25 27
6.250%, 07/01/11 60 66
Pennsylvania State Higher
Education Facilities Authority
Revenue Bond for University of
Pennsylvania, Series B
5.700%, 01/01/11 150 154
Pennsylvania State Higher
Education Facilities Authority
Health Services Revenue Bond
for Allegheny/Delaware Valley,
Series A MBIA
5.500%, 11/15/08 400 413
Pennsylvania State Higher Education
Facilities Authority Revenue Bond
for Allegheny General Hospital,
Series A
6.300%, 09/01/97 200 201
Pennsylvania State Higher Education
Facilities Authority Revenue Bond
for Health Services, Series A,
Callable 01/01/04 at 102
6.000%, 01/01/10 100 106
Pennsylvania State Higher Education
Facilities Authority Revenue Bond
for Thomas Jefferson University,
Series A, Callable 07/01/99 at 102
6.000%, 07/01/19 150 152
Pennsylvania State Higher Education
Facilities Authority Revenue Bond
for University of Pennsylvania,
Series B
5.850%, 09/01/13 100 102
Pennsylvania State Higher
Educational Facilities
Authority, University of
Pennsylvania Project, Series B, RB
5.250%, 01/01/07 500 508
- --------------------------------------------------------
DESCRIPTION PAR (000) VALUE (000)
- --------------------------------------------------------
Pennsylvania State Housing
Finance Agency Revenue
Bond, Series C
6.400%, 07/01/12 $ 300 $ 310
Pennsylvania State Industrial
Development Authority
Revenue Bond, State
Infrastructure Investment
Authority Revenue Bond for
Pennvest Loan Pool MBIA
6.000%, 09/01/04 400 431
Pennsylvania State Industrial
Development Authority
Revenue Bond AMBAC
5.800%, 07/01/09 250 266
6.000%, 07/01/09 305 329
6.000%, 01/01/12 100 105
Pennsylvania State Industrial
Development Authority Revenue
Bond Economic Development
AMBAC
6.000%, 07/01/08 600 649
Pennsylvania State Turnpike
Commission Revenue Bond,
Series O, Callable 12/01/02
at 102 FGIC
5.900%, 12/01/08 125 132
Pennsylvania State Turnpike
Commission Revenue Bond,
Series P
5.100%, 12/01/99 150 153
5.800%, 12/01/06 75 79
Pennsylvania State University
Revenue Bond
5.200%, 03/01/98 250 252
Pennsylvania State University
Revenue Bond, Callable
03/01/04 at 100
6.150%, 03/01/05 185 198
Pennsylvania State, Third Series,
Callable 09/01/03 at 101 GO
5.000%, 09/01/12 350 337
Philadelphia Pennsylvania Parking
Authority Revenue Bond
5.750%, 09/01/07 400 426
Philadelphia Pennsylvania, Industrial
Authority, Revenue Bond
5.250%, 11/15/09 500 502
Philadelphia, Pennsylvania Hospitals
and Higher Education Facilities
Authority Revenue Bond for
Pennsylvania Hospital,
Series A FGIC
5.250%, 02/15/14 100 96
Pittsburg Pennsylvania General
Obligation Bond Callable
09/01/05 at 100, FGIC
4.900%, 03/01/07 350 350
Pittsburgh, Pennsylvania GO,
Series D, Callable 09/01/02
at 102 AMBAC
6.125%, 09/01/17 25 26
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
76
<PAGE>
[SQUARE BULLET] COREFUND FIXED INCOME FUNDS
- -------------------------------------------------------
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 $ 119
Radnor Township, Pennsylvania
GO, Callable 05/01/06 at 100
5.250%, 11/01/16 200 196
Scranton-Lackawana, Pennsylvania
Health and Welfare Authority
Revenue Bond Mercy Health
Project, Series B MBIA
5.000%, 01/01/06 250 251
Scranton-Lackawanna, Pennsylvania
Health and Welfare Authority
Revenue Bond for University of
Scranton, Series A
6.150%, 03/01/03 150 159
Seneca Valley, Pennsylvania GO
5.850%, 02/15/15 105 107
York, Pennsylvania City School
District GO, Callable 03/01/03
at 100 FGIC
5.600%, 03/01/07 75 77
----------
11,698
----------
PUERTO RICO -- 2.4%
University of Puerto Rico, Series M,
Revenue Bond, MBIA
5.250%, 06/01/25 300 291
----------
TOTAL MUNICIPAL BONDS
(Cost $11,731) 11,989
----------
TOTAL INVESTMENTS -- 98.5%
(Cost $11,731) 11,989
----------
OTHER ASSETS AND LIABILITIES,
NET -- 1.5% 186
----------
NET ASSETS:
Portfolio Shares -- Class Y ($0.001 par
value -- 100 million authorized shares)
based on 971,402 outstanding shares 10,037
Portfolio Shares -- Class A ($0.001 par
value -- 100 million authorized shares)
based on 191,350 outstanding shares 1,977
Accumulated Net Realized Loss
on Investments (97)
Net Unrealized Appreciation
on Investments 258
----------
TOTAL NET ASSETS -- 100.0% $12,175
==========
NET ASSET VALUE AND REDEMPTION PRICE
PER SHARE -- CLASS Y $10.47
==========
NET ASSET VALUE AND REDEMPTION PRICE
PER SHARE -- CLASS A $10.47
==========
AMBAC -- AMERICAN MUNICIPAL BOND ASSURANCE COMPANY
FGIC -- FINANCIAL GUARANTY INSURANCE COMPANY
FHA -- FEDERAL HOUSING AGENCY
GO -- GENERAL OBLIGATION
MBIA -- MUNICIPAL BOND INVESTORS ASSURANCE
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
NEW JERSEY MUNICIPAL BOND FUND
[PIE CHART]
REVENUE BONDS 40%
CASH EQUIVALENTS 4%
GENERAL OBLIGATIONS 56%
% OF TOTAL PORTFOLIO INVESTMENTS
- --------------------------------------------------------
DESCRIPTION PAR (000) VALUE (000)
- --------------------------------------------------------
MUNICIPAL BONDS -- 94.7%
NEW JERSEY -- 91.0%
Bayonne, New Jersey GO FGIC
5.900%, 05/01/08 $ 150 $ 158
Burlington County, New Jersey GO
5.200%, 10/01/05 80 82
Cherry Hill Township, New Jersey GO
5.900%, 06/01/05 50 53
Evesham Township, New Jersey Board
of Education GO FSA
4.900%, 09/01/02 75 76
Flemington-Raritan, New Jersey
Regional School District GO
5.700%, 05/01/06 50 52
Manalapan Township, New Jersey
Fire District Number 1
5.300%, 12/15/99 80 82
Marlboro Township, New Jersey
Board of Education GO FGIC
5.500%, 07/15/09 40 41
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
Project, Series B
6.000%, 07/01/13 50 52
New Jersey Health Care Facilities
Finance Authority Revenue Bond
for Burlington County Memorial
Hospital Project
6.000%, 07/01/12 50 52
New Jersey State Economic
Development Authority Revenue
Bond for Peddie School
Project, Series A
5.400%, 02/01/06 50 52
77
<PAGE>
STATEMENT
OF
NET ASSETS
AS OF
JUNE 30, 1997
[SQUARE BULLET] COREFUND FIXED INCOME FUNDS
NEW JERSEY MUNICIPAL BOND FUND (CONCLUDED)
- -------------------------------------------------------
DESCRIPTION PAR (000) VALUE (000)
- -------------------------------------------------------
New Jersey State Economic
Development Authority Revenue
Bond for Rutgers State
University-Civic Square AMBAC
6.125%, 07/01/24 $ 55 $ 57
New Jersey State Educational
Facilities Authority Revenue
Bond for University of Medicine
and Dentistry, Series B AMBAC
5.250%, 12/01/13 60 60
New Jersey State Educational
Facilities Authority Revenue
Bond for Princeton University
Project, Series A
5.500%, 07/01/04 100 106
New York & New Jersey States
Port Authority Revenue Bond,
Series 81
5.700%, 08/01/07 50 52
North Bergen Township,
New Jersey GO AMBAC
5.000%, 08/15/09 75 74
North Brunswick Township,
New Jersey GO
6.125%, 05/15/04 24 26
North Brunswick Township,
New Jersey Board of
Education GO
6.300%, 02/01/12 150 161
Ocean County, New Jersey GO
5.650%, 07/01/03 75 79
Ocean County, New Jersey
Utilities Authority Wastewater
Revenue Bond
5.125%, 01/01/11 75 74
Secaucus, New Jersey Utilities
Authority Sewer
Revenue Bond, Series A
6.100%, 12/01/10 60 65
South Brunswick Township,
New Jersey GO
5.950%, 08/01/14 100 104
South Monmouth, New Jersey
Regional Sewer Authority
Revenue Bond MBIA
5.550%, 01/15/06 50 52
- --------------------------------------------------------
DESCRIPTION PAR (000) VALUE (000)
- --------------------------------------------------------
West Windsor Township,
New Jersey Parking Authority
Revenue Bond
6.100%, 12/01/12 $ 50 $ 53
----------
1,706
----------
PENNSYLVANIA -- 3.7%
Allegheny County, Pennsylvania
Hospital Development Revenue
Bond for Presbyterian University
Hospital Project,
Series B2 (A) (B) (C)
4.200%, 03/01/18 70 70
----------
TOTAL MUNICIPAL BONDS
(Cost $1,729) 1,776
----------
CASH EQUIVALENT -- 4.2%
SEI Institutional Tax
Free Portfolio 79 79
----------
TOTAL CASH EQUIVALENT
(Cost $79) 79
----------
TOTAL INVESTMENTS -- 98.9%
(Cost $1,808) 1,855
----------
OTHER ASSETS AND LIABILITIES,
NET -- 1.1% 20
----------
NET ASSETS:
Portfolio Shares -- Class Y ($0.001
par value --100 million authorized)
based on 145,400 outstanding shares 1,429
Portfolio Shares -- Class A ($0.001
par value --100 million authorized)
based on 39,208 outstanding shares 402
Accumulated Net Realized Loss
on Investments (3)
Net Unrealized Appreciation
on Investments 47
----------
TOTAL NET ASSETS -- 100.0% $1,875
==========
NET ASSET VALUE AND REDEMPTION
PRICE PER SHARE -- CLASS Y $10.16
==========
NET ASSET VALUE AND REDEMPTION
PRICE PER SHARE -- CLASS A $10.15
==========
(A) VARIABLE RATE SECURITY -- THE RATE REFLECTED ON THE STATEMENT OF NET ASSETS
IS THE RATE IN EFFECT ON JUNE 30, 1997.
(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 DATE OR MATURITY DATE.
(C) SECURITY IS HELD IN CONNECTION WITH A LETTER OF CREDIT OR STANDBY BOND
PURCHASE AGREEMENT ISSUED BY A MAJOR COMMERCIAL BANK OR OTHER INSTITUTION.
AMBAC -- AMERICAN MUNICIPAL BOND ASSURANCE COMPANY
CG -- COUNTY GUARANTY
FGIC -- FINANCIAL GUARANTY INSURANCE COMPANY
FSA -- FINANCIAL SECURITY ASSURANCE
GO -- GENERAL OBLIGATION
MBIA -- MUNICIPAL BOND INVESTORS ASSURANCE
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
78
<PAGE>
[SQUARE BULLET] COREFUND MONEY MARKET FUNDS
TREASURY RESERVE
[PIE CHART]
U.S. TREASURY SECURITIES 38%
CASH EQUIVALENTS 62%
% OF TOTAL PORTFOLIOS INVESTMENTS
- -------------------------------------------------------
DESCRIPTION PAR (000) VALUE (000)
- -------------------------------------------------------
U.S. TREASURY OBLIGATIONS -- 38.3%
U.S. Treasury Bills+
5.356%, 08/14/97 $15,000 $ 14,905
5.662%, 08/21/97 10,000 9,924
5.901%, 08/21/97 10,000 9,921
5.328%, 08/28/97 9,000 8,926
5.404%, 09/04/97 15,000 14,859
5.581%, 09/11/97 15,000 14,839
5.539%, 09/18/97 10,000 9,883
5.643%, 10/02/97 10,000 9,860
5.597%, 10/09/97 15,000 14,776
5.589%, 10/16/97 15,000 14,760
5.508%, 11/13/97 10,000 9,804
5.564%, 11/13/97 10,000 9,800
5.361%, 12/11/97 10,000 9,768
5.624%, 01/08/98 8,500 8,260
5.592%, 02/05/98 7,000 6,774
5.648%, 03/05/98 10,000 9,630
5.806%, 04/02/98 10,000 9,579
5.796%, 04/30/98 10,000 9,538
5.587%, 05/28/98 10,000 9,512
U.S. Treasury Notes
5.550%, 07/31/97 8,500 8,499
5.750%, 10/31/97 12,000 12,000
5.375%, 11/30/97 13,000 12,993
5.250%, 12/31/97 12,000 11,985
5.625%, 01/31/98 15,000 15,001
U.S. Treasury STRIPS+
5.400%, 08/15/97 20,000 19,871
5.684%, 11/15/97 15,300 14,985
5.710%, 02/15/98 10,000 9,658
5.725%, 05/15/98 14,600 13,899
----------
TOTAL U.S. TREASURY OBLIGATIONS
(Cost $324,209) 324,209
----------
- -------------------------------------------------------
DESCRIPTION PAR (000) VALUE (000)
- -------------------------------------------------------
REPURCHASE AGREEMENTS -- 62.1%
Aubrey Lanston
5.90%, dated 06/30/97, matures
07/01/97, repurchase price
$198,032,450 (collateralized by
various U.S. Treasury Notes, ranging
in par value $25,089,000- $49,877,000,
5.125%-8.25%, 04/30/98-06/30/02; total
market value $202,064,598) $198,000 $198,000
First National Bank of Chicago
5.95%, dated 06/30/97, matures
07/01/97, repurchase price
$38,350,337 (collateralized by
various U.S. Treasury Notes,
ranging in par value $4,438,000-
$26,115,000, 5.75%-8.00%,
10/31/00-05/15/01; total market
value $39,237,251) 38,344 38,344
Goldman Sachs
5.80%, dated 06/30/97, matures
07/01/97, repurchase price $23,003,706
(collateralized by various U.S. Treasury
Notes, ranging in par value
$2,393,000- $20,607,000, 9.125%,
05/15/99; total market value
$23,548,457) 23,000 23,000
Hong Kong Shanghai Bank
5.80%, 06/30/97, matures 07/01/97,
repurchase price $20,003,222
(collateralized by various U.S.
Treasury Notes, ranging in par
value $8,035,000-$11,965,000,
5.75%-7.25%, 08/15/03-05/15/04;
total market value
$20,540,214) 20,000 20,000
Merrill Lynch
5.60%, dated 06/30/97, matures
07/01/97, repurchase price
$30,004,667 (collateralized by
U.S. Treasury Note, par value
$30,260,000, 6.125%, 05/15/98;
market value $30,580,756) 30,000 30,000
Sanwa Bank
5.85%, dated 06/30/97, matures
07/01/97, repurchase price
$197,032,013 (collateralized by
various U.S. Treasury Notes,
ranging in par value $19,628,000-
$52,052,000, 6.00%-8.875%,
07/15/98-02/15/99; total market
value $200,973,619) 197,000 197,000
Swiss Bank
5.875%, dated 06/30/97, matures
07/01/97, repurchase price
$20,003,264 (collateralized by
U.S. Treasury Note, par value
$20,765,000, 5.625%, 11/30/00;
market value $20,480,520) 20,000 20,000
----------
TOTAL REPURCHASE AGREEMENTS
(Cost $526,344) 526,344
----------
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
79
<PAGE>
STATEMENT
OF
NET ASSETS
AS OF
JUNE 30, 1997
TREASURY RESERVE (CONCLUDED)
- --------------------------------------------------------
DESCRIPTION VALUE (000)
- --------------------------------------------------------
TOTAL INVESTMENTS -- 100.4%
(Cost $850,553) $850,553
----------
OTHER ASSETS AND LIABILITIES,
NET -- (0.4%) (3,023)
----------
NET ASSETS:
Portfolio Shares -- Class Y ($0.001 par
value -- 1,250 million authorized) based
on 835,378,664 outstanding shares 835,379
Portfolio Shares -- Class C ($0.001 par
value -- 1,250 million authorized) based
on 12,144,618 outstanding shares 12,145
Accumulated Net Realized Gain
on Investments 6
----------
TOTAL NET ASSETS -- 100.0% $847,530
==========
NET ASSET VALUE, OFFERING AND REDEMPTION
PRICE PER SHARE -- CLASS Y $1.00
==========
NET ASSET VALUE AND REDEMPTION
PRICE PER SHARE -- CLASS C $1.00
==========
+ YIELD TO MATURITY
STRIPS -- SEPARATELY TRADED REGISTERED INTEREST AND PRINCIPAL SECURITIES
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
CASH RESERVE
[PIE CHART]
U.S. GOVERNMENT SECURITIES 6%
CASH EQUIVALENTS 15%
CORPORATE SECURITIES 79%
% OF TOTAL INVESTMENTS
- --------------------------------------------------------
DESCRIPTION PAR (000) VALUE (000)
- --------------------------------------------------------
COMMERCIAL PAPER -- 48.8%
BANKING -- 9.7%
Abbey National Bank
5.725%, 08/11/97 $10,000 $ 9,936
Abn Amro North
American Finance
5.479%, 07/09/97 15,000 14,982
5.392%, 07/28/97 2,000 1,992
Banc One Funding
5.630%, 07/29/97 10,000 9,957
Banc One Guaranteed Funding
5.688%, 07/30/97 13,000 12,941
Bank of America
5.690%, 08/04/97 15,000 14,921
Deutsche Bank
5.680%, 07/07/97 15,000 14,986
Society Generale
5.900%, 06/16/98 9,000 8,991
----------
88,706
----------
FINANCIAL SERVICES -- 19.1%
Asset Securitization
5.713%, 07/15/97 15,000 14,967
5.722%, 07/21/97 10,000 9,969
5.689%, 08/11/97 7,500 7,452
5.680%, 09/03/97 6,050 5,990
Eureka Securitization
5.711%, 07/31/97 15,000 14,930
5.647%, 09/15/97 11,500 11,365
Goldman Sachs
5.576%, 07/02/97 3,000 3,000
5.533%, 07/22/97 5,000 4,984
5.676%, 08/20/97 10,000 9,922
Merrill Lynch
5.494%, 07/01/97 5,000 5,000
5.726%, 07/22/97 7,000 6,977
5.808%, 10/31/97 10,000 9,808
5.835%, 12/02/97 7,500 7,318
80
<PAGE>
[SQUARE BULLET] COREFUND MONEY MARKET FUNDS
- -------------------------------------------------------
DESCRIPTION PAR (000) VALUE (000)
- -------------------------------------------------------
Morgan Stanley
5.518%, 07/15/97 $ 5,000 $ 4,990
5.689%, 07/16/97 10,000 9,977
5.650%, 09/16/97 10,000 9,881
New Center Asset Trust
5.464%, 07/28/97 3,000 2,988
5.707%, 11/25/97 10,000 9,773
Paccar Financial
5.566%, 07/02/97 20,000 19,997
5.563%, 09/23/97 5,000 4,937
----------
174,225
----------
INDUSTRIAL -- 19.2%
Cafco
5.591%, 07/15/97 12,800 12,772
Caisse de Depots En
Consignations
5.600%, 07/08/97 8,000 7,991
5.730%, 08/06/97 18,880 18,773
Campbell Soup
5.617%, 07/15/97 11,900 11,875
Ford Motor
5.689%, 08/05/97 10,000 9,946
Ford Motor Credit
5.560%, 07/08/97 7,000 6,992
5.693%, 07/21/97 17,000 16,947
General Electric Credit
5.707%, 08/12/97 10,000 9,934
General Electric Capital
5.546%, 08/26/97 10,000 9,917
5.665%, 10/21/97 10,000 9,827
Mitsubishi International
5.580%, 07/07/97 15,000 14,986
Mobil Australia
6.201%, 07/01/97 8,097 8,097
Norwest Financial
5.628%, 09/22/97 15,000 14,808
Pitney Bowes Credit
5.643%, 09/26/97 3,600 3,552
5.851%, 10/02/97 4,000 3,941
Southwestern Bell Capital
Communications
5.607%, 07/22/97 5,250 5,233
Swedish Export Credit
5.497%, 07/16/97 10,000 9,978
----------
175,569
----------
UTILITIES -- 0.8%
National Rural Utilities
5.614%, 09/19/97 7,200 7,111
----------
TOTAL COMMERCIAL PAPER
(Cost $445,611) 445,611
----------
- -------------------------------------------------------
DESCRIPTION PAR (000) VALUE (000)
- -------------------------------------------------------
U.S. GOVERNMENT AGENCY OBLIGATIONS -- 6.0%
FHLB
6.000%, 09/24/97 $ 6,500 $ 6,508
5.350%, 12/10/97 18,350 18,347
5.810%, 01/23/98 11,000 11,000
5.805%, 02/13/98 13,400 13,400
5.850%, 03/17/98 5,000 5,000
----------
TOTAL U.S. GOVERNMENT AGENCY OBLIGATIONS
(Cost $54,255) 54,255
----------
CORPORATE OBLIGATIONS -- 18.0%
BANKING -- 2.2%
Abbey National Bank (A)
5.575%, 02/25/98 20,000 19,983
----------
FINANCIAL SERVICES -- 9.1%
Abbey National Treasury
Services (A)
5.650%, 04/15/98 10,000 9,996
American Express (A)
5.658%, 09/11/97 10,000 10,000
Associates of North America (A)
5.570%, 03/02/98 15,000 14,993
Associates of North America
6.625%, 11/15/97 10,000 10,028
Credit Suisse (A)
5.628%, 03/13/98 10,000 10,000
Goldman Sachs
6.100%, 04/15/98 6,825 6,827
Morgan Stanley (A)
5.638%, 11/07/97 9,375 9,375
Paccar Financial (A)
5.568%, 06/18/98 12,000 11,993
----------
83,212
----------
INDUSTRIAL -- 6.7%
Amex Centurian (A)
5.658%, 09/12/97 6,000 6,000
E.I. DuPont de Nemours
5.590%, 10/08/97 5,000 5,000
8.650%, 12/01/97 5,000 5,061
Ford Motor Credit
8.000%, 12/01/97 3,460 3,486
6.350%, 02/12/98 1,800 1,806
Gannett
5.250%, 03/01/98 10,000 9,959
General Electric Capital
7.620%, 11/18/97 4,500 4,527
Province of Ontario
5.700%, 10/01/97 10,000 10,004
Rabobank Nederland
6.500%, 08/05/97 1,160 1,160
Toyota Motor Credit (A)
5.680%, 09/26/97 10,000 10,000
Wal-Mart Stores
5.500%, 03/01/98 4,000 3,997
----------
61,000
----------
TOTAL CORPORATE OBLIGATIONS
(Cost $164,195) 164,195
----------
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
81
<PAGE>
STATEMENT
OF
NET ASSETS
AS OF
JUNE 30, 1997
CASH RESERVE (CONCLUDED)
- --------------------------------------------------------
DESCRIPTION PAR (000) VALUE (000)
- --------------------------------------------------------
TIME DEPOSITS -- 5.5%
First Union Bank
6.000%, 07/01/97 $10,000 10,000
Sumitomo Bank
6.125%, 07/01/97 40,000 40,000
----------
50,000
----------
TOTAL TIME DEPOSITS
(Cost $50,000) 50,000
----------
INSURANCE FUNDING AGREEMENTS -- 4.7%
Allstate (A)
5.745%, 07/01/97 18,000 18,000
Pacific Mutual Insurance (A)
5.721%, 07/01/97 25,000 25,000
----------
INSURANCE FUNDING AGREEMENTS
(Cost $43,000) 43,000
----------
MASTER NOTES -- 1.5%
Associates Corporation of
North America (A)
5.497%, 07/01/97 13,991 13,991
SLMA (A)
5.220%, 07/01/97 3 3
----------
13,994
----------
TOTAL MASTER NOTES
(Cost $13,994) 13,994
----------
CERTIFICATES OF DEPOSIT -- 10.0%
BANKING -- 8.9%
Barclays Bank PLC
5.910%, 03/09/98 14,750 14,747
5.940%, 06/19/98 5,000 4,997
Nat West Bank
5.860%, 03/10/98 10,000 9,995
National Westminster Bank PLC
5.940%, 06/26/98 15,000 14,992
Societe Generale
6.350%, 04/15/98 10,000 10,003
6.080%, 06/09/98 10,000 9,996
Swiss Bank
5.976%, 03/19/98 7,000 6,999
6.020%, 06/12/98 10,000 10,003
----------
81,732
----------
FINANCIAL SERVICES -- 1.1%
Credit Suisse
6.310%, 04/16/98 10,000 10,000
----------
- --------------------------------------------------------
DESCRIPTION PAR (000) VALUE (000)
- --------------------------------------------------------
TOTAL CERTIFICATES OF DEPOSIT
(Cost $91,732) $ 91,732
----------
ASSET-BACKED SECURITIES -- 1.8%
Capita Equipment Receivables
Trust, Series 1996-1, Class A1
5.600%, 10/15/97 $ 2,077 $ 2,078
Goldman Sachs, Investment
Trust Series 1997-C, Class N (A)
5.688%, 02/17/10 15,000 15,000
----------
TOTAL ASSET-BACKED SECURITIES
(Cost $17,078) 17,078
----------
REPURCHASE AGREEMENTS -- 3.8%
First National Bank of Chicago
5.95%, dated 06/30/97, matures 07/01/97,
repurchase price $1,549,256 (collateralized
by U.S. Treasury Note, par value
$1,555,000, 6.25%, 02/28/02; market value
$1,582,990) 1,549 1,549
Swiss Bank
5.95%, dated 06/30/97, matures
07/01/97, repurchase price
$33,246,494 (collateralized by
U.S. Treasury Note, par value
$33,405,000, 6.50%, 04/30/99;
market value $34,039,695) 33,241 33,241
----------
TOTAL REPURCHASE AGREEMENTS
(Cost $34,790) 34,790
----------
TOTAL INVESTMENTS -- 100.1%
(Cost $914,655) 914,655
----------
OTHER ASSETS AND LIABILITIES,
NET -- (0.1%) (711)
----------
NET ASSETS:
Portfolio Shares -- Class Y ($0.001
par value -- 1 billion authorized)
based on 886,387,843 outstanding shares 886,388
Portfolio Shares -- Class C ($0.001
par value -- 1 billion authorized)
based on 27,696,662 outstanding shares 27,697
Accumulated Net Realized Loss
on Investments (141)
----------
TOTAL NET ASSETS -- 100.0% $913,944
==========
NET ASSET VALUE AND REDEMPTION PRICE
PER SHARE -- CLASS Y $1.00
==========
NET ASSET VALUE AND REDEMPTION PRICE
PER SHARE -- CLASS C $1.00
==========
(A) VARIABLE RATE SECURITIES -- THE RATE REFLECTED ON THE STATEMENT OF NET
ASSETS IS THE RATE IN EFFECT ON JUNE 30, 1997.
FHLB -- FEDERAL HOME LOAN BANK
PLC -- PUBLIC LIMITED COMPANY
STRIPS -- SEPARATELY TRADED REGISTERED INTEREST AND PRINCIPAL SECURITIES
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
82
<PAGE>
[SQUARE BULLET] COREFUND MONEY MARKET FUNDS
TAX-FREE RESERVE
[PIE CHART]
TAX-EXEMPT COMMERCIAL PAPER 38%
ANTICIPATION NOTES 8%
GENERAL OBLIGATIONS 2%
REVENUE BONDS 42%
% OF TOTAL PORTFOLIO INVESTMENTS
- --------------------------------------------------------
DESCRIPTION PAR (000) VALUE (000)
- --------------------------------------------------------
MUNICIPAL BONDS -- 102.8%
ALASKA -- 1.6%
City of Valdez Alaska TECP
3.650%, 08/08/97 $1,500 $ 1,500
Valdez, Alaska Exxon Pipeline
Company Project (A) (B)
4.000%, 07/01/97 500 500
----------
2,000
----------
ARIZONA -- 0.6%
Flagstaff Arizona TECP
3.800%, 09/08/97 750 750
----------
CALIFORNIA -- 0.3%
Santa Clara, California Electric
Revenue Bond, Series A (A) (B)
4.000%, 07/01/97 340 340
----------
DELAWARE -- 1.8%
Delaware State Econ TECP
3.800%, 09/08/97 750 750
Wilmington, Delaware Franciscan
Health System (A) (B)
4.100%, 07/01/97 800 800
Wilmington, Delaware Hospital
Revenue Bond for Franciscan
Health Systems Project,
Series A (A) (B) (C)
4.100%, 07/01/97 700 700
----------
2,250
----------
FLORIDA -- 3.1%
Dade County, Florida Capital
Asset Series 1990 (A) (B) (C)
4.450%, 07/01/97 1,000 1,000
Sunshine State Florida TECP
3.600%, 08/14/97 2,800 2,800
----------
3,800
----------
- -------------------------------------------------------
DESCRIPTION PAR (000) VALUE (000)
- -------------------------------------------------------
ILLINOIS -- 8.6%
Chicago, Illinois Equipment Notes
3.600%, 12/04/97 $2,000 $ 2,000
Chicago, Illinois O'Hare
International Airport Revenue
Industrial Lien, Series C (A) (B)
4.100%, 07/01/97 1,500 1,500
Illinois Development Finance
Authority Revenue Bond
(A) (B) (C)
4.150%, 07/02/97 1,800 1,800
Illinois Development Finance
Authority Illinois Power
Company Project, Series B (A)
4.150%, 07/02/97 1,400 1,400
Illinois State Pollution Control
Authority Amoco Oil Company
Project (A) (B)
4.000%, 07/01/97 100 100
Illinois State Toll Highway
Authority, Series B
MBIA (A) (B)
4.150%, 07/01/97 2,400 2,400
St Charles, Illinois Revenue
Bond (A) (B) (C)
4.200%, 07/01/97 1,300 1,300
----------
10,500
----------
INDIANA -- 5.0%
City of Mount Vernon
Indiana TECP
3.750%, 08/13/97 2,000 2,000
Gary, Indiana Industrial
Environmental Improvement
Authority U.S. Steel
Corporation Project (A) (B)
4.100%, 07/15/97 1,600 1,600
Sullivan, Indiana TECP
3.650%, 08/12/97 2,535 2,535
----------
6,135
----------
IOWA -- 0.3%
Des Moines, Iowa Commercial
Development Revenue Bond
Capitol Center III Project (A) (B)
4.150%, 07/01/97 400 400
----------
KANSAS -- 4.6%
Burlington Kansas Power and
Light TECP
3.750%, 09/12/97 2,000 2,000
Burlington, Kansas TECP
3.900%, 09/05/97 1,500 1,500
3.750%, 09/08/97 600 600
3.750%, 09/10/97 1,450 1,450
Wichita, Kansas Revenue Bond
Wichita Health Systems Project,
Series XXV (A) (B)
4.350%, 07/02/97 100 100
----------
5,650
----------
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
83
<PAGE>
STATEMENT
OF
NET ASSETS
AS OF
JUNE 30, 1997
TAX-FREE RESERVE (CONTINUED)
- --------------------------------------------------------
DESCRIPTION PAR (000) VALUE (000)
- --------------------------------------------------------
KENTUCKY -- 1.6%
Mayfield, Kentucky Multi-City
Lease Revenue Bond Kentucky
League of Cities Funding
Project (A)
4.300%, 07/01/97 $2,000 $ 2,000
----------
LOUISIANA -- 5.9%
De Soto Parish, Louisiana Central
Louisiana Electric Company
Pollution Control Revenue
Bond (A) (B)
4.150%, 07/02/97 700 700
Jefferson Parish, Louisiana
Industrial Development Board
George J. Ackel, Sr.
Project (A) (B)
4.200%, 07/01/97 3,750 3,750
Saint Charles Parish, Louisiana
Pollution Control Shell Oil
Company Project,
Series B (A) (B)
4.000%, 07/01/97 750 750
South Louisiana Port Common
Marine Term Revenue Refunding-
Occidental Petroleum (A) (B) (C)
4.150%, 07/01/97 2,000 2,000
----------
7,200
----------
MASSACHUSETTS -- 1.6%
Massachusetts State GO,
Series B (A) (B)
4.000%, 12/01/97 2,000 2,000
----------
MICHIGAN -- 1.2%
Cornell Township, Michigan
Environment Improvement
Authority Escanaba Paper
Company Project (A) (B)
4.000%, 07/01/97 450 450
Delta County, Michigan
Environmental Improvement
Authority Mead Escambia
Paper, Series C (A) (B)
4.100%, 07/01/97 700 700
Michigan State Consumers
Power Project (A) (B)
4.050%, 07/01/97 300 300
----------
1,450
----------
MINNESOTA -- 1.2%
Rochester, Minnesota TECP
3.700%, 08/20/97 1,500 1,500
----------
MISSISSIPPI -- 1.4%
Clairborne County, Mississippi
TECP
3.700%, 07/25/97 1,000 1,000
Jackson County, Mississippi
Chevron USA Incorporated
Project (A) (B)
4.000%, 07/01/97 700 700
----------
1,700
----------
- --------------------------------------------------------
DESCRIPTION PAR (000) VALUE (000)
- --------------------------------------------------------
MISSOURI -- 1.8%
Missouri State Environmental
Improvement & Energy
Pollution Control Revenue
Bond (A) (B)
3.950%, 12/01/97 $1,800 $ 1,800
Missouri State Health and
Educational Facilities Authority
Washington University
Series A (A) (B) (C)
4.100%, 07/01/97 400 400
----------
2,200
----------
MONTANA -- 0.3%
Forsyth, Montana Pollution
Control Revenue Bond Portland
General Electric Project (A) (B)
4.150%, 07/01/97 200 200
Forsyth, Montana Pollution Control
Revenue Bond, Series B Portland
General Electric Project (A) (B)
4.150%, 07/01/97 100 100
----------
300
----------
NEVADA -- 2.1%
Clark County, Nevada Industrial
Development Revenue
Series C (A) (B)
4.200%, 07/01/97 1,000 1,000
Nevada State Housing Division
Multi Unit Park,
Series A (A) (B)
4.250%, 07/01/97 1,500 1,500
----------
2,500
----------
NEW MEXICO -- 0.8%
Albuquerque, New Mexico Gross
Receipts Revenue Bond
(A) (B) (C)
4.200%, 07/02/97 1,000 1,000
----------
NEW YORK -- 1.6%
New York City, New York Municipal
Water Finance Authority Municipal
Water and Sewer Systems,
Series C FGIC (A) (B)
4.150%, 07/15/97 2,000 2,000
----------
NORTH CAROLINA -- 5.4%
Lexington, North Carolina
Lexington Memorial Hospital
Project (A) (B)
4.200%, 07/01/97 4,500 4,500
North Carolina Eastern
Municipal Power (A) (B)
8.000%, 01/01/98 1,305 1,357
Wake County, North Carolina
Carolina Power & Light
Company (A) (B)
4.150%, 07/02/97 800 800
----------
6,657
----------
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
84
<PAGE>
[SQUARE BULLET] COREFUND MONEY MARKET FUNDS
- --------------------------------------------------------
DESCRIPTION PAR (000) VALUE (000)
- --------------------------------------------------------
OREGON -- 0.3%
Port of St. Helens Portland,
Oregon Pollution Control
Revenue Bond (A) (B)
4.050%, 07/01/97 $ 400 $ 400
----------
PENNSYLVANIA -- 14.7%
Allegheny County, Pennsylvania
Hospital Development Revenue
Bond for Presbyterian University
Hospital Project, Series B1
(A) (B) (C)
4.200%, 07/01/97 290 290
Allegheny County, Pennsylvania
Hospital Development Revenue
Bond for Presbyterian University
Hospital Project, Series B3 (A) (B)
4.200%, 07/01/97 1,005 1,005
Beaver County, Pennsylvania
Industrial Development
Authority Revenue Bond for
Duquesne Light Company
Project, Series B (A) (B) (C)
4.050%, 07/01/97 100 100
Lehigh County, Pennsylvania
Industrial Development
Authority Pollution
Control (A) (B)
3.800%, 07/01/97 200 200
Montgomery County,
Pennsylvania TECP
3.850%, 08/21/97 1,200 1,200
3.600%, 07/10/97 2,300 2,300
3.650%, 07/28/97 2,000 2,000
Pennsylvania State Higher
Education Authority Carnegie
Mellon University,
Series D (A) (B)
4.150%, 07/01/97 700 700
Pennsylvania State Higher
Educational Facilities Authority
Hospital Revenue Bond for
Thomas Jefferson University
Project Pre-Refunded
@ 102 (D)
8.000%, 01/01/98 1,910 1,988
Pittsburgh, Pennsylvania Water
and Sewer Authority Revenue
Bond Series A FGIC
3.750%, 09/01/97 1,500 1,499
Temple University Pennsylvania GO
4.750%, 05/18/98 1,000 1,007
Washington County, Pennsylvania
Lease Revenue Bond
(A) (B) (C)
4.200%, 07/01/97 2,440 2,440
West Whiteland Township,
Pennsylvania GO
3.400%, 12/01/97 245 245
Wissahickon, Pennsylvania
School District GO
4.500%, 11/15/97 1,125 1,128
- --------------------------------------------------------
DESCRIPTION PAR (000) VALUE (000)
- --------------------------------------------------------
York, Pennsylvania General
Authority Revenue Bond (A) (B)
4.150%, 07/01/97 $2,000 $ 2,000
----------
18,102
----------
PUERTO RICO -- 1.6%
Puerto Rico Commonwealth
TRAN Series A
4.000%, 07/30/97 2,000 2,001
----------
SOUTH CAROLINA -- 2.5%
Berkley County, South Carolina
Pollution Control Revenue
Bond for Amoco Chemical
Project (A) (B) (C)
4.000%, 07/01/97 200 200
Richland County, South Carolina
Hospital Facilities Revenue
Bond Sunhealth-Orangeburg
Project, Series C-2 (A) (B)
4.450%, 07/02/97 450 450
York County, South Carolina
Pollution Control Revenue Bond
Electric Project, Series
NRU-84N-2 (A) (B)
4.200%, 07/02/97 400 400
York County, South Carolina
Pollution Control Revenue
for Saluda River Project
National Rural
3.500%, 08/15/97 2,000 2,000
----------
3,050
----------
TEXAS -- 17.4%
Camp County, Texas Industrial
Development Corporation
Pollution Control Revenue
Bond Texas Oil and Gas
Project (A) (B)
4.300%, 07/02/97 500 500
Grapevine, Texas Industrial
Development Authority
Revenue Bond for American
Airlines Project, Series B3
(A) (B) (C)
4.100%, 07/01/97 500 500
Grapevine, Texas Industrial
Development Authority
Revenue Bond American
Airlines Project, Series A2 (A) (B)
4.100%, 07/01/97 700 700
Grapevine, Texas Industrial
Development Corporation
American Airlines,
Series A1 (A) (B)
4.100%, 07/01/97 200 200
Grapevine, Texas Industrial
Development Corporation
Revenue Bond American
Airlines Project,
Series B2 (A) (B)
4.100%, 07/01/97 200 200
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
85
<PAGE>
STATEMENT
OF
NET ASSETS
AS OF
JUNE 30, 1997
TAX-FREE RESERVE (CONCLUDED)
- --------------------------------------------------------
DESCRIPTION PAR (000) VALUE (000)
- --------------------------------------------------------
Hunt County, Texas Industrial
Development Authority Trico
Industries Incorporated
Project (A) (B)
4.100%, 07/01/97 $1,600 $ 1,600
North Central Texas Health
Facilities Development Revenue
Bond Baylor Medical Center
Project, Series A, Pre-Refunded
@ 102 (D)
7.900%, 05/15/98 500 526
Nueces County, Texas Health
Facilities Authority Driscoll
Childrens Foundation (A) (B)
4.200%, 07/01/97 1,675 1,675
Port Corpus Christi Texas
Industrial Development
Corporation Refunding Revenue
Bonds Series A (A) (B)
4.200%, 07/01/97 2,000 2,000
Richardson Texas Independent
School District (A) (B)
3.620%, 09/04/97 3,000 3,000
San Antonio, Texas Electric and
Gas Revenue Bond
Pre-Refunded @ 102 (D)
7.800%, 02/01/98 3,900 4,071
Texas State Higher Education
Authority University and
College Improvement,
Series B FGIC (A) (B)
4.150%, 07/02/97 1,350 1,350
Texas State TAN
4.750%, 08/29/97 5,000 5,006
----------
21,328
----------
VERMONT -- 1.1%
Vermont State Student Loan
Assistance Corporation Student
Loan Revenue Bond (A) (B)
3.800%, 07/01/97 1,335 1,335
----------
VIRGINIA -- 7.5%
Chesapeake, Virginia TECP
3.700%, 07/24/97 1,000 1,000
Penn Ports Virginia TECP
3.800%, 08/07/97 1,500 1,500
Richmond, VA Housing Authority
Old Manchester Project
Series A (A) (B)
4.300%, 07/01/97 3,250 3,250
Virginia State Housing
Revenue Bonds
3.800%, 06/10/98 3,500 3,500
----------
9,250
----------
- --------------------------------------------------------
DESCRIPTION PAR (000) VALUE (000)
- --------------------------------------------------------
WEST VIRGINIA -- 0.5%
Putnam County, West Virginiarity
Industrial Development Authority
FMC Corporation Project (A) (B)
3.800%, 07/01/97 $ 200 $ 200
West Virginia State Hospital
Finance Authority Revenue
Bond Saint Mary's Hospital
Project (A) (B)
4.200%, 07/01/97 400 400
----------
600
----------
ISCONSIN -- 0.5%
Lac Du Flambeau, Wisconsin Lake
Superior Chippewa Indians
Special Obligation Simpson
Electric Project (A) (B)
4.150%, 07/01/97 600 600
----------
WYOMING -- 5.9%
Converse, Wyoming TECP
3.650%, 07/07/97 2,600 2,600
Gillette County Wyoming TECP
3.800%, 09/10/97 1,400 1,400
Lincoln County, Wyoming
Resource Recovery Revenue
Bond for Exxon Project,
Series C (A) (B) (C)
4.100%, 07/01/97 1,000 1,000
Platte County, Wyoming Pollution
Control Revenue Bond,
Series A (A) (B) (C)
4.200%, 07/01/97 1,400 1,400
Platte County, Wyoming Pollution
Control (A) (B)
4.200%, 07/01/97 500 500
Sublette County, Wyoming Exxon
Project, Series 84 (A) (B)
4.000%, 07/01/97 300 300
----------
7,200
----------
TOTAL MUNICIPAL BONDS
(Cost $126,198) 126,198
----------
TOTAL INVESTMENTS -- 102.8%
(Cost $126,198) 126,198
----------
OTHER ASSETS AND LIABILITIES,
NET -- (2.8%) (3,417)
----------
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
86
<PAGE>
[SQUARE BULLET] COREFUND MONEY MARKET FUNDS
- --------------------------------------------------------
DESCRIPTION VALUE (000)
- --------------------------------------------------------
NET ASSETS:
Portfolio Shares -- Class Y ($0.001 par
value -- 250 million authorized) based
on 119,607,821 outstanding shares $119,608
Portfolio Shares -- Class C ($0.001
par value -- 250 million authorized)
based on 3,203,258 outstanding shares 3,203
Accumulated Net Realized Loss
on Investments (54)
Undistributed Net Investment Income 24
----------
TOTAL NET ASSETS -- 100.0% $122,781
==========
NET ASSET VALUE AND REDEMPTION PRICE
PER SHARE -- CLASS Y $1.00
==========
NET ASSET VALUE AND REDEMPTION PRICE
PER SHARE -- CLASS C $1.00
==========
FGIC -- FINANCIAL GUARANTY INSURANCE COMPANY
GO --GENERAL OBLIGATION
MBIA -- MUNICIPAL BOND INVESTORS ASSURANCE
TAN -- TAX ANTICIPATION NOTE
TECP -- TAX EXEMPT COMMERCIAL PAPER
TRAN -- TAX AND REVENUE ANTICIPATION NOTE
(A) VARIABLE RATE SECURITIES--THE RATE REFLECTED ON THE STATEMENT OF THE NET
ASSETS IS THE RATE IN EFFECT ON JUNE 30, 1997.
(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.
(D) PRE-REFUNDED SECURITY -- THE MATURITY DATE SHOWN IS THE PRE-REFUNDED DATE.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
87
<PAGE>
STATEMENT
OF
OPERATIONS
(000)
FOR THE PERIOD
ENDED
JUNE 30, 1997
COREFUND EQUITY FUNDS [SQUARE BULLET] COREFUND
<TABLE>
<CAPTION>
---------- ----------- -----------
EQUITY CORE EQUITY GROWTH
INDEX FUND FUND(3) EQUITY FUND
---------- ----------- -----------
INVESTMENT INCOME
<S> <C> <C>
Dividends $ 3,973 $ 6,777 $ 1,346
Interest 37 763 371
Less: Foreign taxes withheld -- -- --
------- --------- -------
Total investment income 4,010 7,540 1,717
------- --------- -------
EXPENSES:
Investment advisory fees 800 3,459 1,024
Less: waiver of investment advisory fees (516) -- (20)
Administrative fees 500 1,169 341
Less: waiver of administrative fees (167) (260) (116)
Transfer agent fees & expenses 44 80 30
Custodian fees -- -- --
Professional fees 14 38 10
Registration & filing fees 25 17 12
12b-1 fees-- individual shares -- 32 10
Taxes--other than income 10 -- 5
Printing fees 29 55 18
Organizational costs -- -- --
Miscellaneous 15 23 4
------- --------- -------
Total expenses 754 4,613 1,318
------- --------- -------
NET INVESTMENT INCOME 3,256 2,927 399
------- --------- -------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS, FORWARD FOREIGN CURRENCY
CONTRACTS AND FOREIGN CURRENCY:
Net realized gain from security transactions 3,591 66,598 14,635
Net realized gain on forward foreign currency contracts and
foreign currency transactions -- -- --
Net unrealized depreciation on forward foreign currency contracts and
translation of assets and liabilities in foreign currencies -- -- --
Net change in unrealized appreciation on investments 55,389 67,597 12,411
------- --------- -------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $62,236 $137,122 $27,445
======= ========= =======
COMPUTATION OF NET ASSET VALUE AND OFFERING PRICE - JUNE 30, 1997:
CLASS Y
1Net asset value, offer and redemption price $ 37.39 $ 21.11 $15.43
======= ========= =======
CLASS A
1Net asset value, redemption price 37.37 21.13 15.39
Maximum sales charge of 5.50% 2.17 1.23 0.90
======= ========= =======
2Offering price $ 39.54 $ 22.36 $16.29
======= ========= =======
----------- ------------ --------
SPECIAL INTERNATIONAL BALANCED
EQUITY FUND GROWTH FUND FUND
----------- ------------ --------
INVESTMENT INCOME
<S> <C> <C> <C>
Dividends $ 527 $ 2,650 $ 1,027
Interest 161 225 3,006
Less: Foreign taxes withheld -- (196) --
-------- -------- -------
Total investment income 688 2,679 4,033
-------- -------- -------
EXPENSES:
Investment advisory fees 1,006 1,131 789
Less: waiver of investment advisory fees (609) -- (147)
Administrative fees 168 355 282
Less: waiver of administrative fees (49) (128) (97)
Transfer agent fees & expenses 12 28 19
Custodian fees 8 216 --
Professional fees 11 19 5
Registration & filing fees 7 13 5
12b-1 fees-- individual shares 4 5 9
Taxes--other than income 2 1 6
Printing fees 9 37 14
Organizational costs 2 -- 6
Miscellaneous (4) 33 3
-------- -------- -------
Total expenses 567 1,710 894
-------- -------- -------
NET INVESTMENT INCOME 121 969 3,139
-------- -------- -------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS, FORWARD FOREIGN CURRENCY
CONTRACTS AND FOREIGN CURRENCY:
Net realized gain from security transactions 7,793 3,611 7,717
Net realized gain on forward foreign currency contracts and
foreign currency transactions -- 1,679 --
Net unrealized depreciation on forward foreign currency contracts and
translation of assets and liabilities in foreign currencies -- (892) --
Net change in unrealized appreciation on investments 3,603 16,581 6,601
-------- -------- -------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $11,517 $21,948 $17,457
======== ======== =======
COMPUTATION OF NET ASSET VALUE AND OFFERING PRICE - JUNE 30, 1997:
CLASS Y
1Net asset value, offer and redemption price $11.27 $ 14.72 $ 13.52
======== ======== =======
CLASS A
1Net asset value, redemption price 11.25 14.70 13.52
Maximum sales charge of 5.50% 0.65 0.86 0.79
======== ======== =======
2Offering price $11.90 $ 15.56 $ 14.31
======== ======== =======
<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 5.50%.
3 THIS FUND WAS FORMERLY KNOWN AS THE EQUITY FUND.
</FN>
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
88 & 89
<PAGE>
STATEMENT
OF
OPERATIONS
(000)
FOR THE PERIOD
ENDED
JUNE 30, 1997
COREFUND FIXED INCOME FUNDS [SQUARE BULLET] COREFUND
<TABLE>
<CAPTION>
---------- ------------ ------------ ------
SHORT TERM SHORT-
INCOME INTERMEDIATE GOVERNMENT BOND
FUND BOND FUND INCOME FUND FUND
---------- ------------ ------------ ------
INVESTMENT INCOME
<S> <C> <C> <C> <C>
Interest $ 1,911 $10,913 $1,438 $13,350
------- ------- ------ -------
Total Investment income 1,911 10,913 1,438 13,350
------- ------- ------ -------
EXPENSES
Investment advisory fees 242 843 101 1,441
Less: waiver of investment advisory fees (160) (379) (14) (759)
Administrative fees 82 421 51 487
Less:waiver of administrative fees (29) (138) (17) (175)
Transfer agent fees & expenses 6 29 5 46
Custodian fees (3) -- -- (35)
Professional fees 5 14 2 47
Registration & filing fees 3 12 (5) 18
12b-1 fees-- individual shares -- 7 4 4
Taxes--other than income -- 10 7 2
Printing fees 3 16 2 18
Organizational costs 2 -- 6 --
Miscellaneous 3 4 3 11
------- ------- ------ -------
Total expenses 154 839 145 1,105
------- ------- ------ -------
NET INVESTMENT INCOME 1,757 10,074 1,293 12,245
------- ------- ------ -------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS, FORWARD FOREIGN
CURRENCY CONTRACTS AND FOREIGN CURRENCY:
Net realized (loss) gain from:
Security transactions (8) (26) (156) (735)
Option transactions -- -- -- --
Net realized gain on forward foreign currency contracts and
foreign currency transactions -- -- -- --
Net unrealized appreciation on forward foreign currency
contracts and translation of other assets and liabilities
in foreign currencies -- -- -- --
Net change in unrealized appreciation (depreciation)
on investments 91 993 434 2,749
------- ------- ------ -------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $1,840 $11,041 $1,571 $14,259
======= ======= ====== =======
COMPUTATION OF NET ASSET VALUE AND OFFERING PRICE - JUNE 30, 1997:
CLASS Y
1Net asset value, offer and redemption price $ 9.97 $ 9.83 $ 9.76 $10.24
======= ======= ====== =======
CLASS A
1Net asset value, redemption price 9.96 9.83 9.76 10.24
Maximum sales charge of 3.25% or 4.75% 0.33 0.33 0.33 0.51
------- ------- ------ -------
2Offering price $10.29 $ 10.16 $10.09 $10.75
======= ======= ====== =======
------ ------------ ------------ ----------
GLOBAL INTERMEDIATE PENNSYLVANIA NEW JERSEY
BOND MUNICIPAL MUNICIPAL MUNICIPAL
FUND BOND FUND BOND FUND BOND FUND
------ ------------ ------------ ----------
INVESTMENT INCOME
<S> <C> <C> <C> <C>
Interest $2,067 $ 83 $ 595 $ 85
------ ----- ------ ------
Total Investment income 2,067 83 595 85
------ ----- ------ ------
EXPENSES
Investment advisory fees 207 9 56 8
Less: waiver of investment advisory fees (32) (6) (56) (8)
Administrative fees 86 4 28 4
Less:waiver of administrative fees (31) (2) (28) (4)
Transfer agent fees & expenses 16 (1) 2 --
Custodian fees 8 -- -- --
Professional fees 4 -- 1 --
Registration & filing fees 4 (1) 2 --
12b-1 fees-- individual shares 1 2 3 1
Taxes--other than income -- -- 1 --
Printing fees 9 -- 1 --
Organizational costs 7 5 1 2
Miscellaneous 14 2 1 1
------ ----- ------ ------
Total expenses 293 12 12 4
------ ----- ------ ------
NET INVESTMENT INCOME 1,774 71 583 81
------ ----- ------ ------
NETREALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS, FORWARD FOREIGN
CURRENCY CONTRACTS AND FOREIGN CURRENCY:
Net realized (loss) gain from:
Security transactions 659 (6) 20 (3)
Option transactions (1,242) -- -- --
Net realized gain on forward foreign currency contracts and
foreign currency transactions 1,006 -- -- --
Net unrealized appreciation on forward foreign currency
contracts and translation of other assets and liabilities
in foreign currencies 138 -- -- --
Net change in unrealized appreciation (depreciation)
on investments (287) 25 240 24
------ ----- ------ ------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $2,048 $ 90 $ 843 $ 102
====== ===== ====== ======
COMPUTATION OF NET ASSET VALUE AND OFFERING PRICE - JUNE 30, 1997:
CLASS Y
1Net asset value, offer and redemption price $ 9.54 $10.05 $10.47 $10.16
====== ===== ====== ======
CLASS A
1Net asset value, redemption price 9.52 10.05 10.47 10.15
Maximum sales charge of 3.25% or 4.75% 0.47 0.34 0.52 0.51
------ ----- ------ ------
2Offering price $ 9.99 $10.39 $10.99 $10.66
====== ===== ====== ======
<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% FOR THE SHORT TERM INCOME,
SHORT-INTERMEDIATE BOND, GOVERNMENT INCOME AND INTERMEDIATE MUNICIPAL BOND
FUNDS AND 4.75% FOR THE BOND, GLOBAL BOND, PENNSYLVANIA MUNICIPAL BOND
AND NEW JERSEY MUNICIPAL BOND FUNDS.
</FN>
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
90 & 91
<PAGE>
STATEMENT
OF
OPERATIONS
(000)
FOR THE PERIOD
ENDED
JUNE 30, 1997
[SQUARE BULLET] COREFUND
COREFUND MONEY MARKET FUNDS
-------- ------- --------
TREASURY CASH TAX-FREE
RESERVE RESERVE RESERVE
-------- ------- --------
INVESTMENT INCOME:
Interest $48,486 $48,651 $4,415
------- ------- ------
Total investment income 48,486 48,651 4,415
------- ------- ------
EXPENSES:
Investment advisory fees 3,607 3,542 494
Less: waiver of investment advisory fees (994) (972) (136)
Administrative fees 2,255 2,214 309
Less: waiver of administrative fees (783) (768) (107)
Transfer agent fees & expenses 169 143 20
Professional fees 68 55 4
Registration & filing fees 37 75 7
12b-1 fees 37 57 8
Taxes--other than income 48 49 4
Printing 92 93 12
Miscellaneous 90 36 13
------- ------- ------
Total expenses 4,626 4,524 628
------- ------- ------
NET INVESTMENT INCOME 43,860 44,127 3,787
------- ------- ------
NET REALIZED GAIN
ON INVESTMENTS:
Net realized gain (loss) from security
transactions 8 1 (1)
------- ------- ------
NET INCREASE IN NET ASSETS RESULTING
FROM OPERATIONS $43,868 $44,128 $3,786
======= ======= ======
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
92
<PAGE>
[This page intentionally left blank.]
<PAGE>
STATEMENT
OF CHANGES
IN NET ASSETS
(000)
FOR THE PERIODS
ENDED
JUNE 30,
[SQUARE BULLET] COREFUND
COREFUND EQUITY FUNDS
<TABLE>
<CAPTION>
------------------ -------------------
EQUITY CORE EQUITY
INDEX FUND(3) FUND(4)
------------------ -------------------
1997 1996 1997 1996(1)
------ ------- ------- -------
OPERATIONS:
<S> <C> <C> <C> <C>
Net investment income $3,256 $ 2,673 $ 2,927 $ 3,058
Net realized gain on investments, forward foreign currency contracts
and foreign currency 3,591 4,702 66,598 43,129
Net unrealized appreciation on investments, forward foreign currency
contracts and translation of assets and liabilites in foreign currencies 55,389 23,222 67,597 23,229
-------- -------- -------- --------
Net increase in net assets resulting from operations 62,236 30,597 137,122 69,416
-------- -------- -------- --------
DIVIDENDS DISTRIBUTED FROM:
Net investment income:
Retail Class (a) -- -- -- (35)
Institutional Class (a) -- -- -- (2,133)
Class Y (b) (3,225) (2,677) (2,858) (1,001)
Class A (b) (28) -- (49) (21)
Net realized gains:
Retail Class (a) -- -- -- (1,150)
Institutional Class (a) -- -- -- (57,348)
Class Y (b) (1,484) (3,835) (35,253) --
Class A (b) (6) -- (977) --
-------- -------- -------- --------
Total dividends distributed (4,743) (6,512) (39,137) (61,688)
-------- -------- -------- --------
CAPITAL TRANSACTIONS (2):
Retail Class (a):
Exchanged for Class A Shares -- -- -- --
Proceeds from shares issued -- -- -- 1,033
Reinvestment of cash distributions -- -- -- 1,168
Cost of shares redeemed -- -- -- (674)
-------- -------- -------- --------
Increase (decrease) in net assets from Retail Class transactions -- -- -- 1,527
-------- -------- -------- --------
Institutional Class (a):
Exchanged for Class Y Shares -- -- -- --
Proceeds from shares issued -- -- -- 35,302
Reinvestment of cash distributions -- -- -- 58,151
Cost of shares redeemed -- -- -- (92,405)
-------- -------- -------- --------
Increase (decrease) in net assets from Institutional Class transactions -- -- -- 1,048
-------- -------- -------- --------
Class Y (b):
Proceeds from shares issued in merger (c) -- -- -- 34,310
Proceeds from shares issued 43,492 50,936 56,759 16,834
Reinvestment of cash distributions 4,960 6,064 38,110 --
Cost of shares redeemed (30,407) (27,288) (89,855) (23,221)
-------- -------- -------- --------
Increase in net assets from Class Y transactions 18,045 29,712 5,014 27,923
-------- -------- -------- --------
Class A (b):
Proceeds from shares issued in merger (c) -- -- -- 2,807
Proceeds from shares issued 4,101 -- 3,395 575
Reinvestment of cash distributions 34 -- 1,038 --
Cost of shares redeemed (103) -- (2,376) (549)
-------- -------- -------- --------
Increase (decrease) in net assets from Class A transactions 4,032 -- 2,057 2,833
-------- -------- -------- --------
Increase in net assets derived from capital share transactions 22,077 29,712 7,071 33,331
-------- -------- -------- --------
Net increase in net assets 79,570 53,797 105,056 41,059
-------- -------- -------- --------
NET ASSETS:
Beginning of period 166,350 112,553 426,002 384,943
-------- -------- -------- --------
End of period $245,920 $166,350 $531,058 $426,002
======== ======== ======== ========
----------------- ----------------
GROWTH SPECIAL
EQUITY FUND EQUITY FUND
----------------- ----------------
1997 1996 1997 1996(1)
------- ------ ------- ---------
OPERATIONS:
<S> <C> <C> <C> <C>
Net investment income $ 399 $ 695 $ 121 $ 378
Net realized gain on investments, forward foreign currency contracts
and foreign currency 14,635 10,837 7,793 9,147
Net unrealized appreciation (depreciation) on investments, forward foreign currency
contracts and translation of assets and liabilites in foreign currencies 12,411 17,962 3,603 2,372
-------- -------- ------- -------
Net increase in net assets resulting from operations 27,445 29,494 11,517 11,897
-------- -------- ------- -------
DIVIDENDS DISTRIBUTED FROM:
Net investment income:
Retail Class (a) -- -- -- --
Institutional Class (a) -- -- -- --
Class Y (b) (393) (691) (177) (388)
Class A (b) (3) (11) (2) (6)
Net realized gains:
Retail Class (a) -- -- -- --
Institutional Class (a) -- -- -- --
Class Y (b) (13,864) (2,808) (13,011) (8,564)
Class A (b) (404) (63) (307) (113)
-------- -------- ------- -------
Total dividends distributed (14,664) (3,573) (13,497) (9,071)
-------- -------- ------- -------
CAPITAL TRANSACTIONS (2):
Retail Class (a):
Exchanged for Class A Shares -- -- -- (984)
Proceeds from shares issued -- -- -- 166
Reinvestment of cash distributions -- -- -- 115
Cost of shares redeemed -- -- -- (29)
-------- -------- ------- -------
Increase (decrease) in net assets from Retail Class transactions -- -- -- (732)
-------- -------- ------- -------
Institutional Class (a):
Exchanged for Class Y Shares -- -- -- (58,929)
Proceeds from shares issued -- -- -- 6,660
Reinvestment of cash distributions -- -- -- 8,821
Cost of shares redeemed -- -- -- (12,704)
-------- -------- ------- -------
Increase (decrease) in net assets from Institutional Class transactions -- -- -- (56,152)
-------- -------- ------- -------
Class Y (b):
Proceeds from shares issued in merger (c) -- -- -- 58,929
Proceeds from shares issued 38,807 24,852 13,884 2,827
Reinvestment of cash distributions 12,752 3,081 13,074 --
Cost of shares redeemed (36,303) (24,528) (16,684) (2,083)
-------- -------- ------- -------
Increase in net assets from Class Y transactions 15,256 3,405 10,274 59,673
-------- -------- ------- -------
Class A (b):
Proceeds from shares issued in merger (c) -- -- -- 984
Proceeds from shares issued 1,712 980 1,020 98
Reinvestment of cash distributions 410 71 310 --
Cost of shares redeemed (1,001) (530) (121) (3)
-------- -------- ------- -------
Increase (decrease) in net assets from Class A transactions 1,121 521 1,209 1,079
-------- -------- ------- -------
Increase in net assets derived from capital share transactions 16,377 3,926 11,483 3,868
-------- -------- ------- -------
Net increase in net assets 29,158 29,847 9,503 6,694
-------- -------- ------- -------
NET ASSETS:
Beginning of period 123,235 93,388 64,824 58,130
-------- -------- ------- -------
End of period $152,393 $123,235 $74,327 $64,824
======== ======== ======= =======
----------------- -----------------
INTERNATIONAL BALANCED
GROWTH FUND FUND
----------------- -----------------
1997 1996 1997 1996
------- ------- ------- -------
OPERATIONS:
<S> <C> <C> <C> <C>
Net investment income $ 969 $ 1,286 $ 3,139 $ 2,183
Net realized gain on investments, forward foreign currency contracts
and foreign currency 5,290 11,844 7,717 4,822
Net unrealized appreciation (depreciation) on investments, forward foreign currency
contracts and translation of assets and liabilites in foreign currencies 15,689 5,712 6,601 6,379
-------- -------- -------- --------
Net increase in net assets resulting from operations 21,948 18,842 17,457 13,384
-------- -------- -------- --------
DIVIDENDS DISTRIBUTED FROM:
Net investment income:
Retail Class (a) -- -- -- --
Institutional Class (a) -- -- -- --
Class Y (b) (3,802) (2,440) (3,056) (2,108)
Class A (b) (53) (38) (92) (69)
Net realized gains:
Retail Class (a) -- -- -- --
Institutional Class (a) -- -- -- --
Class Y (b) (8,375) (548) (5,885) (840)
Class A (b) (130) (10) (184) (32)
-------- -------- -------- --------
Total dividends distributed (12,360) (3,036) (9,217) (3,049)
-------- -------- -------- --------
CAPITAL TRANSACTIONS (2):
Retail 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 (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 (b):
Proceeds from shares issued in merger (c) -- 16,130 -- 38,306
Proceeds from shares issued 34,899 17,623 23,565 17,797
Reinvestment of cash distributions 11,015 2,732 8,737 2,494
Cost of shares redeemed (31,528) (23,593) (29,150) (27,174)
-------- -------- -------- --------
Increase in net assets from Class Y transactions 14,386 12,892 3,152 31,423
-------- -------- -------- --------
Class A (b):
Proceeds from shares issued in merger (c) -- 59 -- 95
Proceeds from shares issued 489 421 1,285 678
Reinvestment of cash distributions 178 46 293 96
Cost of shares redeemed (506) (592) (833) (360)
-------- -------- -------- --------
Increase (decrease) in net assets from Class A transactions 161 (66) 745 509
-------- -------- -------- --------
Increase in net assets derived from capital share transactions 14,547 12,826 3,897 31,932
-------- -------- -------- --------
Net increase in net assets 24,135 28,632 12,137 42,267
-------- -------- -------- --------
NET ASSETS:
Beginning of period 141,413 112,781 105,703 63,436
-------- -------- -------- --------
End of period $165,548 $141,413 $117,840 $105,703
======== ======== ======== ========
<FN>
AMOUNTS DESIGNATED AS "--" ARE EITHER $0 OR HAVE BEEN ROUNDED TO $0.
(A) RETAIL AND INSTITUTIONAL CLASS AMOUNTS FOR THE YEAR ENDED JUNE 30, 1996
REPRESENT ACTIVITY OF THE ACQUIRED CONESTOGA FUND FROM NOVEMBER 1, 1995
THROUGH APRIL 14, 1996.
(B) ON APRIL 22, 1996 SERIES A SHARES WERE REDESIGNATED CLASS Y SHARES, AND
SERIES B SHARES WERE REDESIGNATED CLASS A SHARES.
(C) ON APRIL 15 & 22, 1996 THE CONESTOGA FUNDS WERE ACQUIRED BY COREFUNDS, INC.
(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) FOR CAPITAL SHARE TRANSACTIONS PLEASE SEE FOOTNOTE 8 IN THE NOTES TO THE
FINANCIAL STATEMENTS. (3) ON OCTOBER 9, 1996, THE EQUITY INDEX FUND CLASS A
SHARES COMMENCED OPERATIONS.
(4) THIS FUND WAS FORMERLY KNOWN AS THE EQUITY FUND.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
</FN>
</TABLE>
94 & 95
<PAGE>
STATEMENT
OF CHANGES
IN NET ASSETS
(000)
FOR THE PERIODS
ENDED
JUNE 30,
[SQUARE BULLET] COREFUND
COREFUND FIXED INCOME FUNDS
<TABLE>
<CAPTION>
------------------- ----------------- -----------------
SHORT-
SHORT TERM INTERMEDIATE GOVERNMENT
INCOME FUND BOND FUND INCOME FUND
------------------- ----------------- -----------------
1997 1996(1) 1997 1996 1997 1996
-------- -------- ------- ------- -------- ------
OPERATIONS:
<S> <C> <C> <C> <C> <C> <C>
Net investment income $ 1,757 $ 1,174 $10,074 $ 4,696 $ 1,293 $ 892
Net realized (loss) gain on investments, forward foreign
currency contracts and foreign currency (8) (81) (26) (987) (156) 31
Net unrealized appreciation (depreciation) on investments,
forward foreign currency contracts and translation of
assets and liabilites in foreign currencies 91 (170) 993 156 434 (414)
------- ------- -------- -------- ------- -------
Net increase in net assets resulting from operations 1,840 923 11,041 3,865 1,571 509
------- ------- -------- -------- ------- -------
DIVIDENDS DISTRIBUTED FROM:
Net investment income:
Class Y (b) (1,748) (1,238) (9,902) (4,567) (1,204) (812)
Class A (b) (9) -- (172) (123) (90) (78)
Net realized gains:
Retail Class (a) -- -- -- -- -- --
Institutional Class (a) -- (32) -- -- -- --
Class Y (b) -- -- -- -- -- --
Class A (b) -- -- -- -- -- --
------- ------- -------- -------- ------- -------
Total dividends distributed (1,757) (1,270) (10,074) (4,690) (1,294) (890)
------- ------- -------- -------- ------- -------
CAPITAL TRANSACTIONS (2):
Retail Class (a):
Exchanged for Class A Shares -- (1) -- -- -- --
Proceeds from shares issued -- -- -- -- -- --
Reinvestment of cash distributions -- -- -- -- -- --
Cost of shares redeemed -- (11) -- -- -- --
------- ------- -------- -------- ------- -------
Decrease in net assets from Retail Class transactions -- (12) -- -- -- --
------- ------- -------- -------- ------- -------
Institutional Class (a):
Exchanged for Class Y Shares -- (29,918) -- -- -- --
Proceeds from shares issued -- 5,788 -- -- -- --
Reinvestment of cash distributions -- 931 -- -- -- --
Cost of shares redeemed -- (12,577) -- -- -- --
------- ------- -------- -------- ------- -------
Decrease in net assets from Institutional
Class transactions -- (35,776) -- -- -- --
------- ------- -------- -------- ------- -------
Class Y (b):
Proceeds from shares issued in merger (c) -- 29,918 -- 113,422 -- --
Proceeds from shares issued 16,475 2,116 45,113 16,680 8,152 5,296
Reinvestment of cash distributions 1,808 203 9,516 3,735 612 412
Cost of shares redeemed (11,486) (2,040) (52,263) (28,327) (3,957) (2,718)
------- ------- -------- -------- ------- -------
Increase (decrease) in net assets from
Class Y transactions 6,797 30,197 2,366 105,510 4,807 2,990
------- ------- -------- -------- ------- -------
Class A (b):
Proceeds from shares issued in merger (c) -- 1 -- 1,207 -- --
Proceeds from shares issued 483 -- 391 282 579 157
Reinvestment of cash distributions 9 -- 143 85 85 70
Cost of shares redeemed (1) -- (865) (445) (311) (285)
------- ------- -------- -------- ------- -------
Increase (decrease) in net assets from
Class A transactions 491 1 (331) 1,129 353 (58)
------- ------- -------- -------- ------- -------
Increase (decrease) in net assets derived from capital
share transactions 7,288 (5,590) 2,035 106,639 5,160 2,932
------- ------- -------- -------- ------- -------
Net increase (decrease) in net assets 7,371 (5,937) 3,002 105,814 5,437 2,551
------- ------- -------- -------- ------- -------
NET ASSETS:
Beginning of period 30,133 36,070 162,903 57,089 15,230 12,679
------- ------- -------- -------- ------- -------
End of period $37,504 $30,133 $165,905 $162,903 $20,667 $15,230
======= ======= ======== ======== ======= =======
------------------ ----------------- ------------------
INTERMEDIATE
BOND GLOBAL MUNICIPAL
FUND BOND FUND BOND FUND
------------------ ----------------- ------------------
1997 1996(1) 1997 1996 1997 1996
-------- ------- -------- ------- -------- --------
OPERATIONS:
<S> <C> <C> <C> <C> <C> <C>
Net investment income $ 12,245 $ 8,196 $ 1,774 $ 1,851 $ 71 $ 46
Net realized (loss) gain on investments, forward foreign
currency contracts and foreign currency (735) (1,252) 423 1,197 (6) --
Net unrealized appreciation (depreciation) on investments,
forward foreign currency contracts and translation of
assets and liabilites in foreign currencies 2,749 (4,687) (149) (638) 25 13
-------- -------- ------- ------- ------ -------
Net increase in net assets resulting from operations 14,259 2,257 2,048 2,410 90 59
-------- -------- ------- ------- ------ -------
DIVIDENDS DISTRIBUTED FROM:
Net investment income:
Class Y (b) (12,161) (8,523) (2,621) (2,254) (34) (10)
Class A (b) (84) (56) (13) (11) (37) (35)
Net realized gains:
Retail Class (a) -- (10) -- -- -- --
Institutional Class (a) -- (1,458) -- -- -- --
Class Y (b) -- -- -- -- -- --
Class A (b) -- -- -- -- -- --
-------- -------- ------- ------- ------ -------
Total dividends distributed (12,245) (10,047) (2,634) (2,265) (71) (45)
-------- -------- ------- ------- ------ -------
CAPITAL TRANSACTIONS (2):
Retail Class (a):
Exchanged for Class A Shares -- (1,294) -- -- -- --
Proceeds from shares issued -- 122 -- -- -- --
Reinvestment of cash distributions -- 44 -- -- -- --
Cost of shares redeemed -- (198) -- -- -- --
-------- -------- ------- ------- ------ -------
Decrease in net assets from Retail Class transactions -- (1,326) -- -- -- --
-------- -------- ------- ------- ------ -------
Institutional Class (a):
Exchanged for Class Y Shares -- (194,533) -- -- -- --
Proceeds from shares issued -- 28,200 -- -- -- --
Reinvestment of cash distributions -- 7,057 -- -- -- --
Cost of shares redeemed -- (28,354) -- -- -- --
-------- -------- ------- ------- ------ -------
Decrease in net assets from Institutional
Class transactions -- (187,630) -- -- -- --
-------- -------- ------- ------- ------ -------
Class Y (b):
Proceeds from shares issued in merger (c) -- 194,533 -- -- -- --
Proceeds from shares issued 18,942 13,215 107 5,150 841 193
Reinvestment of cash distributions 12,215 1,409 2,670 1,604 12 8
Cost of shares redeemed (49,397) (9,632) (602) (797) (269) (167)
-------- -------- ------- ------- ------ -------
Increase (decrease) in net assets from
Class Y transactions (18,240) 199,525 2,175 5,957 584 34
-------- -------- ------- ------- ------ -------
Class A (b):
Proceeds from shares issued in merger (c) -- 1,294 -- -- -- --
Proceeds from shares issued 579 65 31 2 80 126
Reinvestment of cash distributions 78 13 15 10 37 31
Cost of shares redeemed (323) (88) (13) (32) (186) (179)
-------- -------- ------- ------- ------ -------
Increase (decrease) in net assets from
Class A transactions 334 1,284 33 (20) (69) (22)
-------- -------- ------- ------- ------ -------
Increase (decrease) in net assets derived from capital
share transactions (17,906) 11,853 2,208 5,937 515 12
-------- -------- ------- ------- ------ -------
Net increase (decrease) in net assets (15,892) 4,063 1,622 6,082 534 26
-------- -------- ------- ------- ------ -------
NET ASSETS:
Beginning of period 199,878 195,815 33,150 27,068 1,418 1,392
-------- -------- ------- ------- ------ -------
End of period $183,986 $199,878 $34,772 $33,150 $1,952 $ 1,418
======== ======== ======= ======= ====== =======
------------------ -------------------
PENNSYLVANIA NEW JERSEY
MUNICIPAL MUNICIPAL
BOND FUND BOND FUND
------------------ -------------------
1997 1996 1997 1996
-------- ------ --------- ------
OPERATIONS:
<S> <C> <C> <C> <C>
Net investment income $ 583 $ 234 $ 81 $ 77
Net realized (loss) gain on investments, forward foreign
currency contracts and foreign currency 20 (30) (3) 16
Net unrealized appreciation (depreciation) on investments,
forward foreign currency contracts and translation of
assets and liabilites in foreign currencies 240 36 24 (8)
------- ------- ------ -------
Net increase in net assets resulting from operations 843 240 102 85
------- ------- ------ -------
DIVIDENDS DISTRIBUTED FROM:
Net investment income:
Class Y (b) (521) (212) (65) (72)
Class A (b) (62) (21) (16) (5)
Net realized gains:
Retail Class (a) -- -- -- --
Institutional Class (a) -- -- -- --
Class Y (b) -- -- (8) (9)
Class A (b) -- -- (2) (1)
------- ------- ------ -------
Total dividends distributed (583) (233) (91) (87)
------- ------- ------ -------
CAPITAL TRANSACTIONS (2):
Retail Class (a):
Exchanged for Class A Shares -- -- -- --
Proceeds from shares issued -- -- -- --
Reinvestment of cash distributions -- -- -- --
Cost of shares redeemed -- -- -- --
------- ------- ------ -------
Decrease in net assets from Retail Class transactions -- -- -- --
------- ------- ------ -------
Institutional Class (a):
Exchanged for Class Y Shares -- -- -- --
Proceeds from shares issued -- -- -- --
Reinvestment of cash distributions -- -- -- --
Cost of shares redeemed -- -- -- --
------- ------- ------ -------
Decrease in net assets from Institutional
Class transactions -- -- -- --
------- ------- ------ -------
Class Y (b):
Proceeds from shares issued in merger (c) -- 5,703 -- --
Proceeds from shares issued 3,530 1,175 525 438
Reinvestment of cash distributions 297 134 14 39
Cost of shares redeemed (2,772) (397) (388) (625)
------- ------- ------ -------
Increase (decrease) in net assets from
Class Y transactions 1,055 6,615 151 (148)
------- ------- ------ -------
Class A (b):
Proceeds from shares issued in merger (c) -- 684 -- --
Proceeds from shares issued 1,341 124 99 196
Reinvestment of cash distributions 56 17 15 4
Cost of shares redeemed (420) (153) (22) (3)
------- ------- ------ -------
Increase (decrease) in net assets from
Class A transactions 977 672 92 197
------- ------- ------ -------
Increase (decrease) in net assets derived from capital
share transactions 2,032 7,287 243 49
------- ------- ------ -------
Net increase (decrease) in net assets 2,292 7,294 254 47
------- ------- ------ -------
NET ASSETS:
Beginning of period 9,883 2,589 1,621 1,574
------- ------- ------ -------
End of period $12,175 $ 9,883 $1,875 $ 1,621
======= ======= ====== =======
<FN>
AMOUNTS DESIGNATED AS "--" ARE EITHER $0 OR HAVE BEEN ROUNDED TO $0.
(A) RETAIL AND INSTITUTIONAL CLASS AMOUNTS REPRESENT ACTIVITY OF THE ACQUIRED
CONESTOGA FUND FROM NOVEMBER 1, 1995 THROUGH APRIL 21, 1996.
(B) ON APRIL 22, 1996 SERIES A SHARES WERE REDESIGNATED CLASS Y SHARES, AND
SERIES B SHARES WERE REDESIGNATED CLASS A SHARES.
(C) ON APRIL 15 & 22, 1996 THE CONESTOGA FUNDS WERE ACQUIRED BY COREFUNDS, INC.
(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) FOR CAPITAL SHARE TRANSACTIONS PLEASE SEE FOOTNOTE 8 IN THE NOTES TO THE
FINANCIAL STATEMENTS.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
</FN>
</TABLE>
96 & 97
<PAGE>
STATEMENT
OF CHANGES
IN NET ASSETS
(000)
FOR THE PERIODS
ENDED
JUNE 30
[SQUARE BULLET] COREFUND
COREFUND MONEY MARKET FUNDS
<TABLE>
<CAPTION>
-------------------- ---------------------- -------------------
TREASURY CASH TAX-FREE
RESERVE RESERVE RESERVE
-------------------- ---------------------- -------------------
1997 1996 1997 1996 1997 1996
-------- -------- ---------- -------- --------- --------
OPERATIONS:
<S> <C> <C> <C> <C> <C> <C>
Net investment income $ 43,860 $ 29,926 $ 44,127 $ 32,976 $ 3,787 $ 2,300
Net realized gain (loss) on securities
transactions 8 (4) 1 (2) (1) --
---------- ---------- ---------- ---------- -------- --------
Net increase in net assets resulting
from operations 43,868 29,922 44,128 32,974 3,786 2,300
---------- ---------- ---------- ---------- -------- --------
DIVIDENDS DISTRIBUTED FROM:
Net investment income:
Class Y (a) (43,173) (28,940) (43,042) (32,056) (3,677) (2,245)
Class C (a) (687) (986) (1,085) (920) (86) (55)
---------- ---------- ---------- ---------- -------- --------
Total dividends distributed (43,860) (29,926) (44,127) (32,976) (3,763) (2,300)
---------- ---------- ---------- ---------- -------- --------
CAPITAL SHARE TRANSACTIONS:
Class Y (a)
Proceeds from shares issued in merger (b) -- 397,193 -- 220,190 -- 51,375
Proceeds from shares issued 2,548,964 2,291,733 2,154,887 1,319,098 392,069 223,212
Reinvestment of cash distributions 4,246 5,323 3,136 3,471 229 216
Cost of shares redeemed (2,610,396) (2,280,888) (2,061,985) (1,262,885) (376,938) (233,363)
---------- ---------- ---------- ---------- -------- --------
(Decrease) increase in net assets
from Class Y (a) transactions (57,186) 413,361 96,038 279,874 15,360 41,440
---------- ---------- ---------- ---------- -------- --------
Class C (a)
Proceeds from shares issued in merger (b) -- 744 -- 2,038 -- 1,258
Proceeds from shares issued 12,429 32,271 44,890 34,793 3,779 2,753
Reinvestment of cash distributions 264 440 1,023 905 79 53
Cost of shares redeemed (19,933) (35,682) (37,956) (35,584) (3,506) (2,738)
---------- ---------- ---------- ---------- -------- --------
(Decrease) increase in net assets from
Class C transactions (7,240) (2,227) 7,957 2,152 352 1,326
---------- ---------- ---------- ---------- -------- --------
(Decrease) increase in net assets derived
from capital share transactions (64,426) 411,134 103,995 282,026 15,712 42,766
---------- ---------- ---------- ---------- -------- --------
Net (decrease) increase in net assets (64,418) 411,130 103,996 282,024 15,735 42,766
---------- ---------- ---------- ---------- -------- --------
NET ASSETS:
Beginning of period 911,948 500,818 809,948 527,924 107,046 64,280
---------- ---------- ---------- ---------- -------- --------
End of period $847,530 $ 911,948 $913,944 $ 809,948 $122,781 $107,046
========== ========== ========== ========== ======== ========
<FN>
(A) ON APRIL 22, 1996 SERIES A SHARES WERE REDESIGNATED CLASS Y AND SERIES B
SHARES WERE REDESIGNATED CLASS C.
(B) ON APRIL 15 & 22, THE CONESTOGA FUNDS WERE AQUIRED BY COREFUNDS INC.
</FN>
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
98
<PAGE>
[This page intentionally left blank.]
<PAGE>
FINANCIAL
HIGHLIGHTS
FOR THE PERIODS
ENDED
JUNE 30,
COREFUND EQUITY FUNDS
For a Share Outstanding Throughout the Period
<TABLE>
<CAPTION>
NET RATIO
NET ASSET REALIZED AND DISTRIBUTIONS DISTRIBUTIONS NET ASSETS RATIO OF NET
VALUE NET UNREALIZED FROM NET FROM ASSET VALUE END OF EXPENSES INCOME
BEGINNING INVESTMENT GAINS OR (LOSSES) INVESTMENT CAPITAL END TOTAL OF PERIOD TO AVERAGE TO AVERAGE
OF PERIOD INCOME ON SECURITIES INCOME GAINS OF PERIOD RETURN8 (000) NET ASSETS NET ASSETS
--------- ---------- ---------------- ------------- ------------- ----------- ------- --------- ----------- ----------
- -----------------
EQUITY INDEX FUND
- -----------------
CLASS Y**
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1997 $28.47 $0.51 $ 9.16 $(0.51) $(0.24) $37.39 34.44% $241,413 0.37% 1.63%
1996 23.79 0.51 5.47 (0.51) (0.79) 28.47 25.69 166,350 0.35 1.94
1995 20.54 0.52 4.24 (0.52) (0.99) 23.79 24.45 112,533 0.37 2.48
1994 20.97 0.55 (0.43) (0.55) -- 20.54 0.55 72,552 0.35 2.63
1993 19.22 0.52 1.84 (0.52) (0.09) 20.97 12.39 50,551 0.49 2.82
1992 18.46 0.52 1.80 (0.48) (1.08) 19.22 12.59 20,166 0.57 2.66
19911 19.48 0.03 (0.94) (0.02) (0.09) 18.46 (4.64)+ 12,117 0.97 1.79
CLASS A
199710 $29.62 $0.32 $ 8.05 $(0.38) $(0.24) $37.37 28.58%+ $4,507 0.37% 1.51%
- --------------------
CORE EQUITY FUND(9)
- --------------------
CLASS Y*
1997 $17.26 $0.12 $ 5.32 $(0.12) $(1.47) $21.11 33.10% $515,015 0.98% 0.63%
1996 17.07 0.14 1.49 (0.14) (1.30) 17.26 19.24 414,824 0.97 1.15
INSTITUTIONAL CLASS*
1995 15.00 0.19 2.87 (0.19) (0.80) 17.07 22.00 378,352 1.05 1.44
CLASS A*
1997 $17.28 $0.07 $ 5.32 $(0.07) $(1.47) $21.13 32.74% $16,043 1.23% 0.38%
1996 17.08 0.12 1.49 (0.11) (1.30) 17.28 19.11 11,178 1.22 0.89
RETAIL CLASS*
1995 15.00 0.18 2.87 (0.17) (0.80) 17.08 21.94 6,591 1.34 1.23
PRIOR CLASS
1994 $15.39 $0.11 $ 0.22 $(0.11) $(0.61) $15.00 2.21% $ 50,128 1.49% 0.75%
1993 13.93 0.14 1.89 (0.14) (0.43) 15.39 14.90 45,677 1.20 0.94
1992 13.08 0.19 1.02 (0.19) (0.17) 13.93 9.27 28,103 0.92 1.47
1991 8.95 0.26 4.13 (0.26) -- 13.08 49.37 12,830 0.54 2.30
19902 10.00 0.14 (1.05) (0.14) -- 8.95 (9.22) 5,982 0.65 2.29
- -------------------
GROWTH EQUITY FUND
- -------------------
CLASS Y**
1997 $14.19 $0.04 $ 2.81 $(0.04) $(1.57) $15.43 21.67% $147,700 0.96% 0.30%
1996 11.18 0.08 3.36 (0.08) (0.35) 14.19 31.36 120,073 0.89 0.64
1995 9.11 0.08 2.07 (0.08) -- 11.18 23.71 91,345 0.76 0.84
1994 9.95 0.05 (0.84) (0.05) -- 9.11 (8.01) 64,877 0.69 0.48
1993 8.74 0.08 1.21 (0.08) -- 9.95 14.76 63,777 0.43 0.85
19923 10.00 0.05 (1.26) (0.05) -- 8.74 (12.05)+ 33,418 0.14 1.38
CLASS A**
1997 $14.17 $0.01 $ 2.79 $(0.01) $(1.57) $15.39 21.29% $4,693 1.21% 0.04%
1996 11.17 0.05 3.35 (0.05) (0.35) 14.17 31.00 3,162 1.14 0.40
1995 9.10 0.06 2.07 (0.06) -- 11.17 23.44 2,043 1.01 0.59
1994 9.95 0.04 (0.85) (0.04) -- 9.10 (8.13) 1,73 0.94 0.23
19934 9.80 0.03 0.15 (0.03) -- 9.95 1.80+ 5,224 0.80 0.39
- -----------------------
SPECIAL EQUITY FUND(9)
- -----------------------
CLASS Y*
1997 $11.86 $0.02 $ 1.81 $(0.03) $(2.39) $11.27 17.94% $71,980 0.84% 0.19%
1996 11.42 0.07 2.13 (0.07) (1.69) 11.86 22.27 63,680 0.34 0.94
INSTITUTIONAL CLASS*
1995 9.37 0.12 2.12 (0.12) (0.07) 11.42 24.44 57,396 0.32 1.14
CLASS A*
1997 $11.85 $ -- $ 1.81 $(0.02) $(2.39) $11.25 17.73% $2,347 1.14% (0.12)%
1996 11.42 0.08 2.11 (0.07) (1.69) 11.85 22.14 1,144 0.37 0.91
RETAIL CLASS*
1995 9.37 0.12 2.12 (0.12) (0.07) 11.42 24.44 734 0.27 1.29
PRIOR CLASS
19945 $10.00 $0.06 $(0.63) $(0.06) $ -- $ 9.37 (5.72)% $ 10,069 0.15% 1.06%
RATIO RATIO OF NET
OF EXPENSES INCOME (LOSS)
TO AVERAGE TO AVERAGE
NET ASSETS NET ASSETS PORTFOLIO AVG.
(EXCLUDING (EXCLUDING TURNOVER COMM.
WAIVERS) WAIVERS) RATE*** RATE11
----------- ------------ --------- ------
- -----------------
EQUITY INDEX FUND
- -----------------
CLASS Y**
<S> <C> <C> <C> <C>
1997 0.71% 1.29% 11% $0.0545
1996 0.71 1.59 13 0.0641
1995 0.76 2.09 27 n/a
1994 0.75 2.23 13 n/a
1993 0.88 2.43 4 n/a
1992 1.06 2.17 27 n/a
19911 1.20 1.56 -- n/a
CLASS A
199710 0.69% 1.19% 11% $0.0545
- --------------------
CORE EQUITY FUND(9)
- --------------------
CLASS Y*
1997 1.03% 0.58% 79% $0.0512
1996 1.01 1.11 114 0.0636
INSTITUTIONAL CLASS*
1995 1.10 1.44 119 n/a
CLASS A*
1997 1.28% 0.33% 79% $0.0512
1996 1.26 0.85 114 0.0636
RETAIL CLASS*
1995 1.53 1.04 119 n/a
PRIOR CLASS
1994 1.51% 0.73% 35% n/a
1993 1.41 0.73 24 n/a
1992 1.23 1.17 39 n/a
1991 1.48 1.36 68 n/a
19902 1.59 1.35 43 n/a
- -------------------
GROWTH EQUITY FUND
- -------------------
CLASS Y**
1997 1.06% 0.20% 74% $0.0451
1996 1.05 0.48 81 0.0601
1995 1.10 0.50 113 n/a
1994 1.11 0.06 127 n/a
1993 1.11 0.17 103 n/a
19923 1.12 0.40 66 n/a
CLASS A**
1997 1.31% (0.06)% 74% $0.0451
1996 1.30 0.23 81 0.0601
1995 1.35 0.25 113 n/a
1994 1.36 (0.19) 127 n/a
19934 1.48 (0.29) 103 n/a
- -----------------------
SPECIAL EQUITY FUND(9)
- -----------------------
CLASS Y*
1997 1.82% (0.79)% 74% $0.0257
1996 1.79 (0.51) 72 0.0539
INSTITUTIONAL CLASS*
1995 1.97 (0.51) 129 n/a
CLASS A*
1997 2.07% (1.05)% 74% $0.0257
1996 1.82 (0.55) 72 0.0539
RETAIL CLASS*
1995 2.24 (0.68) 129 n/a
PRIOR CLASS
19945 2.10% (0.89)% 39% n/a
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
100
<PAGE>
[SQUARE BULLET] COREFUND
For a Share Outstanding Throughout the Period
<TABLE>
<CAPTION>
NET RATIO
NET ASSET REALIZED AND DISTRIBUTIONS DISTRIBUTIONS NET ASSETS RATIO OF NET
VALUE NET UNREALIZED FROM NET FROM ASSET VALUE END OF EXPENSES INCOME
BEGINNING INVESTMENT GAINS OR (LOSSES) INVESTMENT CAPITAL END TOTAL OF PERIOD TO AVERAGE TO AVERAGE
OF PERIOD INCOME ON SECURITIES INCOME GAINS OF PERIOD RETURN8 (000) NET ASSETS NET ASSETS
--------- ---------- ---------------- ------------- ------------- ----------- ------- --------- ----------- ----------
- --------------------------
INTERNATIONAL GROWTH FUND
- --------------------------
CLASS Y**
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1997 $13.97 $0.14 $ 1.84 $(0.37) $(0.86) $14.72 15.43% $163,117 1.20% 0.82%
1996 12.29 0.16 1.86 (0.28) (0.06) 13.97 16.72 139,275 1.14 1.05
1995 13.18 0.12 (0.17) (0.04) (0.80) 12.29 (0.21) 110,838 1.05 0.98
1994 11.71 0.12 1.78 (0.12) (0.31) 13.18 16.28 108,911 0.99 0.23
1993 10.52 0.10 1.16 (0.07) -- 11.71 12.06 61,655 0.99 1.22
1992 10.10 0.17 0.31 -- (0.06) 10.52 4.90 42,594 0.96 1.67
1991 10.75 0.19 (0.44) (0.27) (0.13) 10.10 (2.71) 20,582 0.99 1.80
19906 10.00 0.11 0.86 (0.09) (0.13) 10.75 9.74+ 13,513 1.22 2.57
CLASS A**
1997 $13.96 $0.09 $ 1.85 $(0.34) $(0.86) $14.70 15.09% $2,431 1.45% 0.57%
1996 12.27 0.11 1.89 (0.25) (0.06) 13.96 16.54 2,138 1.39 0.80
1995 13.17 0.09 (0.17) (0.02) (0.80) 12.27 (0.48) 1,943 1.30 0.73
1994 11.71 0.06 1.82 (0.11) (0.31) 13.17 16.08 2,019 1.24 0.05
19934 10.07 0.05 1.59 -- -- 11.71 16.29+ 344 1.15 1.51
- --------------
BALANCED FUND
- --------------
CLASS Y**
1997 $12.59 $0.36 $ 1.61 $(0.36) $(0.68) $13.52 16.44% $113,642 0.78% 2.79%
1996 11.06 0.33 1.68 (0.33) (0.15) 12.59 18.41 102,515 0.81 2.79
1995 9.88 0.35 1.21 (0.35) (0.03) 11.06 16.21 61,092 0.73 3.51
1994 10.39 0.35 (0.51) (0.35) -- 9.88 (1.62) 42,429 0.62 3.46
19934 10.00 0.16 0.39 (0.16) -- 10.39 5.52+ 29,434 0.45 3.38
CLASS A**
1997 $12.59 $0.32 $ 1.61 $(0.32) $(0.68) $13.52 16.15% $4,198 1.03% 2.54%
1996 11.06 0.30 1.68 (0.30) (0.15) 12.59 18.13 3,188 1.06 2.53
1995 9.89 0.34 1.19 (0.33) (0.03) 11.06 15.84 2,344 0.98% 3.27
1994 10.38 0.31 (0.49) (0.31) -- 9.89 (1.86) 2,222 0.87 3.21
19937 10.00 0.16 0.38 (0.16) -- 10.38 2.50+ 701 0.55 5.76
RATIO RATIO OF NET
OF EXPENSES INCOME (LOSS)
TO AVERAGE TO AVERAGE
NET ASSETS NET ASSETS PORTFOLIO AVG.
(EXCLUDING (EXCLUDING TURNOVER COMM.
WAIVERS) WAIVERS) RATE*** RATE11
----------- ------------ --------- ------
- --------------------------
INTERNATIONAL GROWTH FUND
- --------------------------
CLASS Y**
<S> <C> <C> <C> <C>
1997 1.29% 0.73% 59% $0.0080
1996 1.25 0.94 41 0.0270
1995 1.19 0.84 59 n/a
1994 1.18 0.04 67 n/a
1993 1.28 0.93 59 n/a
1992 1.40 1.23 87 n/a
1991 1.56 1.23 49 n/a
19906 1.99 1.80 20 n/a
CLASS A**
1997 1.54% 0.48% 59% $0.0080
1996 1.50 0.69 41 0.0270
1995 1.44 0.59 59 n/a
1994 1.43 (0.14) 67 n/a
19934 1.44 1.22 59 n/a
- --------------
BALANCED FUND
- --------------
CLASS Y**
1997 1.00% 2.57% 54% $0.0033
1996 1.03 2.57 74 0.0621
1995 1.07 3.17 46 n/a
1994 1.08 3.00 56 n/a
19934 1.39 2.45 21 n/a
CLASS A**
1997 1.25% 2.32% 54% $0.0033
1996 1.27 2.32 74 0.0621
1995 1.32 2.93 46 n/a
1994 1.33 2.75 56 n/a
19937 1.48 4.83 21 n/a
<FN>
AMOUNTS DESIGNATED AS "--" ARE EITHER $0 OR HAVE BEEN ROUNDED TO $0.
* ON FEBRUARY 21, 1995, THE SHARES OF THE FUNDS WERE REDESIGNED AS EITHER RETAIL OR INSTITUTIONAL SHARES. ON THAT DATE,
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. THE BASIS FOR THE ALLOCATION WAS THE RELATIVE NET ASSETS OF EACH CLASS OF
SHARES AS OF FEBRUARY 21, 1995. THE RESULTS WERE COMBINED WITH THE RESULTS OF OPERATIONS AND DISTRIBUTIONS FOR EACH
APPLICABLE CLASS FOR THE PERIOD FEBRUARY 21, 1995 THROUGH OCTOBER 31, 1995. 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 REFLECT THIS ALLOCATION. 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 SHARES OF THESE FUNDS WERE EXCHANGED FOR CLASS A SHARES.
** ON APRIL 22, 1996 THE SERIES A SHARES OF EACH FUND, EXCLUDING THE SPECIAL
EQUITY FUND, WERE REDESIGNATED CLASS Y AND THE SERIES B SHARES OF EACH FUND
WERE REDESIGNATED CLASS A.
***FOR THE YEAR ENDED JUNE 30, 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 CORE
EQUITY & SPECIAL EQUITY FUNDS FOR 1996 ARE FOR AN EIGHT MONTH PERIOD ENDED JUNE 30, 1997.
9 THE PER SHARE AMOUNT FOR THESE FUNDS FOR THE YEAR ENDED JUNE 30, 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 COMMENCED OPERATIONS ON OCTOBER 9, 1996. UNLESS OTHERWISE NOTED, ALL RATIOS FOR THE PERIOD HAVE BEEN ANNUALIZED.
11 AVERAGE COMMISSION RATE PAID PER SHARE FOR SECURITY PURCHASES AND SALES DURING
THE PERIOD. PRESENTATION OF THE RATE IS ONLY REQUIRED FOR FISCAL YEARS BEGINNING AFTER
SEPTEMBER 1, 1995.
</FN>
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
101
<PAGE>
FINANCIAL
HIGHLIGHTS
FOR THE PERIODS
ENDED
JUNE 30,
COREFUND FIXED INCOME FUNDS
For a Share Outstanding Throughout the Period
<TABLE>
<CAPTION>
NET RATIO
NET ASSET REALIZED AND DISTRIBUTIONS DISTRIBUTIONS NET ASSETS RATIO OF NET
VALUE NET UNREALIZED FROM NET FROM ASSET VALUE END OF EXPENSES INCOME
BEGINNING INVESTMENT GAINS 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
- -------------------------
CLASS Y*
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1997 $ 9.94 $0.53 $ 0.03 $(0.53) $ -- $ 9.97 5.82% $ 37,011 0.47% 5.37%
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*
1997 $ 9.93 $0.51 $ 0.03 $(0.51) $ -- $ 9.96 5.59%$ 493 0.73% 5.18%
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**
1997 $ 9.76 $0.59 $ 0.07 $(0.59) $ -- $ 9.83 6.90% $163,153 0.49% 5.98%
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**
1997 $ 9.76 $0.56 $ 0.07 $(0.56) $ -- $ 9.83 6.64%$ 2,752 0.74% 5.73%
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**
1997 $ 9.62 $0.62 $ 0.14 $(0.62) $ -- $ 9.76 8.15% $ 19,007 0.70% 6.40%
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**
1997 $ 9.62 $0.60 $ 0.14 $(0.60) $ -- $ 9.76 7.88% $ 1,660 0.95% 6.15%
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
19938 10.00 0.07 0.17 (0.07) -- 10.17 1.71+ 201 0.63 5.35
- -------------
BOND FUND11
- -------------
CLASS Y*
1997 $10.15 $0.64 $ 0.09 $(0.64) $ -- $10.24 7.43% $182,364 0.56% 6.29%
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*
1997 $10.15 $0.62 $ 0.09 $(0.62) $ -- $10.24 7.15%$ 1,622 0.81% 6.05%
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
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
- -------------------------
CLASS Y*
<S> <C> <C> <C>
1997 1.05% 4.79% 99%
1996 1.03 4.79 102
INSTITUTIONAL CLASS*
19951 1.08 4.98 40
CLASS A*
1997 1.32% 4.59% 99%
1996 1.25 4.56 102
RETAIL CLASS*
19952 1.33 4.60 40
- ------------------------------
SHORT-INTERMEDIATE BOND FUND
- ------------------------------
CLASS Y*
1997 0.80% 5.67% 158%
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**
1997 1.05% 5.42% 158%
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*
1997 0.85% 6.25% 120%
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**
1997 1.10% 6.00% 120%
1996 1.14 5.67 131
1995 1.24 5.86 368
1994 1.25 4.18 157
19938 1.29 4.69 93
- -------------
BOND FUND11
- -------------
CLASS Y*
1997 1.04% 5.81% 210%
1996 0.97 5.86 190
INSTITUTIONAL CLASS*
1995 1.12 5.68 352
CLASS A*
1997 1.29% 5.57% 210%
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>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
102
<PAGE>
[SQUARE BULLET] COREFUND
For a Share Outstanding Throughout the Period
<TABLE>
<CAPTION>
NET RATIO
NET ASSET REALIZED AND DISTRIBUTIONS DISTRIBUTIONS NET ASSETS RATIO OF NET
VALUE NET UNREALIZED FROM NET FROM ASSET VALUE END OF EXPENSES INCOME
BEGINNING INVESTMENT GAINS 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
- -----------------
CLASS Y**
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1997 $ 9.70 $0.49 $ 0.09 $(0.74) $ -- $ 9.54 6.18% $ 34,590 0.85% 5.14%
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**
1997 $ 9.68 $0.42 $ 0.14 $(0.72) $ -- $ 9.52 5.92% $ 182 1.10% 4.89%
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**
1997 $ 9.92 $0.42 $ 0.13 $(0.42) $ -- $10.05 5.62% $ 993 0.55% 4.20%
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**
1997 $ 9.92 $0.39 $ 0.13 $(0.39) $ -- $10.05 5.36% $ 959 0.80% 3.92%
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
19938 10.00 0.03 0.08 (0.03) -- 10.08 1.19+ 166 0.81 2.51
- ---------------------------------
PENNSYLVANIA MUNICIPAL BOND FUND
- ---------------------------------
CLASS Y**
1997 $10.22 $0.54 $ 0.25 $(0.54) $ -- $10.47 7.92% $ 10,171 0.08% 5.23%
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**
1997 $10.22 $0.51 $ 0.25 $(0.51) $ -- $10.47 7.65% $ 2,004 0.33% 4.99%
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**
1997 $10.08 $0.51 $ 0.15 $(0.51) $(0.07) $10.16 6.70% $ 1,477 0.21% 5.02%
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**
1997 $10.07 $0.48 $ 0.15 $(0.48) $(0.07) $10.15 6.44%$ 398 0.45% 4.81%
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
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
- -----------------
CLASS Y**
<S> <C> <C> <C>
1997 1.03% 4.96% 90%
1996 0.95 5.57 67
1995 1.03 6.45 133
19947 1.12 4.65 161
CLASS A**
1997 1.28% 4.71% 90%
1996 1.20 5.32 67
1995 1.28 6.20 133
19947 1.37 4.40 161
- ----------------------------------
INTERMEDIATE MUNICIPAL BOND FUND
- ----------------------------------
CLASS Y**
1997 1.02% 3.73% 22%
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**
1997 1.23% 3.49% 22%
1996 1.61 2.94 10
1995 1.52 3.21 9
1994 1.42 3.12 43
19938 1.68 1.64 10
- ---------------------------------
PENNSYLVANIA MUNICIPAL BOND FUND
- ---------------------------------
CLASS Y**
1997 0.83% 4.48% 39%
1996 0.96 4.50 92
1995 1.14 4.51 18
19949 1.17 4.34 3
CLASS A**
1997 1.08% 4.24% 39%
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**
1997 0.96% 4.27% 19%
1996 1.12 4.18 21
1995 1.17 4.46 32
19949 1.35 4.15 13
CLASS A**
1997 1.20% 4.06% 19%
1996 1.35 3.90 21
1995 1.44 4.21 32
19949 1.60 3.90 13
<FN>
AMOUNTS DESIGNATED AS "--" ARE EITHER $0 OR HAVE BEEN ROUNDED TO $0.
*ON FEBRUARY 21, 1995, THE SHARES OF THE FUNDS WERE REDESIGNED AS EITHER
RETAIL OR INSTITUTIONAL SHARES. ON THAT DATE, 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. THE BASIS FOR THE
ALLOCATION WAS THE RELATIVE NET ASSETS OF EACH CLASS OF SHARES AS OF FEBRUARY
21, 1995. THE RESULTS WERE COMBINED WITH THE RESULTS OF OPERATIONS AND
DISTRIBUTIONS FOR EACH APPLICABLE CLASS FOR THE PERIOD FEBRUARY 21, 1995
THROUGH OCTOBER 31, 1995. 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 REFLECT THIS ALLOCATION.
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
SHARES 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 THE YEAR ENDED JUNE 30, 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 DECEMBER 31,
1996.
11 THE PER SHARE AMOUNT FOR THESE FUNDS FOR THE YEAR ENDED JUNE 30, 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.
103
<PAGE>
FINANCIAL
HIGHLIGHTS
FOR THE PERIODS
ENDED
JUNE 30,
[SQUARE BULLET] COREFUND
COREFUND MONEY MARKET FUNDS
For a Share Outstanding Throughout the Period
<TABLE>
<CAPTION>
RATIO RATIO OF
NET RATIO OF EXPENSES NET INCOME
NET 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
- ----------------
CLASS Y*
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1997 $1.00 $0.05 $(0.05) $1.00 4.97% $835,384 0.51% 4.86% 0.71% 4.66%
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*
1997 $1.00 $0.05 $(0.05) $1.00 4.71% $ 12,146 0.76% 4.61% 0.96% 4.41%
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*
1997 $1.00 $0.05 $(0.05) $1.00 5.09% $886,251 0.50% 4.99% 0.70% 4.79%
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*
1997 $1.00 $0.05 $(0.05) $1.00 4.83% $ 27,693 0.75% 4.74% 0.95% 4.54%
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*
1997 $1.00 $0.03 $(0.03) $1.00 3.08% $119,579 0.50% 3.07% 0.70% 2.87%
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*
1997 $1.00 $0.03 $(0.03) $1.00 2.83% $ 3,202 0.75% 2.82% 0.95% 2.62%
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.
104
<PAGE>
NOTES TO
FINANCIAL
STATEMENTS
AS OF
JUNE 30, 1997
[SQUARE BULLET] COREFUND
1. ORGANIZATION
The CoreFund Equity Index Fund, Core 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, Global Bond Fund, Intermediate Municipal Bond Fund,
Pennsylvania Municipal Bond Fund, New Jersey Municipal Bond Fund (the Fixed
Income Funds), Treasury Reserve, Cash 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 offers 20 separate portfolios
(the Funds):
EQUITY PORTFOLIOS: MONEY MARKET PORTFOLIOS:
Equity Index Fund Treasury Reserve
Core Equity Fund Cash Reserve
Growth Equity Fund Tax-Free Reserve
Special Equity Fund Elite Cash Reserve
International Growth Fund Elite Treasury Reserve
Balanced Fund Elite Tax-Free Reserve
FIXED INCOME PORTFOLIOS:
Short Term Income Fund
Short-Intermediate Bond Fund
Government Income Fund
Bond Fund
Global Bond Fund
Intermediate Municipal Bond Fund
Pennsylvania Municipal Bond Fund
New Jersey Municipal Bond Fund
The financial statements of the Elite Cash Reserve, Elite Treasury Reserve
and Elite 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 that 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, purchase
discounts 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:
[BULLET] market value of investment securities, assets and liabilities
at the current rate of exchange; and
[BULLET] 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 that is due to changes in the foreign
exchange rates from that which is due to changes in market prices of equity
securities.
The Global Bond Fund does isolate the effect of fluctuations in foreign
currency rates when determining the gain or loss upon sale or maturity of
foreign currency denominated debt obligations for Federal income tax purposes.
105
<PAGE>
NOTES TO
FINANCIAL
STATEMENTS
(CONTINUED)
AS OF
JUNE 30, 1997
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.
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 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 an 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 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 collateral by
the Portfolio may be delayed or limited.
EXPENSES--Expenses that are directly related to one of the Funds are
charged directly to that Fund. Other operating expenses of the Company are
pro-rated to the Funds 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 Fund are
allocated to the respective class on the basis of the relative net asset value
each day.
DISTRIBUTION TO SHAREHOLDERS--The Equity Index Fund, Core Equity Fund,
Growth Equity Fund, Special Equity Fund, Balanced Fund and Global Bond Fund
declare and pay dividends on a quarterly basis. The International Growth Fund
declares and pays dividends periodically. 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 Fund 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, for the International Growth Fund, $413,000 was reclassified
from accumulated net realized gain on investments to accumulated net investment
income. In addition, the following permanent differences primarily attributable
to realized foreign exchange gains and losses, have been relassified from
accumulated net realized gain (loss) on foreign currency transactions to
accumulated net investment income:
(000)
-----
INTERNATIONAL GROWTH FUND $1,679
GLOBAL BOND FUND 1,006
FEDERAL INCOME TAXES--It is each 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 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.
106
<PAGE>
[SQUARE BULLET] COREFUND
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> <C>
Equity Index 0.40% March 25, 1991 Short Term Income 0.74% April 12, 1996
Core 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
Bond 0.50 March 25, 1991
Treasury Reserve 0.40 April 12, 1996 Pennsylvania Municipal
Cash Reserve 0.40 April 12, 1996 Bond 0.50 May 15, 1994
Tax-Free Reserve 0.40 April 12, 1996 New Jersey Municipal
Bond 0.50 May 15, 1994
</TABLE>
Advisory fees are computed daily and paid monthly for all Funds.
Additionally, for the year ended June 30, 1997, 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. Under the Custodian
Agreement, CoreStates Bank holds each Fund's securities and cash items, makes
receipts and disbursements of money on behalf of each Fund, collects and
receives all income and other payments and distributions on account of the
Funds' securities and performs other related services. CoreStates Bank may, in
its discretion and at its own expense, open and maintain a sub-custody account
or employ a sub-custodian on behalf of the Funds investing exclusively in the
United States and may, with the Funds' Board approval and at the expense of the
Funds, employ sub-custodians on behalf of the Funds who invest in foreign
countries provided that CoreStates Bank shall remain liable for the performance
of all of its duties under the Custodian Agreement.
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 Fund'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 Funds. SFR voluntarily waives a portion of
their fees in order to assist the Funds in maintaining competitive expense
ratios.
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 Funds' Transfer Agent. As such, BFDS provides
transfer agency, dividend disbursing and shareholder servicing for the Funds.
On November 2, 1992, SEI Financial Services ("SFS"), a wholly owned
subsidiary of SEI, became the Funds' exclusive Distributor pursuant to a
distribution agreement dated October 30, 1992.
The Company has adopted a Distribution Plan (the Plan) for those Funds
offering Class A and C 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 that enter into
shareholder servicing agreements or broker agreements with the Distributor. The
Funds paid approximately $2,071,000 to affiliated brokers 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 Funds.
The Funds have paid legal fees in the amount of $187,000 to a law firm in
which the Secretary of the Company is a partner.
107
<PAGE>
NOTES TO
FINANCIAL
STATEMENTS
(CONTINUED)
AS OF
JUNE 30, 1997
5. INVESTMENT TRANSACTIONS
During the year ended June 30, 1997, 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>
Equity Index Fund $ -- $ 41,562 $ 41,562 $ -- $ 21,792 $ 21,792
Core Equity Fund -- 360,782 360,782 -- 377,058 377,058
Growth Equity Fund -- 99,072 99,072 -- 95,849 95,849
Special Equity Fund -- 47,567 47,567 -- 47,793 47,793
International Growth Fund -- 93,823 93,823 -- 80,367 80,367
Balanced Fund 17,498 37,932 55,430 6,264 51,482 57,746
Short Term Income Fund 18,275 11,227 29,502 18,994 7,177 26,171
Short-Intermediate Bond Fund 169,942 73,534 243,476 160,267 83,151 243,418
Government Income Fund 26,799 -- 26,799 23,101 -- 23,101
Bond Fund 289,125 99,353 388,478 286,710 112,502 399,212
Global Bond Fund -- 24,856 24,856 -- 30,685 30,685
Intermediate Municipal Fund -- 942 942 -- 365 365
Pennsylvania Municipal Bond Fund -- 6,182 6,182 -- 4,110 4,110
New Jersey Municipal Bond Fund -- 867 867 -- 287 287
- ---------------------------------------------------------------------------------------------------------------
</TABLE>
Certain net capital losses incurred subsequent to October 31, 1996 have
been deferred for tax purposes and will be recognized during the fiscal year
ended June 30, 1998. The Funds had capital loss carryforwards at June 30, 1997,
as follows:
<TABLE>
<CAPTION>
CAPITAL LOSS
CARRYOVER EXPIRES EXPIRES EXPIRES EXPIRES
6/30/97 2002 2003 2004 2005
------------- ---------- ------------- ---------- -----------
<S> <C> <C> <C> <C> <C>
Short Term Income Fund $ 88,520 $ -- $ -- $ -- $ 88,520
Short-Intermediate Bond Fund 2,907,103 -- 1,483,436 217,497 1,206,170
Government Income Fund 319,174 -- 222,660 4,127 92,387
Bond Fund 1,702,115 -- -- -- 1,702,115
Global Bond Fund 1,573,551 -- 844,493 -- 729,058
Intermediate Term Municipal Bond Fund 79,158 -- 41,918 34,827 2,413
Pennsylvania Municipal Bond Fund 96,691 73,679 95 8,784 14,133
Treasury Reserve 9,082 -- -- -- 9,082
Cash Reserve 167,012 134,628 23,362 9,022 --
Tax-Free Reserve 54,381 5,273 44,981 4,127 --
- -------------------------------------------------------------------------------------------------------------
</TABLE>
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.
At June 30, 1997 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, 1997 for each fund 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>
Equity Index Fund $100,868 $(2,365) $98,503
Core Equity Fund 125,274 (13,875) 111,399
Growth Equity Fund 46,345 (1,369) 44,976
Special Equity Fund 16,602 (10,082) 6,520
International Growth Fund 32,813 (4,297) 28,516
Balanced Fund 20,203 (1,004) 19,199
Short Term Income Fund 40 (27) 13
Short-Intermediate Bond Fund 794 (497) 297
Government Income Fund 191 (141) 50
Bond Fund 1,253 (618) 635
Global Bond Fund 119 (356) (237)
Intermediate Municipal Fund 22 (1) 21
Pennsylvania Municipal Bond Fund 278 (20) 258
New Jersey Municipal Bond Fund 48 (1) 47
- ----------------------------------------------------------------------------------------------------------------
</TABLE>
108
<PAGE>
[SQUARE BULLET] COREFUND
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, 1997:
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------
GLOBAL BOND FUND:
Foreign Currency Sales:
Unrealized
Contracts to In Exchange Appreciation/
Deliver/Receive For (Depreciation)
--------------- ----------- --------------
<S> <C> <C> <C>
7/23/97 DM 9,450,000 $5,471,917 $ 45,959
7/23-9/23/97 DK 17,000,000 2,640,875 75,155
9/12/97 GP 3,030,000 5,000,864 3,373
9/23/97 SK 13,376,000 1,742,347 7,518
----------
Net Unrealized Appreciation $ 132,005
==========
- ---------------------------------------------------------------------------------------------------------------
</TABLE>
CURRENCY LEGEND
DM German Marks
DK Danish Kroner
GP British Pounds
SK Swedish Krona
At June 30, 1997, the CoreFund Global Bond Fund had unrealized gains on closed
but unsettled forward foreign currency contracts of $83,006 scheduled to settle
between July 23, 1997 and September 12, 1997.
109
<PAGE>
NOTES TO
FINANCIAL
STATEMENTS
(CONTINUED)
AS OF
JUNE 30, 1997
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 that
include revenue bonds, tax exempt commercial paper, tax and revenue anticipation
notes, and general obligation bonds. At June 30, 1997, 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
------------ ------------ ---------- --------
REVENUE BONDS:
<S> <C> <C> <C> <C>
Education Bonds 10.9% 25.1% 21.1% 8.9%
Health Care Bonds 6.8 11.1 9.4 8.3
Transportation Bonds 11.2 6.6 2.8 4.4
Utility Bonds 14.8 10.1 10.3 6.6
Housing Bonds -- 3.5 -- 6.5
Pollution Control Bonds -- -- -- 10.4
Industrial Bonds 5.3 15.4 -- 7.8
Public Facility Bonds -- 1.3 2.9 1.6
Resource Recovery Bonds -- -- -- 0.8
Other 18.3 1.6 6.6 11.7
GENERAL OBLIGATIONS 32.7 25.3 46.9 3.5
TAX EXEMPT COMMERCIAL PAPER -- -- -- 23.9
TAX AND REVENUE ANTICIPATION NOTES -- -- -- 1.6
TAX ANTICIPATION NOTES -- -- -- 4.0
------ ------ ------ ------
100.0% 100.0% 100.0% 100.0%
- ---------------------------------------------------------------------------------------------------------------
</TABLE>
The rating of long-term debt as a percentage of total value of investments
at June 30, 1997 is as follows:
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------
---------- ------------ ---------- ------ ------ ------------ ------------ ----------
SHORT- PENNSYLVANIA NEW JERSEY
SHORT TERM INTERMEDIATE GOVERNMENT GLOBAL INTERMEDIATE MUNICIPAL MUNICIPAL
INCOME BOND INCOME BOND BOND MUNICIPAL BOND BOND
FUND FUND FUND FUND FUND FUND FUND FUND
---------- ------------ ---------- ------ ------ ------------ ------------ ----------
STANDARD & POORS RATINGS:
<S> <C> <C> <C> <C> <C> <C> <C> <C>
AAA 56% 71% 98% 77% 84% 68% 65% 37%
AA+ -- -- -- -- 10 3 -- --
AA 3 -- -- -- 5 16 11 18
AA- 1 2 -- 1 -- 3 8 9
A+ 13 4 -- 3 -- 3 3 --
A 3 5 -- 3 -- -- 2 --
A- 3 2 -- 1 -- -- 1 --
BBB+ -- 1 -- 4 -- -- -- --
BBB 5 4 -- 2 -- -- -- --
BBB- 5 4 -- 4 -- -- -- --
BB+ -- 1 -- -- -- -- -- --
BB -- 1 -- -- -- -- -- --
NR 11 5 2 5 1 7 10 36
----- ----- ----- ----- ------ ------ ------ ------
100% 100% 100% 100% 100% 100% 100% 100%
- --------------------------------------------------------------------------------------------------------------------
</TABLE>
110
<PAGE>
[SQUARE BULLET] COREFUND
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, 1997, the percentage of securities with credit
enhancements are as follows:
- ----------------------------------------------------------------------------
------- ----------
LETTERS
OF BOND
CREDIT INSURANCE
------- ----------
Intermediate Municipal Bond Fund --% 66.3%
Pennsylvania Municipal Bond Fund -- 51.4
New Jersey Municipal Bond Fund 3.7 19.5
Tax-Free Reserve 54.2 37.8
- ----------------------------------------------------------------------------
8. SHARE TRANSACTIONS (000):
The following are the share transactions for the year ended June 30, 1997.
<TABLE>
<CAPTION>
------ ------- ------- ------- ------------- -------- -------- ------- --------
EQUITY CORE GROWTH SPECIAL INTERNATIONAL
INDEX EQUITY EQUITY EQUITY GROWTH BALANCED TREASURY CASH TAX-FREE
FUND FUND(1) FUND FUND FUND FUND RESERVE RESERVE RESERVE
------ ------- ------ ------- ------------- -------- -------- ------- --------
CLASS Y
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Shares issued 1,368 3,083 2,709 1,267 2,555 1,854 2,548,964 2,154,887 392,069
Shares issued in lieu
of cash distributions 158 2,104 937 1,299 840 694 4,246 3,136 229
Shares redeemed (913) (4,824) (2,533) (1,549) (2,276) (2,286) (2,610,396) (2,061,985) (376,938)
----- ------ ------ ------ ------ ------ ---------- ---------- --------
Net increase (decrease) 613 363 1,113 1,017 1,119 262 (57,186) 96,038 15,360
===== ====== ====== ====== ====== ====== ========== ========== ========
CLASS A/C
Shares issued 123 181 120 92 35 100 12,429 44,890 3,779
Shares issued in lieu
of cash distributions 1 57 30 31 14 23 264 1,023 79
Shares redeemed (3) (126) (68) (11) (37) (66) (19,933) (37,956) (3,506)
----- ------ ------ ------ ------ ------ ---------- ---------- --------
Net increase (decrease) 121 112 82 112 12 57 (7,240) 7,957 352
===== ====== ====== ====== ====== ====== ========== ========== ========
TOTAL SHARE ACTIVITY
FOR PERIOD 734 475 1,195 1,129 1,131 319 (64,426) 103,995 15,712
===== ====== ====== ====== ====== ====== ========== ========== ========
<FN>
(1) THIS FUND WAS FORMERLY KNOWN AS THE EQUITY FUND. AMOUNTS DESIGNATED AS "--"
ARE EITHER $0 OR HAVE BEEN ROUNDED TO $0.
</FN>
</TABLE>
111
<PAGE>
NOTES TO
FINANCIAL
STATEMENTS
(CONTINUED)
AS OF
JUNE 30, 1997
8. SHARE TRANSACTIONS (000): -- CONTINUED
<TABLE>
<CAPTION>
---------- ------------ ---------- ----- ------- ------------ ------------ ----------
SHORT TERM SHORT- GOVERNMENT GLOBAL INTERMEDIATE PENNSYLVANIA NEW JERSEY
INCOME INTERMEDIATE INCOME BOND BOND MUNICIPAL MUNICIPAL MUNICIPAL
FUND BOND FUND FUND FUND FUND BOND FUND BOND FUND BOND FUND
---------- ------------ ---------- ----- ------- ------------ ------------ ----------
CLASS Y
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Shares issued 1,654 4,595 844 1,850 11 84 340 52
Shares issued in lieu
of cash distributions 181 970 63 1,198 276 1 28 1
Shares repurchased (1,154) (5,334) (408) (4,823) (62) (27) (267) (39)
------ ------ ---- ------ --- ---- ---- ----
Net increase (decrease) 681 231 499 (1,775) 225 58 101 14
====== ====== ==== ====== === ==== ==== ====
CLASS A
Shares issued 48 40 59 57 3 8 129 10
Shares issued in lieu
of cash distributions 1 14 9 8 1 4 5 1
Shares repurchased -- (88) (32) (32) (1) (19) (40) (2)
------ ------ ---- ------ --- ---- ---- ----
Net increase (decrease) 49 (34) 36 33 3 (7) 94 9
====== ====== ==== ====== === ==== ==== ====
TOTAL SHARE ACTIVITY
FOR PERIOD 730 197 535 (1,742) 228 51 195 23
====== ====== ==== ====== === ==== ==== ====
</TABLE>
AMOUNTS DESIGNATED AS "--" ARE EITHER $0 OR HAVE BEEN ROUNDED TO $0.
112
<PAGE>
[SQUARE BULLET] 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, 1997, 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) DIVIDENDS(1) INTEREST TAX CREDIT(2)
- --------- ------------- ------------- ------------- ------------ -------- -------------
<S> <C> <C> <C> <C> <C> <C>
Equity Index Fund 26% 74% 100% 100% 0% 0%
Core Equity Fund 35% 65% 100% 24% 0% 0%
Growth Equity Fund 91% 9% 100% 92% 0% 0%
Special Equity Fund 19% 81% 100% 4% 0% 0%
International Growth Fund 61% 39% 100% 0% 0% 9%(3)
Balanced Fund 44% 56% 100% 18% 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 11% 89% 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%
<FN>
Please consult your tax adviser for proper treatment of this information.
- ----------
(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>
113
<PAGE>
NOTES TO
FINANCIAL
STATEMENTS
(CONTINUED)
AS OF
JUNE 30, 1997
[SQUARE BULLET] COREFUND
(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, 1997. 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, 1997, and 2) held shares of the Fund on the dividend record date of December
30, 1996.
The amount per share of income and foreign taxes paid to each country is
listed in the following schedule:
<TABLE>
<CAPTION>
Class Y Class A
Gross Foreign Gross Foreign
Country Dividend Taxes Paid Dividend Taxes Paid
- -------- -------- ---------- -------- ----------
<S> <C> <C> <C> <C>
Argentina................................................... 0.0019 0.0000 0.0018 0.0000
Australia................................................... 0.0169 0.0005 0.0155 0.0005
Austria..................................................... 0.0012 0.0000 0.0011 0.0000
Belgium..................................................... 0.0035 0.0004 0.0032 0.0004
Denmark..................................................... 0.0002 0.0000 0.0002 0.0000
Finland..................................................... 0.0002 0.0000 0.0002 0.0000
France...................................................... 0.0163 0.0021 0.0150 0.0021
Germany..................................................... 0.0162 0.0014 0.0148 0.0014
Hong Kong................................................... 0.0355 0.0000 0.0323 0.0000
Indonesia................................................... 0.0015 0.0000 0.0014 0.0000
Italy....................................................... 0.0058 0.0004 0.0053 0.0004
Japan....................................................... 0.0368 0.0037 0.0338 0.0037
Malaysia.................................................... 0.0057 0.0013 0.0053 0.0013
Mexico...................................................... 0.0004 0.0000 0.0004 0.0000
Netherlands................................................. 0.0143 0.0019 0.0132 0.0019
New Zealand................................................. 0.0018 0.0002 0.0016 0.0002
Norway...................................................... 0.0003 0.0000 0.0003 0.0000
Philippines................................................. 0.0001 0.0000 0.0001 0.0000
Singapore................................................... 0.0043 0.0008 0.0040 0.0008
Spain....................................................... 0.0094 0.0006 0.0086 0.0006
South Africa................................................ 0.0022 0.0001 0.0020 0.0001
Sweden...................................................... 0.0078 0.0008 0.0072 0.0008
Switzerland................................................. 0.0116 0.0012 0.0106 0.0012
Thailand.................................................... 0.0115 0.0009 0.0106 0.0009
United Kingdom.............................................. 0.1512 0.0158 0.1391 0.0158
United States............................................... 0.0452 0.0001 0.0412 0.0001
------- ------- ------- -------
0.4017 0.0322 0.3687 0.0322
</TABLE>
114
<PAGE>
SHAREHOLDER
NOTES
[SQUARE BULLET] COREFUND
115
<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. SEIFINANCIAL SERVICES COMPANY SERVES AS
DISTRIBUTOR AND IS NOT AFFILIATED WITH CORESTATES BANK, N.A.
<PAGE>
COREFUNDS,
INC.
[SQUARE BULLET]
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
SEIINVESTMENTS DISTRIBUTION CO.
OAKS, PA 19456
LEGAL COUNSEL
MORGAN, LEWIS &BOCKIUS
PHILADELPHIA, PA 19103
AUDITORS
ERNST & YOUNG LLP
PHILADELPHIA, PA 19103
INVESTMENT ADVISER
[COREFUND LOGO]
CORESTATES INVESTMENT ADVISERS FOR MORE INFORMATION, CALL COREFUND AT
1-800-355-CORE (2673).
COR-F-044-05
<PAGE>
CoreFunds,Inc.
-------------
ELITE CASH RESERVE
ANNUAL REPORT
June 30, 1997
<PAGE>
INVESTMENT ADVISER'S REPORT
COREFUND ELITE CASH RESERVE
JUNE 30, 1997
The CoreFund Elite Cash Reserve Fund (Class Y) returned 5.30% for the one-year
period ended June 30, 1997. The Fund significantly outperformed it's benchmark
index, The IBC/Donoghue All-Taxable Money Fund, which returned 4.87% for the
same period.
The Fund's assets decreased by 46.1% during the period from $384.4 million on
June 30, 1996 to $207 million on June 30, 1997.
The average weighted maturity was reduced during this first quarter of 1997 to
accommodate this move. The average weighted maturity changed from 45-55 to 55-65
days during the one-year period. The current maturity target for the CoreFund
Elite Cash Reserve is 65 to 70 days.
The portfolio structure continues to favor commercial paper as it offers the
best absolute value to the Fund. Other spread products, such as, floaters,
insurance funding agreements and corporate note also enhance the overall yield.
We continue to use a laddered approach and look for added value along the money
market yield curve.
<PAGE>
<PAGE>
STATEMENT OF NET ASSETS COREFUND MONEY MARKET FUNDS
- --------------------------------------------------------------------------------
June 30, 1997
PAR VALUE
ELITE CASH RESERVE (000) (000)
- --------------------------------------------------------------------------------
COMMERCIAL PAPER - 57.4%
BANKING - 7.3%
Abbey National Bank (A)
5.770%, 07/01/97 ...................... $ 150 $ 148
Abm Amro North American Finance
5.479%, 07/09/97 ...................... 5,000 4,994
Cit Group Holdings
5.628%, 08/21/97 ...................... 5,000 4,961
Eureka Securitization
5.580%, 09/03/97 ...................... 5,000 4,950
---------
Total Banking 15,053
---------
FINANCIAL SERVICES - 23.8%
AI Credit
5.560%, 07/21/97 ...................... 5,000 4,985
Ameritech Capital Funding
5.799%, 12/08/97 ...................... 5,000 4,875
Asset Securitization Coop
5.715%, 07/10/97 ...................... 4,450 4,444
5.606%, 08/28/97 ...................... 5,000 4,955
Ciesco
5.679%, 08/12/97 ...................... 5,000 4,967
Merrill Lynch
5.494%, 07/01/97 ...................... 5,000 5,000
5.689%, 08/01/97 ...................... 5,000 4,976
Morgan Stanley
5.518%, 07/15/97 ...................... 5,000 4,989
5.610%, 09/12/97 ...................... 5,000 4,943
Pitney Bowes Credit
5.670%, 07/07/97 ...................... 5,000 4,995
---------
Total Financial Services 49,129
---------
INDUSTRIAL - 16.7%
Amoco
5.587%, 07/08/97 ...................... 5,000 4,995
5.500%, 08/13/97 ...................... 5,000 4,967
Ford Motor Credit
5.638%, 08/27/97 ...................... 5,000 4,956
5.640%, 12/03/97 ...................... 5,000 4,878
1
<PAGE>
STATEMENT OF NET ASSETS (CONTINUED) COREFUND MONEY MARKET FUNDS
- --------------------------------------------------------------------------------
June 30, 1997
PAR VALUE
ELITE CASH RESERVE (000) (000)
- --------------------------------------------------------------------------------
General Electric Capital
5.603%, 07/28/97 ...................... $5,000 $ 4,979
5.765%, 10/31/97 ...................... 5,000 4,905
Mobil Australia Finance
5.694%, 08/06/97 ...................... 5,000 4,972
--------
Total Industrial 34,652
--------
SOVEREIGNTIES - 9.6%
Province of British Columbia
5.655%, 07/16/97 ...................... 5,000 4,988
5.783%, 10/29/97 ...................... 5,000 4,906
Province of Quebec
5.667%, 07/03/97 ...................... 5,000 4,998
5.603%, 07/17/97 ...................... 5,000 4,988
--------
Total Sovereignties 19,880
--------
TOTAL COMMERCIAL PAPER
(Cost $118,714) ............................................ 118,714
- -----------------------------------------------------------------------------
U.S. GOVERNMENT AGENCY OBLIGATIONS - 7.3%
FHLB
6.000%, 09/24/97 ...................... 5,000 5,006
5.260%, 12/10/97 (A) .................. 5,000 4,999
5.810%, 01/23/98 ...................... 5,000 5,000
--------
TOTAL U.S. GOVERNMENT AGENCY OBLIGATIONS
(Cost $15,005) ............................................. 15,005
- -----------------------------------------------------------------------------
ASSET-BACKED SECURITIES - 2.8%
Capita Equipment Receivables Trust, Series 1996-1, Class A1
5.600%, 10/15/97 ...................... 869 869
Goldman Sachs Asset Backed Securities Investment Trust,
Series 1997-C, Class N (A)
5.688%, 07/16/97 ...................... 5,000 5,000
--------
TOTAL ASSET-BACKED SECURITIES
(Cost $5,869) .............................................. 5,869
- -----------------------------------------------------------------------------
2
<PAGE>
STATEMENT OF NET ASSETS (CONTINUED) COREFUND MONEY MARKET FUNDS
- --------------------------------------------------------------------------------
June 30, 1997
PAR VALUE
ELITE CASH RESERVE (000) (000)
- --------------------------------------------------------------------------------
CORPORATE OBLIGATIONS - 10.8%
FINANCIAL SERVICES - 3.5%
Abbey National Treasury Services (A)
5.650%, 04/15/98 ...................... $5,000 $ 4,998
Associates Corporation of North America
7.750%, 11/01/97 ...................... 2,200 2,215
--------
Total Financial Services 7,213
--------
INDUSTRIAL - 7.3%
E.I. duPont de Nemours
5.590%, 10/08/97 ...................... 5,000 5,000
8.650%, 12/01/97 ...................... 5,000 5,061
Toyota Motor Credit (A)
5.680%, 07/01/97 ...................... 5,000 5,000
--------
Total Industrial 15,061
--------
TOTAL CORPORATE OBLIGATIONS
(Cost $22,274) ............................................. 22,274
- -----------------------------------------------------------------------------
MASTER NOTES - 1.8%
FINANCIAL SERVICES - 1.8%
Associates Corporation of North America (A)
5.497%, 07/01/97 ...................... 3,647 3,647
SLMA (A)
5.220%, 07/01/97 ...................... 14 14
--------
Total Financial Services 3,661
--------
TOTAL MASTER NOTES
(Cost $3,661) .............................................. 3,661
- -----------------------------------------------------------------------------
TIME DEPOSITS - 8.2%
BANKING - 8.2%
Bank of Montreal
6.000%, 07/01/97 ...................... 5,000 5,000
First Union Bank
6.000%, 07/01/97 ...................... 2,000 2,000
Republic New York
6.000%, 07/01/97 ...................... 5,000 5,000
Sumitomo Bank
6.125%, 07/01/97 ...................... 5,000 5,000
--------
Total Banking 17,000
--------
3
<PAGE>
STATEMENT OF NET ASSETS COREFUND MONEY MARKET FUNDS
- --------------------------------------------------------------------------------
June 30, 1997
PAR VALUE
ELITE CASH RESERVE (000) (000)
- --------------------------------------------------------------------------------
TOTAL TIME DEPOSITS
(Cost $17,000) .............................................. $ 17,000
- -----------------------------------------------------------------------------
INSURANCE FUNDING AGREEMENTS - 2.4%
FINANCIAL SERVICES - 2.4%
Allstate (A)
5.745%, 07/01/97 ...................... $5,000 5,000
--------
TOTAL INSURANCE FUNDING AGREEMENTS
(Cost $5,000) ............................................... 5,000
- -----------------------------------------------------------------------------
CERTIFICATES OF DEPOSIT - 7.2%
BANKING - 7.2%
National Westminster Bank PLC
5.940%, 06/26/98 ...................... 5,000 4,997
Societe Generale
6.080%, 06/09/98 ...................... 5,000 4,998
Swiss Bank
6.020%, 06/12/98 ...................... 5,000 5,002
--------
Total Banking 14,997
--------
TOTAL CERTIFICATES OF DEPOSIT
(Cost $14,997) .............................................. 14,997
- -----------------------------------------------------------------------------
REPURCHASE AGREEMENT - 2.4%
Swiss Bank 5.95%, dated 06/30/97, matures
07/01/97, repurchase price $5,000,826
(collateralized by U.S. Treasury Note,
par value $5,025,000, 6.50%, 04/30/99;
market value $5,121,480) ................. 5,000 5,000
--------
TOTAL REPURCHASE AGREEMENT
(Cost $5,000) ............................................... 5,000
- -----------------------------------------------------------------------------
TOTAL INVESTMENTS - 100.3%
(Cost $207,520) ................................................ 207,520
- -----------------------------------------------------------------------------
OTHER ASSETS AND LIABILITIES, NET - (0.3%) ........................ (533)
- -----------------------------------------------------------------------------
4
<PAGE>
STATEMENT OF NET ASSETS (CONCLUDED) COREFUND MONEY MARKET FUNDS
- --------------------------------------------------------------------------------
June 30, 1997
VALUE
ELITE CASH RESERVE (000)
- ----------------------------------------------------------------------------
NET ASSETS:
Portfolio Shares ($0.001 par value -- 750 million authorized) based on
206,990,198 outstanding shares ................................. $206,990
Accumulated net realized loss on investments (3)
- -----------------------------------------------------------------------------
TOTAL NET ASSETS - 100.0% ......................................... $206,987
- -----------------------------------------------------------------------------
NET ASSET VALUE AND REDEMPTION PRICE PER SHARE .................... $1.00
- -----------------------------------------------------------------------------
(A) VARIABLE RATE SECURITY -- THE RATE REFLECTED ON THE STATEMENT OF NET ASSETS
IS THE RATE IN EFFECT ON JUNE 30, 1997.
FHLB -- FEDERAL HOME LOAN BANK
FNMA -- FEDERAL NATIONAL MORTGAGE ASSOCIATION
PLC -- PUBLIC LIMITED COMPANY
SLMA -- STUDENT LOAN MARKETING ASSOCIATION
5
<PAGE>
STATEMENT OF OPERATIONS (000) COREFUND MONEY MARKET FUNDS
- --------------------------------------------------------------------------------
For the year ended June 30, 1997
ELITE CASH RESERVE+
- --------------------------------------------------------------------------------
INVESTMENT INCOME:
Interest ................................................. $19,367
-------
EXPENSES:
Investment advisory fees .................................... 710
Less investment advisory fees waived ........................ (659)
Administrative fees ......................................... 888
Less administrative fees waived ............................. (521)
Transfer agent fees & expenses .............................. 57
Registration & filing fees .................................. 35
Printing .................................................... 32
Professional fees ........................................... 29
Directors fees .............................................. 10
Insurance ................................................... 4
Miscellaneous ............................................... 15
-------
Total expenses .................................................... 600
-------
NET INVESTMENT INCOME ............................................. 18,767
-------
NET REALIZED LOSS ON INVESTMENTS .................................. (3)
-------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS .............. $18,764
=======
+THIS FUND WAS FORMERLY KNOWN AS THE FIDUCIARY RESERVE.
See accompanying notes to financial statements.
6
<PAGE>
STATEMENT OF CHANGES IN NET ASSETS (000) COREFUND MONEY MARKET FUNDS
- --------------------------------------------------------------------------------
For the years ended June 30
ELITE CASH RESERVE+
- --------------------------------------------------------------------------------
1997 1996
----------- --------
OPERATIONS:
Net investment income ................ $ 18,767 $ 21,639
Net realized loss on securities sold . (3) --
----------- --------
Net increase in net assets resulting
from operations ................... 18,764 21,639
----------- --------
DIVIDENDS DISTRIBUTED FROM:
Net investment income ................ (18,767) (21,639)
----------- --------
CAPITAL SHARE TRANSACTIONS:
Proceeds from shares issued .......... 825,899 596,669
Cost of shares redeemed .............. (1,003,355) (618,820)
----------- --------
Decrease in net assets derived from
capital share transactions ........ (177,456) (22,151)
----------- --------
NET DECREASE IN NET ASSETS: ................ (177,459) (22,151)
NET ASSETS:
Beginning of period .................. 384,446 406,597
----------- --------
End of period ........................ 206,987 $384,446
=========== ========
SHARES ISSUED AND REDEEMED:
Shares issued ........................ 825,899 596,669
Shares redeemed ...................... (1,003,355) (618,820)
----------- --------
Decrease in net shares derived from
capital share transactions ........ (177,456) (22,151)
----------- --------
OUTSTANDING SHARES:
Beginning of period .................. 384,446 406,597
----------- --------
End of period ........................ 206,990 384,446
=========== ========
+THIS FUND WAS FORMERLY KNOWN AS THE FIDUCIARY RESERVE.
See accompanying notes to financial statements.
7
<PAGE>
<TABLE>
FINANCIAL HIGHLIGHTS COREFUND MONEY MARKET FUNDS
- ------------------------------------------------------------------------------------------------------------------------------------
June 30, 1997
ELITE CASH RESERVE+
- ------------------------------------------------------------------------------------------------------------------------------------
For a Share Outstanding Throughout the Period
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
DISTRIB-
BUTIONS RATIO RATIO OF
NET FROM NET NET RATIO OF EXPENSES NET INCOME
ASSET NET NET ASSET ASSETS RATIO OF NET TO AVERAGE TO AVERAGE
VALUE INVEST- INVEST- VALUE END OF EXPENSES INCOME NET ASSETS NET ASSETS
BEGINNING MENT MENT END TOTAL OF PERIOD TO AVERAGE TO AVERAGE (EXCLUDING (EXCLUDING
OF PERIOD INCOME INCOME OF PERIOD RETURN (000) NET ASSETS NET ASSETS WAIVERS) WAIVERS)
--------- ------ ------ --------- ------ -------- ---------- ---------- -------- --------
For the year ended
June 30, 1997 $1.00 0.05 (0.05) $1.00 5.43% $206,987 0.17% 5.28% 0.50% 4.94%
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%
- -----------------
</TABLE>
* RETURN IS FOR THE PERIOD INDICATED AND HAS NOT BEEN ANNUALIZED.
(1) THE ELITE CASH RESERVE COMMENCED OPERATIONS AUGUST 7, 1989.
RATIOS FOR THIS PERIOD HAVE BEEN ANNUALIZED.
+ THIS FUND WAS FORMERLY KNOWN AS THE FIDUCIARY RESERVE.
See accompanying notes to financial statements.
8
<PAGE>
NOTES TO FINANCIAL STATEMENTS COREFUND MONEY MARKET FUNDS
- --------------------------------------------------------------------------------
June 30, 1997
1. ORGANIZATION
The CoreFund Elite Cash 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:
Equity Index Fund Treasury Reserve
Core Equity Fund Cash Reserve
Growth Equity Fund Tax-Free Reserve
Special Equity Fund Elite Treasury Reserve
International Growth Fund Elite Cash Reserve
Balanced Fund Elite Tax-Free Reserve
FIXED INCOME FUNDS:
Short Term Income
Short-Intermediate Bond Fund
Government Income Fund
Bond Fund
Global Bond Fund
Intermediate Municipal Bond Fund
Pennsylvania Municipal Bond Fund
New Jersey Municipal Bond Fund
The financial statements included herein present only those of the Elite Cash
Reserve. 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 Fund's prospectus provides
a description of the Fund's investment objectives, policies and strategies.
2. SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies followed by the
Elite Cash Reserve.
SECURITY VALUATION -- Investment securities of the Elite Cash Reserve 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.
9
<PAGE>
NOTES TO FINANCIAL STATEMENTS (CONTINUED) COREFUND MONEY MARKET FUNDS
- --------------------------------------------------------------------------------
June 30, 1997
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 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 April 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 Elite Cash
Reserve. For the year ended June 30, 1997, CoreStates Advisers earned $710,442
in investment advisory fees, of which $659,442 was voluntarily waived in order
to assist the Fund in maintaining a competitive expense ratio.
CoreStates Bank serves as Custodian to the Company. Under the Custodian
Agreement, CoreStates Bank holds each Fund's securities and cash items, makes
receipts and disbursements of money on behalf of each Fund, collects and
receives all income and other payments and distributions on account of the
Funds' securities and performs other related services. CoreStates Bank may, at
its discretion and at its own expense, open and maintain a sub-custody account
or employ a sub-custodian on behalf of the Funds investing exclusively in the
United States and may, with the Funds' Board approval and at the expense of the
Funds, employ sub-custodians on behalf of the Funds who invest in foreign
countries provided that CoreStates Bank shall remain liable for the performance
of all of its duties under the Custodian Agreement.
10
<PAGE>
NOTES TO FINANCIAL STATEMENTS (CONTINUED) COREFUND MONEY MARKET FUNDS
- --------------------------------------------------------------------------------
June 30, 1997
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 Elite Cash Reserve. Such a fee is computed daily and
paid monthly. For the year ended June 30, 1997, administrative fees totaled
$887,885 of which $521,130 was voluntarily waived in order to assist the Fund in
maintaining a competitive expense ratio.
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 Investments Distribution Co., 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.
11
<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, 1997, the Elite Cash Reserve is
designating long-term capital gains, qualifying dividends and exempt income with
regard to distributions paid during the year as follows:
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
(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
--------- ------------ ------------- ------------- ------------ -------- ----------
Elite Cash Reserve 0% 100% 100% 0% 0% 0%
</TABLE>
(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.
Please consult your tax department for proper treatment of this information.
12
<PAGE>
REPORT OF INDEPENDENT AUDITORS
Board of Directors and Shareholders
CoreFunds, Inc.
We have audited the accompanying statement of net assets of the CoreFund Elite
Cash Reserve of CoreFunds, Inc. (the "Fund") as of June 30, 1997, 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 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
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, 1997 and confirmation of securities not held by the
custodian by correspondence with brokers. An audit also includes assessing the
accounting principles used and significant estimates made by management, as well
as evaluating the overall financial statement presentation. We believe that our
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
Fund at June 30, 1997, 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 herein, in conformity with generally accepted accounting principles.
Philadelphia, Pennsylvania
August 12, 1997 /S/Ernst & Young LLP
13
<PAGE>
<PAGE>
<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-056-02
<PAGE>
CoreFunds, Inc.
--------------
ELITE TREASURY RESERVE
ANNUAL REPORT
June 30, 1997
<PAGE>
<PAGE>
INVESTMENT ADVISER'S REPORT
COREFUND ELITE TREASURY RESERVE
JUNE 30, 1997
The CoreFund Elite Treasury Reserve returned 5.33% net of expenses for the
one-year period ended June 30, 1997. The Fund's assets decreased in size by
11.4% during the period from $24.5 million on June 30, 1996 to $21.7 million on
June 30, 1997. The average weighted maturity of the Fund increased from 58 to 63
days during the one-year period. The Fund significantly outperformed its
benchmark index, the IBC/Donoghue U.S. Treasury and Repo Average, which returned
4.78% for the same period.
<PAGE>
<PAGE>
STATEMENT OF NET ASSETS COREFUND MONEY MARKET FUNDS
- --------------------------------------------------------------------------------
June 30, 1997
<TABLE>
PAR VALUE
ELITE TREASURY RESERVE (000) (000)
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
U.S. TREASURY OBLIGATIONS - 35.7%
U.S. Treasury Bills+
5.901%, 08/21/97 .......................................................... $ 500 $ 496
5.589%, 10/16/97 .......................................................... 500 492
5.508%, 11/13/97 .......................................................... 500 490
5.564%, 11/13/97 .......................................................... 500 490
5.648%, 03/05/98 .......................................................... 500 481
5.806%, 04/02/98 .......................................................... 500 479
5.796%, 04/30/98 .......................................................... 500 477
5.587%, 05/28/98 .......................................................... 500 476
U.S. Treasury Notes
5.500%, 07/31/97 .......................................................... 400 400
5.750%, 10/31/97 .......................................................... 500 500
5.250%, 12/31/97 .......................................................... 500 499
5.625%, 01/31/98 .......................................................... 900 900
U.S. Treasury STRIPS+
5.400%, 08/15/97 .......................................................... 500 497
5.684%, 11/15/97 .......................................................... 700 686
5.725%, 05/15/98 .......................................................... 400 381
--------
TOTAL U.S. TREASURY OBLIGATIONS
(Cost $7,744) .................................................................................... 7,744
- -------------------------------------------------------------------------------------------------------------------
REPURCHASE AGREEMENTS - 64.7%
Aubrey Lanston 5.90%, dated 06/30/97, matures 07/01/97, repurchase price
$5,000,819 (collateralized by U.S. Treasury Note, par value $5,020,000,
6.00%, 09/30/98;
market value $5,100,320) ..................................................... 5,000 5,000
First National Bank of Chicago 5.95%, dated 06/30/97,
matures 07/01/97, repurchase price $1,007,166
(collateralized by U.S. Treasury Note, par value $1,035,000,
5.75%, 10/31/00; market value $1,030,550) .................................... 1,007 1,007
Goldman Sachs 5.80%, dated 06/30/97, matures 07/01/97,
repurchase price $900,145 (collateralized by U.S. Treasury
Note, par value $865,000, 9.125%, 05/15/99;
market value $921,484) ....................................................... 900 900
Hong Kong Shanghai Bank 5.80%, dated 06/30/97, matures 07/01/97, repurchase
price $600,097 (collateralized by U.S. Treasury Note, par value $585,000,
7.25%, 05/15/04;
market value $617,643) ....................................................... 600 600
</TABLE>
1
<PAGE>
<TABLE>
STATEMENT OF NET ASSETS (CONCLUDED) COREFUND MONEY MARKET FUNDS
- -------------------------------------------------------------------------------------------------------------------
June 30, 1997
PAR VALUE
ELITE TREASURY RESERVE (000) (000)
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Merrill Lynch 5.60%, dated 06/30/97, matures 07/01/97, repurchase price
$900,140 (collateralized by U.S. Treasury Note, par value $910,000,
6.125%, 05/15/98;
market value $919,646) ...................................................... $ 900 $ 900
Sanwa Bank 5.85%, dated 06/30/97, matures 07/01/97,
repurchase price $5,000,813 (collateralized by U.S.
Treasury Note, par value $4,985,000, 6.125%, 08/31/98;
market value $5,100,154) .................................................... 5,000 5,000
Swiss Bank 5.875%, dated 06/30/97, matures 07/01/97,
repurchase price $600,098 (collateralized by U.S. Treasury
Note, par value $625,000, 5.625%, 11/30/00;
market value $616,438) ...................................................... 600 600
--------
TOTAL REPURCHASE AGREEMENTS
(Cost $14,007) .................................................................................. 14,007
- -------------------------------------------------------------------------------------------------------------------
TOTAL INVESTMENTS - 100.4%
(Cost $21,751) ..................................................................................... 21,751
- -------------------------------------------------------------------------------------------------------------------
OTHER ASSETS AND LIABILITIES, NET - (0.4%) ............................................................ (84)
- -------------------------------------------------------------------------------------------------------------------
NET ASSETS:
Portfolio Shares ($0.001 par value -- 250 million authorized shares)
based on 21,666,504 outstanding shares ............................................................. 21,667
- -------------------------------------------------------------------------------------------------------------------
TOTAL NET ASSETS - 100.0% ............................................................................. $21,667
- -------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE AND REDEMPTION PRICE PER SHARE ........................................................ $1.00
- -------------------------------------------------------------------------------------------------------------------
</TABLE>
+ EFFECTIVE YIELD
STRIPS -- SEPARATELY TRADED REGISTERED INTEREST AND PRINCIPAL OF SECURITIES
See accompanying notes to financial statements.
2
<PAGE>
STATEMENT OF OPERATIONS (000) COREFUND MONEY MARKET FUNDS
- ----------------------------------------------------------------------
For the year ended June 30, 1997
ELITE TREASURY RESERVE+
- ----------------------------------------------------------------------
NVESTMENT INCOME:
Interest ........................................... $1,392
------
EXPENSES:
Investment advisory fees .............................. 52
Less investment advisory fees waived .................. (47)
Administrative fees ................................... 64
Less administrative fees waived ....................... (39)
Transfer agent fees & expenses ........................ 18
Professional fees ..................................... 2
Registration & filing fees ............................ (9)
Printing .............................................. 4
------
Total expenses .............................................. 45
------
NET INVESTMENT INCOME ....................................... 1,347
------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS ........ $1,347
======
+THIS FUND WAS FORMERLY KNOWN AS THE FIDUCIARY TREASURY RESERVE.
See accompanying notes to financial statements.
3
<PAGE>
STATEMENT OF CHANGES IN NET ASSETS (000) COREFUND MONEY MARKET FUNDS
- --------------------------------------------------------------------------------
For the years ended June 30
ELITE TREASURY RESERVE+
- --------------------------------------------------------------------------------
1997 1996
---- ----
OPERATIONS:
Net investment income ................. $ 1,347 $ 1,112
--------- ---------
Net increase in net assets resulting
from operations .................... 1,347 1,112
--------- ---------
DIVIDENDS DISTRIBUTED FROM:
Net investment income ................. (1,347) (1,112)
--------- ---------
Total dividends distributed ........... (1,347) (1,112)
--------- ---------
CAPITAL SHARE TRANSACTIONS:
Proceeds from shares issued ........... 40,896 26,668
Cost of shares redeemed ............... (43,727) (20,565)
--------- ---------
Increase (decrease) in net assets derived from
capital share transactions ......... (2,831) 6,103
--------- ---------
NET INCREASE (DECREASE) IN NET ASSETS ....... (2,831) 6,102
NET ASSETS:
Beginning of period ................... 24,498 18,396
--------- ---------
End of period ......................... $21,667 $ 24,498
========= =========
SHARES ISSUED AND REDEEMED:
Shares issued ......................... 40,896 26,668
Shares redeemed ....................... (43,727) (20,565)
--------- ---------
Increase (decrease) in net shares derived from
capital share transactions ......... (2,831) 6,103
--------- ---------
OUTSTANDING SHARES:
Beginning of period ................... 24,498 18,395
--------- ---------
End of period ......................... 21,667 24,498
========= =========
+THIS FUND WAS FORMERLY KNOWN AS THE FIDUCIARY TREASURY RESERVE.
See accompanying notes to financial statements.
4
<PAGE>
<TABLE>
FINANCIAL HIGHLIGHTS COREFUND MONEY MARKET FUNDS
- ------------------------------------------------------------------------------------------------------------------------------------
June 30, 1997
ELITE TREASURY RESERVE+
- ------------------------------------------------------------------------------------------------------------------------------------
For a Share Outstanding Throughout the Period
RATIO RATIO
NET DISTRIBUTIONS NET NET RATIO OF EXPENSES NET INCOME
ASSET NET FROM NET ASSET ASSETS RATIO OF NET TO AVERAGE TO AVERAGE
VALUE INVEST- INVEST- VALUE END OF EXPENSES INCOME NET ASSETS NET ASSETS
BEGINNING MENT MENT END TOTAL OF PERIOD TO AVERAGE TO AVERAGE (EXCLUDING (EXCLUDING
OF PERIOD INCOME INCOME OF 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, 1997 $1.00 0.05 (0.05) $1.00 5.33% $21,667 0.17% 5.20% 0.50% 4.87%
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%
</TABLE>
- --------------------------------------------------------------------------------
* RETURN IS FOR THE PERIOD INDICATED AND HAS NOT BEEN ANNUALIZED.
(1) THE ELITE TREASURY RESERVE COMMENCED OPERATIONS ON DECEMBER 10, 1991.
RATIOS FOR THIS PERIOD HAVE BEEN ANNUALIZED.
+ THIS FUND WAS FORMERLY KNOWN AS THE FIDUCIARY TREASURY RESERVE.
See accompanying notes to financial statements.
5
<PAGE>
NOTES TO FINANCIAL STATEMENTS COREFUND MONEY MARKET FUNDS
- --------------------------------------------------------------------------------
June 30, 1997
1. ORGANIZATION
The CoreFund Elite 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:
Equity Index Fund Treasury Reserve
Core Equity Fund Cash Reserve
Growth Equity Fund Tax-Free Reserve
Special Equity Fund Elite Treasury Reserve
International Growth Fund Elite Cash Reserve
Balanced Fund Elite Tax-Free Reserve
FIXED INCOME FUNDS:
Short Term Income Fund
Short-Intermediate Bond Fund
Government Income Fund
Bond Fund
Global Bond Fund
Intermediate Municipal Bond Fund
Pennsylvania Municipal Bond Fund
New Jersey Municipal Bond Fund
The financial statements included herein present only those of the Elite
Treasury Reserve. 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 Fund's prospectus provides
a description of the Fund's investment objectives, policies and strategies.
2. SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies followed by the
Elite Treasury Reserve.
SECURITY VALUATION -- Investment securities of the Elite Treasury Reserve 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 (CONTINUED) COREFUND MONEY MARKET FUNDS
- --------------------------------------------------------------------------------
June 30, 1997
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 April 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 Elite Treasury
Reserve. For the year ended June 30, 1997, CoreStates Advisers earned $51,711 in
investment advisory fees, of which $46,509 was voluntarily waived in order to
assist the Fund in maintaining a competitive expense ratio.
CoreStates Bank serves as Custodian to the Company. Under the Custodian
Agreement, CoreStates Bank holds each Fund's securities and cash items, makes
receipts and disbursements of money on behalf of each Fund, collects and
receives all income and other payments and distributions on account of the
Funds' securities and performs other related services. CoreStates Bank may, at
its discretion and at its own expense, open and maintain a sub-custody account
or employ a sub-custodian on behalf of the Funds investing exclusively in the
United States and may, with the Funds'
7
<PAGE>
NOTES TO FINANCIAL STATEMENTS (CONTINUED) COREFUND MONEY MARKET FUNDS
- --------------------------------------------------------------------------------
June 30, 1997
Board approval and at the expense of the Funds, employ sub-custodians on behalf
of the Funds who invest in foreign countries provided that CoreStates Bank shall
remain liable for the performance of all of its duties under the Custodian
Agreement.
4. ADMINISTRATIVE, DISTRIBUTION, AND TRANSFER AGENT SERVICES
Pursuant to an administration agreement dated October 30, 1992, as amended June
1, 1995, SEI Fund Resource ("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 Elite Treasury Reserve. Such a fee is computed daily and
paid monthly. For the year ended June 30, 1997, administrative fees totaled
$64,633 of which $38,795 was voluntarily waived in order to assist the Fund in
maintaining a competitive expense ratio.
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 Investments Distribution Co., 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.
8
<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, 1997, the Elite 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>
(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
------------ ------------ ------------ ------------ ------------ -------- ----------
<S> <C> <C> <C> <C> <C> <C>
Elite Treasury Reserve 0% 100% 100% 0% 0% 0%
</TABLE>
(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.
Please consult your tax department for proper treatment of this information.
9
<PAGE>
REPORT OF INDEPENDENT AUDITORS
Board of Directors and Shareholders
CoreFunds, Inc.
We have audited the accompanying statement of net assets of the CoreFund Elite
Treasury Reserve of CoreFunds, Inc. (the "Fund") as of June 30, 1997, 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 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
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, 1997 and confirmation of securities not held by the
custodian by correspondence with brokers. An audit also includes assessing the
accounting principles used and significant estimates made by management, as well
as evaluating the overall financial statement presentation. We believe that our
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
Fund at June 30, 1997, 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 herein, in conformity with generally accepted accounting principles.
Philadelphia, Pennsylvania
August 12, 1997 /S/ERNST & YOUNG LLP
10
<PAGE>
NOTES
<PAGE>
<PAGE>
<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-057-02
<PAGE>
CoreFunds,Inc.
-------------
ELITE TAX-FREE RESERVE
ANNUAL REPORT
June 30, 1997
<PAGE>
<PAGE>
INVESTMENT ADVISER'S REPORT
COREFUND ELITE TAX-FREE RESERVE
JUNE 30, 1997
The CoreFund Elite Tax-Free Reserve returned 3.42% for the one-year period ended
June 30, 1997. This compared with a return of 3.03% for the Benchmark Index, the
IBC/Donoghue Tax Free Average, for the same period. The Fund grew by 70.3%
during the period from $86.5 million on June 30, 1996 to $147.3 million on June
30, 1997.
The average weighed maturity of the Tax-Free Reserve was 41 days during the
year. And, the Fund's one year effective yield was 3.42%, as the Fund
outperformed its benchmark.
During the first six months of this period we experienced normal patterns in the
tax-free money market securities market. The market is driven by seasonality in
terms of the amount of cash in the market. Typically during January, June, and
July, yields fall due to an abundance of cash in the market. However, in January
of 1997, a new pattern emerged as a strong decline in prerefunded bonds took
cash out of the market. As a result, supply was adequate and yields were
fabulous.
Throughout the first half of 1997, conditions have remained positive for the
Fund. For a few days in June, the tax-exempt rate was equal to the taxable rate.
We're seeing changes to the fundamentals of the market that are resulting in
higher yields. And, the trend should continue. It appears that supply should
remain strong and, with more availability comes higher yields.
Our strategy will remain steady as we keep the average maturity of the Fund
between 40 and 60 days. We will extend out on the yield curve when we see an
issue of high value. We will also continue to utilize commercial paper and
smaller note deals as appropriate. Our challenge will be to research and
identify new cash flow patterns and take advantage of them in the
coming months.
<PAGE>
<PAGE>
<TABLE>
STATEMENT OF NET ASSETS COREFUND MONEY MARKET FUNDS
- -------------------------------------------------------------------------------------------------------------------
June 30, 1997
PAR VALUE
ELITE TAX-FREE RESERVE (000) (000)
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
MUNICIPAL BONDS - 101.4%
ALABAMA - 3.9%
Montgomery, Alabama TECP
3.500%, 08/13/97 ........................................................... $2,000 $ 2,000
North Alabama Environmental Improvement Authority Revenue
Bond for Reynold Metals Project (A) (B) (C)
4.100%, 07/01/97 ........................................................... 1,300 1,300
Winfield, Alabama Industrial Development Authority Revenue
Bond for Union Underwear Project (A) (B) (C)
4.000%, 12/01/97 ........................................................... 2,400 2,400
--------
Total Alabama 5,700
--------
ALASKA - 2.1%
Valdez, Alaska TECP
3.650%, 08/08/97 ........................................................... 3,075 3,075
--------
ARIZONA - 1.9%
Arizona Agriculture Improvement and Power District Electric
Revenue Bond for Salt River Project, Series E
Pre-Refunded @ 100 (D)
8.250%, 01/01/98 ........................................................... 2,710 2,773
--------
CALIFORNIA - 1.5%
Sonoma County, California TRAN
4.500%, 01/29/98 ........................................................... 2,200 2,212
--------
COLORADO - 1.0%
Moffat County, Colorado Pollution Control Revenue Bond (A) (B)
4.200%, 07/01/97 ........................................................... 1,400 1,400
--------
DELAWARE - 0.7%
Wilmington, Delaware Franciscan Health System Hospital
Revenue Bond (A) (B)
4.100%, 07/01/97 ........................................................... 400 400
Wilmington, Delaware Hospital Revenue Bond for Franciscan
Health Systems Project, Series A (A) (B) (C)
4.100%, 07/01/97 ........................................................... 700 700
--------
Total Delaware 1,100
--------
</TABLE>
1
<PAGE>
<TABLE>
STATEMENT OF NET ASSETS (CONTINUED) COREFUND MONEY MARKET FUNDS
- -------------------------------------------------------------------------------------------------------------------
June 30, 1997
<S> <C> <C>
PAR VALUE
ELITE TAX-FREE RESERVE (000) (000)
- -------------------------------------------------------------------------------------------------------------------
FLORIDA - 3.7%
Dade County, Florida Fixed Capital Asset Acquisition Revenue
Bond, Series 1990 (A) (B) (C)
4.450%, 07/01/97 ........................................................... $1,200 $ 1,200
Florida State Housing Finance Agency Revenue Bond for Carlton
Project, Series EEE (A) (B) (C)
4.200%, 07/01/97 ........................................................... 1,020 1,020
Florida State Housing Finance Agency Revenue Bond for
Huntington Project (A) (B) (C)
4.300%, 07/01/97 ........................................................... 200 200
Jacksonville, Florida Hospital Revenue Bond for Methodist
Hospital Project Pre-Refunded @ 102 (D)
10.500%, 10/01/97 .......................................................... 2,000 2,073
Sunshine State, Florida TECP
3.700%, 08/12/97 ........................................................... 1,000 1,000
--------
Total Florida 5,493
--------
GEORGIA - 0.9%
Georgia Municipal Electric Authority Revenue Bond,
Series B Pre-Refunded @ 102 (A) (B) (D)
8.000%, 01/01/98 ........................................................... 1,000 1,041
Hapeville, Georgia Industrial Development Authority
Revenue Bond for Hapeville Hotel Project (A) (B) (C)
4.150%, 07/01/97 ........................................................... 300 300
--------
Total Georgia 1,341
--------
ILLINOIS - 3.3%
Chicago, Illinois Equipment Notes
3.600%, 12/04/97 ........................................................... 2,500 2,500
Chicago, Illinois O'Hare Airport Revenue Bond (A) (B) (C)
4.200%, 07/01/97 ........................................................... 300 300
Illinois Development Financial Authority Pollution Control
Revenue Bond for Amoco Oil Company Project (A) (B)
4.000%, 07/01/97 ........................................................... 600 600
Illinois State Toll Highway Authority Revenue Bond,
Series B MBIA (A) (B)
4.150%, 07/01/97 ........................................................... 1,400 1,400
--------
Total Illinois 4,800
--------
</TABLE>
2
<PAGE>
<TABLE>
STATEMENT OF NET ASSETS (CONTINUED) COREFUND MONEY MARKET FUNDS
- -------------------------------------------------------------------------------------------------------------------
June 30, 1997
<S> <C> <C>
PAR VALUE
ELITE TAX-FREE RESERVE (000) (000)
- -------------------------------------------------------------------------------------------------------------------
INDIANA - 4.6%
Gary, Indiana Environmental Improvement Revenue Bond for
U.S. Steel Project (A) (B) (C)
4.100%, 07/15/97 ........................................................... $ 700 $ 700
MT Vernon, Indiana TECP
3.450%, 07/16/97 ........................................................... 735 735
Sullivan, Indiana TECP
3.950%, 07/02/97 ........................................................... 1,950 1,950
3.500%, 07/16/97 ........................................................... 1,300 1,300
3.550%, 09/09/97 ........................................................... 1,000 1,000
3.800%, 09/19/97 ........................................................... 1,050 1,050
--------
Total Indiana 6,735
--------
KANSAS - 2.1%
Burlington, Kansas TECP
3.800%, 07/18/97 ........................................................... 1,500 1,500
3.800%, 08/14/97 ........................................................... 1,200 1,200
Kansas City, Kansas Industrial Development Revenue Bond
for PQ Corporation Project (A) (B) (C)
4.200%, 07/01/97 ........................................................... 100 100
Wichita, Kansas Health Facilities Revenue Bond for Wichita
Health Systems Project, Series XXV (A) (B) (C)
4.350%, 07/02/97 ........................................................... 300 300
--------
Total Kansas 3,100
--------
KENTUCKY - 2.0%
Pendelton, Kentucky TECP
3.750%, 07/22/97 ........................................................... 3,000 3,000
--------
LOUISIANA - 1.1%
Louisiana State Public Facilities Authority Revenue Bond for
Kenner Hotel Project (A) (B) (C)
4.150%, 07/01/97 ........................................................... 600 600
Louisiana State Recovery District Sales Tax Revenue Bond FGIC
3.900%, 07/01/97 ........................................................... 1,000 1,000
--------
Total Louisiana 1,600
--------
</TABLE>
3
<PAGE>
<TABLE>
STATEMENT OF NET ASSETS (CONTINUED) COREFUND MONEY MARKET FUNDS
- -------------------------------------------------------------------------------------------------------------------
June 30, 1997
<S> <C> <C>
PAR VALUE
ELITE TAX-FREE RESERVE (000) (000)
- --------------------------------------------------------------------------------------------------------------------
MASSACHUSETTS - 0.9%
Massachusetts State GO Series B, (A) (B) (C)
4.000%, 12/01/97 ........................................................... $ 350 $ 350
Massachusetts State Health and Educational Facilities Lahey
Clinic Project, Series A 1 Pre-Refunded
07/01/98 @ 102 MBIA
7.625%, 07/01/98 ........................................................... 950 1,003
--------
Total Massachusetts 1,353
--------
MICHIGAN - 1.8%
Cornell Township, Michigan Economic Development
Corporation Revenue Bond for Environmental
Improvement (A) (B) (C)
4.000%, 07/01/97 ........................................................... 1,900 1,900
Delta County, Michigan Environmental Improvement Revenue
Bond for Mead Escambia Paper Project, Series C (A) (B) (C)
4.100%, 07/01/97 ........................................................... 600 600
Michigan State Strategic Fund Pollution Control Revenue Bond
for Consumer Power Project (A) (B) (C)
4.050%, 07/01/97 ........................................................... 100 100
--------
Total Michigan 2,600
--------
MISSISSIPPI - 1.6%
Claiborne County, Mississippi TECP
3.700%, 07/25/97 ........................................................... 1,000 1,000
Jackson County, Port Facility Revenue Bond for Mississippi
Chevron USA Project, Series A AMBAC (A) (B) (C)
4.000%, 07/01/97 ........................................................... 1,400 1,400
--------
Total Mississippi 2,400
--------
MISSOURI - 2.1%
Claireborne, Missouri TECP
3.800%, 07/18/97 ........................................................... 800 800
Missouri State Health and Educational Facilities Authority
Revenue Bond for Washington University, Series A (A) (B)
4.100%, 07/01/97 ........................................................... 2,300 2,300
--------
Total Missouri 3,100
--------
</TABLE>
4
<PAGE>
<TABLE>
STATEMENT OF NET ASSETS (CONTINUED) COREFUND MONEY MARKET FUNDS
- ---------------------------------------------------------------------------------------------------------------------------
June 30, 1997
PAR VALUE
ELITE TAX-FREE RESERVE (000) (000)
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
MONTANA - 2.0%
Forsyth, Montana Pollution Control Revenue Bond for Portland
General Electric Project (A) (B) (C)
4.150%, 07/01/97 ........................................................... $1,000 $ 1,000
Forsyth, Montana Pollution Control Revenue Bond for Portland
General Electric Project, Series A (A) (B) (C)
4.150%, 07/01/97 ........................................................... 2,000 2,000
--------
Total Montana 3,000
--------
NEVADA - 3.5%
Clark County, Nevada Industrial Development
Revenue Bond Series C (A) (B)
4.200%, 07/01/97 ........................................................... 3,000 3,000
Nevada State Housing Authority Revenue Bond for Multi-
Unit Park Project, Series A (A) (B) (C)
4.250%, 07/01/97 ........................................................... 2,200 2,200
--------
Total Nevada 5,200
--------
NEW HAMPSHIRE - 0.4%
New Hampshire State Industrial Development Revenue Bond
for Oerlikon-Burlhe Project (A) (B) (C)
3.800%, 07/01/97 ........................................................... 600 600
--------
NEW YORK - 4.6%
New York City, New York GO (A) (B) (C)
5.500%, 07/01/97 ........................................................... 2,400 2,400
New York State Urban Development Corporate Revenue Bond
for Correctional Facilities Project Series C,
Pre-Refunded @ 102 AMBAC (D)
7.625%, 01/01/98 ........................................................... 1,175 1,220
New York State Energy Research and Development Authority
Pollution Control Revenue Bond (A) (B) (C)
3.600%, 12/01/97 ........................................................... 1,500 1,500
New York State Energy Research and Development Authority
Pollution Control Revenue Bond for Niagara Mohawk
Power Project Series A (A) (B)
5.450%, 07/01/97 ........................................................... 400 400
New York, New York General Obligation Series C (A) (B) (C)
5.500%, 07/01/97 ........................................................... 1,300 1,300
--------
Total New York 6,820
--------
</TABLE>
5
<PAGE>
<TABLE>
STATEMENT OF NET ASSETS (CONTINUED) COREFUND MONEY MARKET FUNDS
- -------------------------------------------------------------------------------------------------------------------
June 30, 1997
PAR VALUE
ELITE TAX-FREE RESERVE (000) (000)
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
NORTH CAROLINA - 4.0%
Lexington, North Carolina Medical Care Community Hospital
Revenue Bond for Memorial Hospital Project (A) (B)
4.200%, 07/01/97 ........................................................... $5,900 $ 5,900
--------
OHIO - 2.0%
Evandale, Ohio Industrial Development Authority
Revenue Bond (A) (B) (C)
3.900%, 07/01/97 ........................................................... 1,600 1,600
Ohio State Air Quality Revenue Bond (A) (B) (C)
4.000%, 07/01/97 ........................................................... 100 100
Ohio State Air Quality Revenue Bond, Series B (A) (B) (C)
5.500%, 07/01/97 ........................................................... 1,300 1,300
--------
Total Ohio 3,000
--------
OREGON - 3.5%
Port of Portland, Oregon Pollution Control Revenue Bond
for Reynold Metals Project (A) (B) (C)
4.100%, 07/01/97 ........................................................... 1,800 1,800
Port of St. Helens, Oregon Pollution Control
Revenue Bond (A) (B) (C)
4.050%, 07/01/97 ........................................................... 2,800 2,800
Umatilla County, Oregon Franciscan Health System
Revenue Bond, Series A (A) (B) (C)
4.100%, 07/01/97 ........................................................... 300 300
Umatilla County, Oregon Franciscan Health System
Revenue Bond, Series B (A) (B) (C)
4.100%, 07/01/97 ........................................................... 200 200
--------
Total Oregon 5,100
--------
PENNSYLVANIA - 19.6%
Allegheny County, Pennsylvania Revenue Bond for
Presbyterian University Hospital (A) (B)
4.200%, 07/01/97 ........................................................... 5,115 5,115
Beaver County, Pennsylvania Industrial Development Authority
Revenue Bond for Duquesne Light Company Project,
Series A (A) (B) (C)
4.050%, 07/01/97 ........................................................... 1,000 1,000
</TABLE>
6
<PAGE>
<TABLE>
STATEMENT OF NET ASSETS (CONTINUED) COREFUND MONEY MARKET FUNDS
- -------------------------------------------------------------------------------------------------------------------
June 30, 1997
FACE MARKET
AMOUNT VALUE
ELITE TAX-FREE RESERVE (000) (000)
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Beaver County, Pennsylvania Industrial Development Authority
Revenue Bond for Duquesne Light Company Project,
Series B (A) (B) (C)
4.050%, 07/01/97 ........................................................... $1,100 $1,100
Curwensville, School District TRAN
4.160%, 06/30/98 ........................................................... 840 841
Langhorne, Pennsylvania Saint Mary Hospital Authority Revenue
Bond for Franciscan Health Systems Project, Series C (A) (B)
4.000%, 07/01/97 ........................................................... 1,100 1,100
Langhorne, Pennsylvania Saint Mary Hospital Authority Revenue
Bond for Franciscan Health Systems, Series C (A) (B)
4.000%, 07/01/97 ........................................................... 600 600
Lehigh County, Pennsylvania Industrial Development Authority
Revenue Bond for Allegheny Electric Project, Series A (A) (B) (C)
4.000%, 07/01/97 ........................................................... 500 500
Montgomery County, Pennsylvania Series B GO
3.600%, 10/15/97 ........................................................... 315 315
North Penn, Pennsylvania School District GO
3.750%, 09/01/97 ........................................................... 1,615 1,615
Parkland School District, Pennsylvania GO (C)
4.000%, 09/01/97 ........................................................... 380 380
Pennsylvania State Higher Education Facilities Authority Revenue
Bond for Carnegie Mellon University Project, Series B (A) (B)
4.150%, 07/01/97 ........................................................... 800 800
Pennsylvania State Higher Educational Facilities Authority Revenue
Bond for Carnegie Mellon University Project, Series A (A) (B)
4.150%, 07/01/97 ........................................................... 1,500 1,500
Pennsylvania State University Revenue Bond, Series A
4.500%, 11/25/97 ........................................................... 1,750 1,756
Souderton, Pennsylvania Area School District Bond GO FGIC
3.750%, 09/01/97 ........................................................... 1,095 1,095
Temple University, Pennsylvania Commonwealth
System of Higher Education GO
4.750%, 05/18/98 ........................................................... 1,000 1,007
Upper Darby, School District TRAN
4.170%, 06/30/98 ........................................................... 1,756 1,759
</TABLE>
7
<PAGE>
<TABLE>
STATEMENT OF NET ASSETS (CONTINUED) COREFUND MONEY MARKET FUNDS
- -------------------------------------------------------------------------------------------------------------------
June 30, 1997
FACE MARKET
AMOUNT VALUE
ELITE TAX-FREE RESERVE (000) (000)
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Washington County, Pennsylvania Industrial Development
Authority Revenue Bond for Werrerau
Finance Company Project (A) (B) (C)
4.250%, 07/01/97 ........................................................... $2,500 $ 2,500
Washington County, Pennsylvania Lease Revenue Bond (A) (B) (C)
4.200%, 07/01/97 ........................................................... 1,500 1,500
York, Pennsylvania General Authority
Pooled Revenue Bond (A) (B) (C)
4.150%, 07/01/97 ........................................................... 4,350 4,350
--------
Total Pennsylvania 28,833
--------
PUERTO RICO - 1.2%
Puerto Rico Commonwealth TRAN, Series A
4.000%, 07/30/97 ........................................................... 1,800 1,801
--------
TEXAS - 9.6%
Grapevine, Texas Industrial Development Authority Revenue Bond
for American Airlines Project, Series B4 (A) (B) (C)
4.100%, 07/01/97 ........................................................... 100 100
Grapevine, Texas Industrial Development Corporation Revenue
Bond for American Airlines Project, Series B2 (A) (B)
4.100%, 07/01/97 ........................................................... 200 200
North Central, Texas Health Facility Development Corporation
Revenue Bond MBIA (A) (B)
4.100%, 07/01/97 ........................................................... 200 200
Nueces County, Texas Health Facilities Authority Revenue Bond
for Driscoll Children's Foundation Project (A) (B) (C)
4.200%, 07/01/97 ........................................................... 600 600
Port Corpus Christi Texas Industrial Development Corporation
Revenue Bond, Series A (A) (B) (C)
4.200%, 07/01/97 ........................................................... 2,000 2,000
Tarrant County, Texas Housing Finance Authority Revenue
Bond for Windcastle Project (A) (B) (C)
4.300%, 07/01/97 ........................................................... 1,034 1,034
Texas State Southwest, Texas Higher Education Authority
Revenue Bond for Southern Methodist University (A) (B) (C)
4.100%, 07/01/97 ........................................................... 5,000 5,000
Texas State TAN
4.750%, 08/29/97 ........................................................... 5,000 5,006
--------
Total Texas 14,140
--------
</TABLE>
8
<PAGE>
<TABLE>
STATEMENT OF NET ASSETS (CONTINUED) COREFUND MONEY MARKET FUNDS
- -------------------------------------------------------------------------------------------------------------------
June 30, 1997
FACE MARKET
AMOUNT VALUE
ELITE TAX-FREE RESERVE (000) (000)
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
VERMONT - 0.8%
Vermont State Student Loan Revenue Bond, Student Loan
Assistance Corporation Project (A) (B) (C)
3.800%, 07/01/97 ........................................................... $1,240 $ 1,240
--------
VIRGINIA - 5.3%
Virginia State Housing Revenue Bond
3.800%, 06/10/98 ........................................................... 3,000 3,000
Virginia State Peninsula Port Authority Revenue Bond for
Dominion Terminal Project, Series 1987C (A) (B) (C)
4.000%, 07/01/97 ........................................................... 2,005 2,005
Virginia State Peninsula Port Authority Revenue Bond for
Dominion Terminal Project, Series D (A) (B)
4.100%, 07/01/97 ........................................................... 2,100 2,100
Waynesboro, Virginia Residential Care Facilities
Revenue Bond (A) (B)
4.200%, 07/01/97 ........................................................... 775 775
--------
Total Virginia 7,880
--------
WEST VIRGINIA - 0.9%
Putnam County, West Virginia Industrial Development
Authority Revenue Bond for FMC
Corporation Project (A) (B) (C)
3.800%, 07/01/97 ........................................................... 1,300 1,300
--------
WYOMING - 8.8%
Gillette County, Wyoming TECP
3.650%, 07/07/97 ........................................................... 3,000 3,000
3.800%, 07/11/97 ........................................................... 1,200 1,200
3.800%, 09/10/97 ........................................................... 1,400 1,400
Lincoln County, Wyoming Pollution Control Revenue Bond
for Exxon Project (A) (B)
4.000%, 07/01/97 ........................................................... 4,200 4,200
Lincoln County, Wyoming Pollution Control Revenue Bond
for Exxon Project, Series D (A) (B)
4.100%, 07/01/97 ........................................................... 1,800 1,800
Lincoln County, Wyoming Resource Recovery Revenue Bond
for Exxon Project, Series C (A) (B) (C)
4.100%, 07/01/97 ........................................................... 300 300
Platte County, Wyoming Pollution Control
Revenue Bond, Series A (A) (B) (C)
4.200%, 07/01/97 ........................................................... 900 900
</TABLE>
9
<PAGE>
<TABLE>
STATEMENT OF NET ASSETS (CONCLUDED) COREFUND MONEY MARKET FUNDS
- -------------------------------------------------------------------------------------------------------------------
June 30, 1997
FACE MARKET
AMOUNT VALUE
ELITE TAX-FREE RESERVE (000) (000)
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Platte County, Wyoming Pollution Control
Revenue Bond, Series B (A) (B) (C)
4.200%, 07/01/97 ........................................................... $100 $ 100
--------
Total Wyoming 12,900
--------
TOTAL MUNICIPAL BONDS
(Cost $149,496) ................................................................................ 149,496
- -------------------------------------------------------------------------------------------------------------------
TOTAL INVESTMENTS - 101.4%
(Cost $149,496) ................................................................................... 149,496
- -------------------------------------------------------------------------------------------------------------------
OTHER ASSETS AND LIABILITIES, NET - (1.4%) ........................................................... (2,185)
- -------------------------------------------------------------------------------------------------------------------
NET ASSETS:
Portfolio Shares ($0.001 par value -- 250 million authorized) based
on 147,340,849 outstanding shares ................................................................. 147,341
Accumulated net realized loss on investments ......................................................... (30)
- -------------------------------------------------------------------------------------------------------------------
TOTAL NET ASSETS - 100.0% ............................................................................ $147,311
- -------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE AND REDEMPTION PRICE PER SHARE ....................................................... $1.00
- -------------------------------------------------------------------------------------------------------------------
</TABLE>
AMBAC -- AMERICAN MUNICIPAL BOND ASSURANCE COMPANY
FGIC -- FIANCIAL GUARANTY INSURANCE COMPANY
GO -- GENERAL OBLIGATION
MBIA -- MUNICIPAL BOND INVESTORS ASSURANCE
TECP -- TAX-EXEMPT COMMERCIAL PAPER
TAN -- TAX ANTICIPATION NOTES
TRAN -- TAX AND REVENUE ANTICIPATION NOTES
(A) VARIABLE RATE SECURITY -- THE RATE REFLECTED ON THE STATEMENT OF NET ASSETS
IS THE RATE IN EFFECT ON JUNE 30, 1997.
(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.
(D) PRE-REFUNDED SECURITY -- THE MATURITY DATE SHOWN IS THE PRE-REFUNDED DATE.
See accompanying notes to financial statements.
10
<PAGE>
STATEMENT OF OPERATIONS (000) COREFUND MONEY MARKET FUNDS
- --------------------------------------------------------------------------------
For the year ended June 30, 1997
ELITE TAX-FREE RESERVE+
- --------------------------------------------------------------------------------
INVESTMENT INCOME:
Interest ................................................... $3,966
------
EXPENSES:
Investment advisory fees ...................................... 222
Less investment advisory fees waived .......................... (196)
Administrative fees ........................................... 278
Less administrative fees waived ............................... (169)
Registration & filing fees .................................... 24
Printing ...................................................... 11
Taxes - other than income ..................................... 7
Professional fees ............................................. 6
Directors fees ................................................ 3
Transfer agent fees & expenses ................................ 2
Miscellaneous ................................................. 4
------
Total expenses ...................................................... 192
------
NET INVESTMENT INCOME ............................................... 3,774
------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS ................ $3,774
======
+THIS FUND WAS FORMERLY KNOWN AS THE FIDUCIARY TAX-FREE RESERVE.
See accompanying notes to financial statements.
11
<PAGE>
STATEMENT OF CHANGES IN NET ASSETS (000) COREFUND MONEY MARKET FUNDS
- --------------------------------------------------------------------------------
For the years ended June 30
ELITE TAX-FREE RESERVE+
- --------------------------------------------------------------------------------
1997 1996
---------- --------
OPERATIONS:
Net investment income .................. $ 3,774 $ 3,012
Net realized loss on securities sold ... -- (5)
---------- ---------
Net increase in net assets resulting
from operations ..................... 3,774 3,007
---------- ---------
DIVIDENDS DISTRIBUTED FROM:
Net investment income .................. (3,774) (3,012)
Net realized gains ..................... -- --
---------- ---------
Total dividends distributed ............ (3,774) (3,012)
---------- ---------
CAPITAL SHARE TRANSACTIONS:
Proceeds from shares issued ............ 226,783 224,591
Cost of shares redeemed ................ (165,949) (210,702)
---------- ---------
Increase in net assets derived from
capital share transactions .......... 60,834 13,889
---------- ---------
NET INCREASE IN NET ASSETS ................... 60,834 13,884
NET ASSETS:
Beginning of period .................... 86,477 72,593
---------- ---------
End of period .......................... $147,311 $ 86,477
========== ---------
SHARES ISSUED AND REDEEMED:
Shares issued .......................... 226,783 224,591
Shares redeemed ........................ (165,949) (210,702)
---------- ---------
Increase in net shares derived from
capital share transactions .......... 60,834 13,889
---------- ---------
OUTSTANDING SHARES:
Beginning of period .................... 86,507 72,618
---------- ---------
End of period .......................... 147,341 86,507
========== =========
+THIS FUND WAS FORMERLY KNOWN AS THE FIDUCIARY TAX-FREE RESERVE.
See accompanying notes to financial statements.
12
<PAGE>
<TABLE>
FINANCIAL HIGHLIGHTS COREFUND MONEY MARKET FUNDS
- ------------------------------------------------------------------------------------------------------------------------------------
June 30, 1997
ELITE TAX-FREE RESERVE+
- ------------------------------------------------------------------------------------------------------------------------------------
For a Share Outstanding Throughout the Period
RATIO RATIO
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 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)
--------- ---------- ----------- --------- ------ --------- ----------- ---------- ----------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
For the year ended
June 30, 1997 $1.00 0.03 (0.03) $1.00 3.42% $147,311 0.17% 3.39% 0.50% 3.06%
For the year ended
June 30, 1996 $1.00 0.03 (0.03) $1.00 3.51% $ 86,477 0.16% 3.44% 0.76% 2.84%
For the year ended
June 30, 1995 $1.00 0.03 (0.03) $1.00 3.41% $ 72,593 0.19% 3.37% 0.83% 2.73%
For the year ended
June 30, 1994 $1.00 0.02 (0.02) $1.00 2.32% $ 78,219 0.17% 2.29% 0.82% 1.64%
For the year ended
June 30, 1993 $1.00 0.02 (0.02) $1.00 2.48% $ 48,424 0.19% 2.45% 0.83% 1.81%
For the period ended
June 30, 1992 (1) $1.00 0.02 (0.02) $1.00 1.50%* $66,158 0.17% 3.00% 0.89% 2.28%
- ---------------------
</TABLE>
* RETURN IS FOR THE PERIOD INDICATED AND HAS NOT BEEN ANNUALIZED.
(1) THE ELITE TAX-FREE RESERVE COMMENCED OPERATIONS ON NOVEMBER 19, 1991.
RATIOS FOR THIS PERIOD HAVE BEEN ANNUALIZED.
+ THIS FUND WAS FORMERLY KNOWN AS THE FIDUCIARY TAX-FREE RESERVE.
See accompanying notes to financial statements.
13
<PAGE>
NOTES TO FINANCIAL STATEMENTS COREFUND MONEY MARKET FUNDS
- --------------------------------------------------------------------------------
June 30, 1997
1. ORGANIZATION
The CoreFund Elite 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:
Equity Index Fund Treasury Reserve
Core Equity Fund Cash Reserve
Growth Equity Fund Tax-Free Reserve
Special Equity Fund Elite Treasury Reserve
International Growth Fund Elite Cash Reserve
Balanced Fund Elite Tax-Free Reserve
FIXED INCOME FUNDS:
Short Term Income Fund
Short-Intermediate Bond Fund
Government Income Fund
Bond Fund
Global Bond Fund
Intermediate Municipal Bond Fund
Pennsylvania Municipal Bond Fund
New Jersey Municipal Bond Fund
The financial statements included herein present only those of the Elite
Tax-Free Reserve. 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 Fund's prospectus provides
a description of the Fund's investment objectives, policies and strategies.
2. SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies followed by the
Elite Tax-Free Reserve.
SECURITY VALUATION -- Investment securities of the Elite Tax-Free Reserve 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.
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
14
<PAGE>
NOTES TO FINANCIAL STATEMENTS (CONTINUED) COREFUND MONEY MARKET FUNDS
- --------------------------------------------------------------------------------
June 30, 1997
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 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 April 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 Elite Tax-Free
Reserve. For the year ended June 30, 1997, CoreStates Advisers earned $222,334
in investment advisory fees, of which $196,321 was voluntarily waived in order
to assist the Portfolio in maintaining a competitive expense ratio.
CoreStates Bank serves as Custodian to the Company. Under the Custodian
Agreement, CoreStates Bank holds each Fund's securities and cash items, makes
receipts and disbursements of money on behalf of each Fund, collects and
receives all income and other payments and distributions on account of the
Funds' securities and performs other related services. CoreStates Bank may, at
its discretion and at its own expense, open and maintain a sub-custody account
or employ a sub-custodian on behalf of the Funds investing exclusively in the
United States and may, with the Funds' Board approval and at the expense of the
Funds, employ sub-custodians on behalf of the Funds who invest in foreign
countries provided that CoreStates Bank shall remain liable for the performance
of all of its duties under the Custodian Agreement.
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 Elite Tax-Free Reserve. Such a fee is computed daily and
paid monthly. For the year ended June 30, 1997, administrative fees totaled
$277,939 of which $168,848 was voluntarily waived in order to assist the Fund in
maintaining a competitive expense ratio.
15
<PAGE>
NOTES TO FINANCIAL STATEMENTS (CONCLUDED) COREFUND MONEY MARKET FUNDS
- --------------------------------------------------------------------------------
June 30, 1997
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 Investments Distribution Co., 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 30,1997, the revenue sources by purpose were as follows:
% OF PORTFOLIO
INVESTMENTS
--------------
REVENUE INSTRUMENTS
Education Bonds ....................... 10%
Hospital & Health Care Bonds .......... 12
Housing Bonds ......................... 5
Industrial Bonds ...................... 10
Other Bonds ........................... 11
Pollution Control Bonds ............... 12
Transportation Bonds .................. 4
Utility Bonds ......................... 3
TAX EXEMPT COMMERCIAL PAPER .................... 17
GENERAL OBLIGATIONS ............................ 6
TAX & REVENUE ANTICIPATION NOTES ............... 10
----
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.
16
<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, 1997, the Elite 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>
(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
------------ ------------ ------------- ------------- ------------ -------- ----------
<S> <C> <C> <C> <C> <C> <C>
Elite Tax-Free Reserve 0% 100% 100% 0% 100% 0%
</TABLE>
(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.
Please consult your tax department for proper treatment of this information.
17
<PAGE>
REPORT OF INDEPENDENT AUDITORS
Board of Directors and Shareholders
CoreFunds, Inc.
We have audited the accompanying statement of net assets of the CoreFund Elite
Tax-Free Reserve of CoreFunds, Inc. (the "Fund") as of June 30, 1997, 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 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
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, 1997 and confirmation of securities not held by the
custodian by correspondence with brokers. An audit also includes assessing the
accounting principles used and significant estimates made by management, as well
as evaluating the overall financial statement presentation. We believe that our
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
Fund at June 30, 1997, 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 herein, in conformity with generally accepted accounting principles.
Philadelphia, Pennsylvania
August 12, 1997 /S/Ernst & Young LLP
18
<PAGE>
NOTES
<PAGE>
<PAGE>
<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-058-02
