<PAGE>
[COREFUND LOGO]
1996
SEMI-ANNUAL REPORT
TO OUR
SHAREHOLDERS
FOR SIX MONTHS ENDING
DECEMBER 31, 1996
COREFUNDS...INVESTING OUR EXPERIENCE IN YOUR FUTURE.
[Graphic]
Photo of Trees
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[GRAPHIC]
COREFUND LOGO
FUND TRADING
FUND PORTFOLIOS BY ASSET CLASS SYMBOL
(Y SHARES)
CORE EQUITY FUNDS
Equity Index N/A
Core Equity CVEAX
Growth Equity CRGEX
Special Equity CSEQX
International Growth CFIGX
BALANCED FUNDS
Balanced CBAAX
FIXED INCOME FUNDS
Short Term Income COSTX
Short-Intermediate Bond CFBDX
Government Income N/A
Bond CONIX
Global Bond CGBIX
TAX-EXEMPT INCOME FUNDS
Intermediate Municipal Bond N/A
Pennsylvania Municipal Bond N/A
New Jersey Municipal Bond N/A
MONEY MARKET FUNDS
Treasury Reserve CRTXX
Cash Reserve CRCXX
Tax-Free Reserve CRXXX
TABLE OF CONTENTS
Message to Our Shareholders.................. 1
Choosing the Right Fund.......................2
CSIA Management Profile.......................4
Fund Descriptions.............................5
Investment Advisers' Review.................. 8
Understanding Your
Semi-Annual Report........................11
Managers' Discussion
of Fund Performance.......................14
Financial Statements..........................34
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).
<PAGE>
MESSAGE
TO OUR
SHAREHOLDERS
COREFUND
DECEMBER 31, 1996
We are pleased to report that the second half of 1996 proved to be a
positive period for the CoreFund Family of Mutual Funds. Favorable economic
fundamentals continued to support gains for equity, fixed income, and money
market investors. As always, your fund managers worked diligently to take
advantage of market opportunities.
FULLY MERGED We are also pleased to announce that during the last six months, we
have seen the benefits of our merger of Conestoga Fund holdings into the
CoreFund Family. This accomplishment has enabled us to expand the scope of
mutual funds available for our shareholders and further enhance our experienced
investment management team with additional professionals. We're happy with the
results of the merger and look forward to additional benefits in the years to
come.
DEDICATED TO EDUCATION Another area of special focus has been our continued
commitment to investor communications and education. We are proud to be among
the first in the industry to provide shareholders, and potential shareholders,
with a "plain English" prospectus. Designed to make learning about your
investments simpler, the prospectus explains technical financial terms and
presents fund information in an easy-to-follow format. Look for a mailing of the
new prospectus in the Spring.
Easy access to all of our funds and services is also available through our
voice-response unit. We encourage you to use this resource whenever you have a
question. Just call 1-800-355-CORE to quickly find the answers you need, from
8:30 a.m. to 8:00 p.m., Monday through Friday.
A POSITIVE OUTLOOK Looking ahead in 1997, we expect to see economic fundamentals
remain generally positive. We believe that the future is bright for investors
who diversify their holdings and remain focused on the potential long-term
rewards of mutual fund investing.
We thank you for the privilege of helping you to reach your financial
goals. We will continue to explore even more ways to make investing with the
CoreFund Family of Funds an easy, efficient, and pleasant experience. We look
forward to serving you during 1997 and into the next century.
/s/
EMIL J. MIKITY
CHAIRMAN
[GRAPHIC]
PHOTO OF EMIL J. MIKITY
1
<PAGE>
CHOOSING
THE
RIGHT FUND
MUTUAL FUND CATEGORIES
STABILITY Using money market funds, this category seeks to provide greater
safety and stability of principal while providing current income. Funds are
built around high-quality, short-term securities with remaining maturities of 13
months or less.
INCOME This category includes intermediate- and long-term taxable or tax-exempt
bond funds. Depending on the types of bonds in which the funds invest, these
funds seek to provide a moderate-to-high level of current income, while aiming
to preserve an investor's original investment value.
INTERNATIONAL INCOME Global bond funds invest in both U.S. and foreign debt
securities. These funds seek capital appreciation and current income. This
category offers potentially higher returns than domestic bonds, but with less
stability of principal.
GROWTH This category includes stock and balanced funds designed to pursue
long-term growth. Balanced funds can invest in diversified portfolios of bonds
and money market instruments, as well as stocks. Although stocks historically
have offered the greatest growth potential, they have fluctuated more in price
from day to day.
INTERNATIONAL GROWTH This category includes international stock funds that
invest in common stocks and other equity securities of companies located outside
the United States. Compared with domestic stocks, these funds offer potentially
higher returns, but carry special risks.
STABILITY/RETURN SPECTRUM
[Graphic]
2
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COREFUND PORTFOLIOS
*TREASURY RESERVE
*CASH RESERVE
*TAX-FREE RESERVE
*SHORT TERM INCOME
*SHORT-INTERMEDIATE BOND
*GOVERNMENT INCOME
*BOND
*INTERMEDIATE MUNICIPAL BOND
*PENNSYLVANIA MUNICIPAL BOND
*NEW JERSEY MUNICIPAL BOND
*GLOBAL BOND
*BALANCED
*EQUITY INDEX
*CORE EQUITY
*GROWTH EQUITY
*SPECIAL EQUITY
*INTERNATIONAL GROWTH
EACH INVESTOR HAS A UNIQUE NOTION OF WHAT THE "RIGHT" MIX OF RISK AND
REWARD SHOULD BE. YOU MAY, FOR EXAMPLE, BE AN INVESTOR WHO SEEKS TO MAINTAIN THE
HIGHEST POSSIBLE DEGREE OF STABILITY IN YOUR PORTFOLIO, AND THEREFORE FAVOR
MONEY MARKET SECURITIES. OR, YOU MAY BE AT THE OPPOSITE END OF THE SPECTRUM
SOMEONE WHO IS WILLING TO ACCEPT AND TOLERATE HIGHER DEGREES OF RISK IN EXCHANGE
FOR THE POTENTIAL OF HIGHER RETURNS OFFERED BY STOCKS. BECAUSE HIGHER RETURNS
GENERALLY MEAN GREATER PRICE FLUCTUATIONS, INVESTMENT DECISIONS WILL ALWAYS
REVOLVE AROUND THIS TRADEOFF.
TO HELP YOU ALIGN YOUR PORTFOLIO'S PARTICULAR BLEND OF STABILITY AND RETURN
WITH YOUR INVESTMENT PREFERENCES, COREFUNDS STRIVES TO OFFER AN EVENLY BALANCED
ARRAY OF INVESTMENT OPTIONS.
AS ILLUSTRATED AT LEFT, THE COREFUND FAMILY OF FUNDS INCLUDES DISTINCT
CATEGORIES THAT MATCH UP WITH THE VARIOUS STAGES ALONG THE STABILITY/RETURN
SPECTRUM. USING THIS GUIDE, YOU CAN FASHION A WELL-ROUNDED, DIVERSIFIED
PORTFOLIO THAT HELPS YOU ACHIEVE YOUR INDIVIDUAL INVESTMENT GOALS WHILE
MAINTAINING A COMFORTABLE LEVEL OF RISK. IN THIS WAY, COREFUNDS' EXPERTISE AND
EXPERIENCE CAN BEST BE USED TO SHAPE YOUR INVESTMENT FUTURE.
FINDING
THE RIGHT
MIX
OF RISK
AND
REWARD.
3
<PAGE>
CSIA
MANAGEMENT
PROFILE
DECEMBER 31, 1996
MORE ABOUT THE INVESTMENT ADVISER TO THE COREFUNDS.
CoreFunds, Inc. (CoreFunds) is a family of 20 mutual funds* managed by
CoreStates Investment Advisers, Inc. (CSIA), an affiliate of CoreStates
Financial Corp. CoreStates is one of the nation's largest and most respected
banking institutions, with a commitment to exceptional service dating back
nearly two centuries. As the investment adviser to CoreFunds, CSIA is dedicated
to providing professional investment management to CoreFund investors.
For years, CSIA has served the financial needs of institutions,
corporations, municipalities, and individual investors. And today, it manages
more than $17.6 billion in assets, including approximately $4 billion in the
CoreFund Family of Mutual Funds.
Each fund is guided by a professional manager who is responsible for
maintaining the fund's investment objectives through research, analysis, and
day-to-day investment decisions.
A full range of quality funds, professional management, clear communication
and convenience are all essential elements of what CoreFunds can invest in your
future.
[Graphic]
CoreStates Logo
THE RIGHT CHOICES FOR A WELL-ROUNDED INVESTMENT PROGRAM.
The CoreFund Family offers a diverse range of high-quality mutual fund
investment options designed to help you reach your financial goals.
These include: the capital appreciation potential of equity and balanced
funds; the income potential of fixed income funds; the tax advantages of
municipal bond funds; the stability of money market funds; and the expanded
reach and potential of international funds. By allowing free exchange among all
funds, CoreFunds makes it easy for you to adapt your individual investment
program to your changing needs.
*INCLUDES THREE ELITE FUNDS WHICH ARE PRESENTED IN A SEPARATE REPORT.
4
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FUND
DESCRIPTIONS
DECEMBER 31, 1996
COREFUND FAMILY OF MUTUAL FUNDS
EQUITY (STOCK) FUNDS
INVESTING PRIMARILY IN SECURITIES SUCH AS COMMON STOCKS.
THESE FUNDS SEEK MAXIMUM LONG-TERM GAINS THROUGH CAPITAL
APPRECIATION.
OBJECTIVE FOR AN INVESTOR WHO...
*EQUITY Seeks to achieve price ...is investing for the
INDEX FUND and yield performance long term and wants to know
similar to the S&P 50 that investment results
Index Composite Index. will be substantially in line
with the performance of the stock
market as a whole.
*CORE EQUITY Seeks growth of capital ...seeks growth of capital over
FUND by investing primarily the long term and is willing to
in a diversified take higher risk for potentially
portfolio of common higher returns than from bond
stocks. funds or money market funds.
*GROWTH Seeks growth of capital ...seeks capital appreciation
EQUITY FUND and an increasing flow of over the long term and is
dividends from a willing to take higher risk for
diversified portfolio of potentially higher returns than
common stocks. from bond or money market funds.
*SPECIAL Seeks capital growth by ...seeks growth of capital over
EQUITY FUND investing principally in the long term and is willing
a diversified portfolio to take higher risk and
of common stocks. experience greater volatility
for potentially higher returns.
*INTERNATIONAL Seeks long-term growth of ...seeks growth of capital over
GROWTH FUND capital by investing in a the long term and is willing to
portfolio of common stock assume the higher risks inherent
diversified by country in foreign investing in exchange
and industry. for potentially higher returns.
BALANCED FUND
INVESTING IN BOTH COMMON STOCKS AND FIXED INCOME. THIS FUND
SEEKS TO PROVIDE TOTAL RETURN WHILE PRESERVING CAPITAL.
*BALANCED Seeks to provide total ...wants to participate in a
FUND return while preserving diversified portfolio program
capital. that is continuously and
professionally managed and is
willing to take higher risk for
potentially higher returns than
from bond or money market funds.
5
<PAGE>
FUND
DESCRIPTIONS
(CONTINUED)
DECEMBER 31, 1996
FIXED INCOME (BOND) FUNDS
INVESTING PRIMARILY IN INTEREST-PAYING SECURITIES ISSUED BY
THE U.S. GOVERNMENT AND ITS AGENCIES, AS WELL AS CORPORATE
BONDS AND COMMERCIAL PAPER. THESE FUNDS SEEK TO PROVIDE A
REGULAR STREAM OF CURRENT INCOME.
OBJECTIVE FOR AN INVESTOR WHO...
*SHORT TERM Seeks consistent current ...seeks a higher yield than
INCOME FUND income and relative can be expected from either
stability of principal by cash management funds or other
investing primarily in a short-term investments. This fund
diversified portfolio of will have less volatility than
investment-grade debt most longer-term bond funds.
securities with expected
or remaining maturities
of three years or less.
*SHORT- Seeks consistent current ...seeks a higher yield than can
INTERMEDIATE income by investing be expected from other short-term
BOND FUND principally in a investments but would like to
diversified portfolio avoid the wide swings normally
of debt securities with attributable to long-term bond
an expected average funds.
weighted maturity of
two-to-five years.
*GOVERNMENT Seeks to provide current ...wants investment performance
INCOME FUND income while preserving and can tolerate the associated
principal value and risk from an actively managed
maintaining liquidity. portfolio of taxable fixed
income securities and wants no
credit risk.
*BOND Seeks to maximize long- ...wants investment performance
FUND term total return by and can tolerate the associated
investing principally in risk from an actively managed
a diversified portfolio portfolio of taxable fixed
of debt securities. income securities.
*GLOBAL Seeks to provide capital ...seeks capital appreciation and
BOND FUND appreciation and current current income over the long
income through investment term, is willing to assume the
in fixed income securities higher risks inherent in foreign
of the United States and investing in exchange for
foreign issuers. potentially higher returns and
seeks benefits of international
diversification.
6
<PAGE>
COREFUND FAMILY OF MUTUAL FUNDS
TAX-EXEMPT INCOME FUNDS
INVESTING IN GENERAL OBLIGATION BONDS, REVENUE BONDS, AND
MUNICIPAL NOTES, ALL OF WHICH FINANCE PUBLIC WORKS AND
SERVICES. THESE FUNDS SEEK TO PROVIDE INCOME THAT IS
GENERALLY EXEMPT FROM FEDERAL INCOME TAX AND IN SOME CASES
FROM STATE AND LOCAL TAXES.
OBJECTIVE FOR AN INVESTOR WHO...
*INTERMEDIATE Seeks a high level of ...wants a conservative
MUNICIPAL income exempt from investment and seeks after-tax
BOND FUND federal income tax yields while protecting
consistent with the principal.
preservation of capital.
*PENNSYLVANIA Seeks a high level of ...seeks a moderate rate of tax-
MUNICIPAL current income consistent free income with less price
BOND FUND with the preservation of volatility than long term
capital from income that municipal bonds and wants
is exempt from Pennsylvania enhanced investment performance
state and local personal from an actively managed
income tax. portfolio of tax-free securities.
*NEW JERSEY Seeks a high level of ...seeks a moderate rate of tax-
MUNICIPAL current income consistent free income with less price
BOND FUND with the preservation of volatility than long term
capital from income that is municipal bonds and wants
exempt from New Jersey state enhanced investment performance
and local personal from an actively managed
income tax. portfolio of tax-free securities.
MONEY MARKET FUNDS
INVESTING PRIMARILY IN QUALITY SHORT-TERM SECURITIES OF THE U.S.
GOVERNMENT AND ITS AGENCIES, COMMERCIAL PAPER, CERTIFICATES OF
DEPOSIT, AND REPURCHASE AGREEMENTS. THESE FUNDS SEEK TO MAINTAIN
A CONSTANT SHARE PRICE OF $1.00 WITH INCOME VARYING ACCORDING TO
MARKET CONDITIONS AND INTEREST RATES. HOWEVER, MONEY MARKET FUNDS
ARE NOT INSURED OR GUARANTEED BY THE U.S. GOVERNMENT AND THERE
CAN BE NO ASSURANCE THAT THESE FUNDS WILL BE ABLE TO MAINTAIN A
STABLE NET ASSET VALUE OF $1.00.
*TREASURY
RESERVE FUND Seeks current income with ...seeks liquidity of assets,
liquidity and stability of current income, and stability of
principal, with investments principal.
exclusively in U.S.
Treasury obligations.
*CASH Seeks current income with ...seeks liquidity of assets,
RESERVE FUND liquidity and stability current income, and stability of
of principal. principal.
*TAX-FREE Seeks current income that ...seeks current income exempt
RESERVE FUND is exempt from regular from federal income taxes, and
income tax with liquidity desires stability of principal
and stability of principal. and liquidity of assets.
7
<PAGE>
CORESTATES
INVESTMENT
ADVISERS'
REVIEW
DECEMBER 31, 1996
COREFUND INVESTMENT REVIEW
It was another good year for mutual fund investors. Equity market gains for
1996 rivaled 1995 gains. During the last six months of 1996 (the first half of
CoreFund's fiscal year), continued favorable economic fundamentals drove
financial asset prices higher. Low inflation and sustainable real growth
encouraged stock and bond market investors, even in spite of a brief market
selloff in July.
U.S. equities, as measured by the Standard & Poor's 500 index (S&P 500
Index), provided investors with a total return of 22.94% in 1996. The first half
of the year provided approximately a 10% return with a 12% return in the second
half (and, 10% is considered a good return for most full years!).
The bond market, as measured by the Salomon Brothers Broad Bond Index,
showed a total return of 3.62%. After interest rates rose sharply in early 1996,
the bond market rebounded in the second half of the year.
International equities lagged again with foreign stocks for U.S.
dollar-based investors, as measured by the Morgan Stanley Capital International
EAFE Index, providing a total return of 6.06%. Most foreign stock markets had
greater returns than this in "local" currency terms, but the stronger U.S.
dollar reduced returns for U.S. dollar-based investors.
Global interest rates were generally stable during 1996, with returns
exceeding those earned on U.S. fixed income securities. The total rate of return
on global bonds as measured by the J.P. Morgan Global Bond Index was 4.39%.
EQUITY REVIEW
We are pleased that the wide range of CoreFund equity funds achieved their
objectives in 1996. Overall, stock prices had striking gains throughout the
year, picking up right where they ended in 1995.
[PHOTO OF MARK E. STALNECKER]
MARK E. STALNECKER
CHAIRMAN, CSIA
[BAR CHART]
8
<PAGE>
COREFUND
Following a 10.1% return for the six months ended June 30, 1996, the broad stock
market (S&P 500 Index) proved resistant to a July selloff.
Despite mid-year fears that a strong economy would generate inflationary
pressures and lead to interest rate "tightening" by the Federal Reserve, the
pace of economic growth slowed and interest rates fell during the second half.
Corporate profit growth slowed, too, but with earnings rising and interest rate
pressures non-existent, stock investors continued to move new cash into equity
securities. This cash helped the market absorb a record level of initial public
offerings and encouraged mutual fund managers to hold minimal cash positions in
their portfolios.
BOND AND MONEY MARKET REVIEW
Bond market investors experienced a volatile year in 1996, especially those
invested in long-term (maturities over 10 years) issues. Interest rates on
30-year U.S. Treasury bonds rose from 6% at year end 1995 to over 7% in July
1996 but then fell to complete the year at about 6.6%.
This move to higher rates caused price declines, and thus fixed income
investors did not experience the strong returns realized by stock investors.
Nevertheless, the market provided a small positive return in the last six months
of 4.94% as measured by the Salomon Brothers Broad Bond Index.
In spite of a reduction in the Federal funds rate to 5.25% in January (a
cut of .25%), market participants became concerned as the year wore on that the
stronger than expected economy would force rates higher. By midyear, most
participants expected the Federal Reserve Board to raise the funds rate and the
expectation created a market top in July when 30-year bond yields exceeded 7%.
The economy began to slow down after midyear. This reassured investors that
inflation would not accelerate, and bond yields fell steadily. Long Treasury
yields dropped below 6.5% following the November election which saw the return
of Republican Congressional majorities and President Clinton. The combination
was viewed with relief after concerns that Clinton coattails would sweep in new
Democratic majorities in the House and Senate.
As a result, 1996 was a year of stable money market rates (with Federal
funds constant at 5.25%) coupled with consider able volatility in longer-term
securities.
(CONTINUED)
9
[Graphic]
Line Chart
<PAGE>
CORESTATES
INVESTMENT
ADVISERS'
REVIEW
(CONCLUDED)
DECEMBER 31, 1996
INTERNATIONAL REVIEW
In 1996 international equities again provided returns lower than the U.S.
markets for U.S. dollar-based investors. Much of the problem was in the Asian
region, where the important Japanese market suffered a 6% decline in yen prices,
but a 16% decline for U.S. dollar-based investors due to the U.S. dollar's
strength.
Most European markets were strong. However, returns for U.S. investors were
again hurt by weak local currencies. Sluggish growth in most economies was
offset by low inflation and stronger bond markets. International equities, as
measured by the MSCI EAFE index, provided a total return of 6.06% for the
calendar year 1996, and 1.48% in the first half of the CoreFunds' fiscal year.
OVERALL MARKET OUTLOOK
Economic fundamentals continue to look positive for financial assets over
the long term. However, we believe slowing corporate profit growth will make
1997 a challenging year for stocks.
We anticipate relative stability in U.S. interest rates over the year
ahead. And, we are encouraged by the international trend of lower inflation and
freer economic trade, which bodes well for international economic stability.
As always, we recommend that you keep a long-term perspective when making
your investment choices. Stay the course by adhering to the mix of stocks,
bonds, and cash equivalents that best meets your individual long-term needs.
Attempting to time moves in and out of the market in anticipation of short-run
price movements has generally proven a losing proposition.
Please read the pages that follow. They contain reports by our CoreFund
portfolio managers. I believe you will find them informative.
/s/
MARK E. STALNECKER
CHAIRMAN, CSIA
10
<PAGE>
WHAT
YOU NEED
TO KNOW COREFUND
DECEMBER 31, 1996
This report provides you with a manager's discussion of fund performance
for each fund in the CoreFund Family of Mutual Funds. Each manager's commentary
presents a snapshot of fund performance for the six month period ending December
31, 1996. The managers' discussions offer you insight into the investment
strategies they are employing, and examine the market forces that are expected
to prevail during the first half of 1997.
QUICK FUND FACTS Accompanying each commentary are boxes highlighting
important fund information:
*When the fund was opened
*Portfolio size
*Number of shares outstanding
*Average weighted maturity of the fund's fixed income holdings
(where applicable)
*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 in the case of the CoreFund Government Income Fund, how the fund is
divided among various lengths of maturity.
PERFORMANCE DATA EQUITY AND FIXED INCOME FUNDS
The performance box shows the 6-month cumulative total return, as of
December 31, 1996, for both the institutional class (Y) shares and individual
class (A) shares. (Performance numbers in this report may differ slightly from
those shown in other year end reports due to late trading activity). For equity
funds, also shown is the change in Net Asset Value (NAV) for each series over
the six month period from July 1, 1996 to the end of the year. For fixed income
funds, the 30-day yield and the NAV as of December 31, 1996 are shown.
Information for both Y and A classes of each fund is compared with the most
commonly used industry index to show how the Fund's performance stacks up
against its peers.
For the class A shares, the performance information has been adjusted to
reflect the 12b-1 fee associated with these shares. The class A data has also
been divided to show performance with and without the assessment of the maximum
sales charge, also known as the load.
PERFORMANCE DATA MONEY MARKET FUNDS
The performance boxes show six month total return, 7-day and 30-day yields
for classes Y and C as compared to the industry benchmark that the fund manager
uses to measure performance.
- --------------------------------------------------------------------------------
As you review the information in these Fund reports, please remember that
past performance of the portfolios does not predict future results. Also,
investment return and principal value will fluctuate so that an investor's
shares, when redeemed, may be worth more or less than their original cost.
UNDERSTANDING
YOUR
SEMI-ANNUAL
REPORT
11
<PAGE>
WHAT
YOU NEED
TO KNOW
(CONTINUED)
DECEMBER 31, 1996
Various terms used in the fund reports are defined as follows:
CLASS Y/CLASS A & C CoreFund shares are currently available in three different
classes. Class Y shares are for institutional investors and 401(k) plan
participants. Class A (fixed income and equity) and Class C (money market)
shares are for individuals, and offer added shareholder servicing features, as
well as some additional fees.
LOAD refers to fees that may be associated with a particular Fund. Where loads
are shown, both sales charges (incurred when purchasing shares) and 12b-1 fees
have been included. The 12b-1 fee, named after the Securities and Exchange
Commission rule that permits it, is sometimes assessed to recover costs incurred
through advertising, commission payments to brokers, or other expenses
associated with marketing and distributing a fund.
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 averages performance at a constant
rate for each year over a given period. In the performance boxes for money
market funds, the six month total return is shown on a "cumulative" basis -
i.e., the return for the period from July 1, 1996 to December 31, 1996.
NET ASSET VALUE (NAV) reflects the market value of one share of the fund on the
date listed. This figure is determined by taking the fund's total assets -
securities, cash, and any accrued earnings - and then deducting liabilities and
dividing by the number of shares outstanding.
Money market funds seek to maintain a stable NAV of $1.00, although there
is no guarantee they will always do so. There are three money market portfolios
in the CoreFund Family of Mutual Funds : Cash Reserve, Treasury Reserve, and
Tax-Free Reserve.
YIELD refers to the rate of return for an investment portfolio, expressed as a
percentage. Yield for mutual funds is established by a formula set by the
Securities and Exchange Commission. A fund's yield will fluctuate and reflect
the portfolio's net earning power after fund expenses have been paid.
MATURITY refers to the period over which a bond or other fixed income security
must be held to earn the full yield offered by the issuer of the security.
Average weighted maturity describes the average period of maturity in a
portfolio that contains fixed income securities of varying maturities.
DEFINING
THE
TERMS
12
<PAGE>
COREFUND
DISTRIBUTIONS are the payments of income and capital gains to shareholders of a
mutual fund. For tax purposes, capital gains distributions are calculated
separately from interest income or dividends.
INDEX is a statistical composite of selected stocks or bonds that is used to
measure price fluctuations in these markets. For example, Standard & Poor's 500
Composite Index (S&P 500 Index) is a popular measurement of the stock market's
performance based on prices of 500 common stocks listed on the New York and
American stock exchanges or traded over the counter.
FACE VALUE is the amount the bondholder receives when the bonds are redeemed at
maturity. Interest payments are based on the face value (also called "par
value").
VOLATILITY is a description of how much the price of securities, such as mutual
funds, moves up or down within a given period.
DOLLAR-COST AVERAGING is 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 they are low.
Diversification is the spreading of one's investment risk by putting assets in a
wide-ranging portfolio of securities, such as a mutual fund.
HEDGE is a defensive investment strategy, often involving the buying or selling
of options, to offset possible losses and thereby reduce risk.
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.
13
<PAGE>
MANAGERS'
DISCUSSION
OF
FUND
PERFORMANCE
DECEMBER 31, 1996
EQUITY INDEX FUND
SEMI-ANNUAL RESULTS:
*This Fund returned 11.70%, after expenses, for the six months ending
December 31, 1996.
*The Fund's benchmark, the S&P 500 Composite Index (S&P 500 Index),
returned 11.68% for the same period.
*Assets in the Fund grew 19% from $166.4 million to $197.3 million during
the six months.
COMMENTARY:
The CoreFund Equity Index Fund remains an attractive choice for investors
who want to
[Graphic]
Photo of Pencils and Data
harness the potential long-term returns of the equity market without the risks
often associated with specific investment management styles. One way
that the Fund works to manage risk is by investing in a well-diversified group
of large, well known companies. These are primarily the companies represented in
the S&P 500 Index.
For efficiency purposes, the Fund has historically owned significantly
fewer than 500 names. When the Fund was small, this strategy played an important
role in minimizing the impact of transaction costs.
In an effort to focus more on tracking error, we greatly expanded the
number of issues held last year through a major one-time rebalancing. We also
took steps to minimize the cash position held in the Fund. The benefits were
demonstrated during the past few quarters with a meaningfully lower tracking
error.
QUICK FUND FACTS - EQUITY INDEX
-------------------------------
INCEPTION DATE: February 14, 1985
PORTFOLIO SIZE: $197.3 million
SHARES OUTSTANDING: 6,304,339 (Y&A COMBINED)
TOP FIVE HOLDINGS (AS OF DECEMBER 31, 1996)
-------------------------------------------
% OF FUND INVESTMENTS
---------------------
General Electric 2.9%
Coca-Cola Company 2.3%
Exxon Corporation 2.2%
Intel Corporation 2.0%
Microsoft Inc. 1.8%
PERFORMANCE (AS OF DECEMBER 31, 1996)
- -------------------------------------------------------------------
6-MONTH NAV NAV
TOTAL RETURN 6/30/96 12/31/96
------------ ------- --------
(CUMULATIVE)
Class Y 11.70% $28.47 $31.29
Class A w/o Load 6.85 - 31.28
Class A w/Load 0.98 - 33.10
S&P 500 Index 11.68 - -
14
<PAGE>
COREFUND
CORE EQUITY FUND
SEMI-ANNUAL RESULTS:
*This Fund returned 13.82% for the six months ending December 31, 1996.
*The Fund's benchmark, the S&P 500 Index, returned 11.68% for the same
period.
*Assets in the Fund grew 11% from $426.0 million to $471.1 million during
the six months.
COMMENTARY:
During the last six months, CoreFund Core Equity Fund benefited from an
overweighting in the technology sector, with a particularly heavy emphasis on
IBM stock. The Fund also profited from a rebound on the part of the tobacco
stocks, specifically Philip Morris and RJR Nabisco, as litigation concerns eased
for these companies.
The summer correction proved to be short-lived. The stock market rebounded
strongly by September and that strength continued into the fourth quarter. The
technology stocks, which led the market into its correction, also led the market
out of its corrective phase, paced by leaders such as IBM, Intel, and Microsoft.
The stock market continues to be supported by a positive economic
environment, specifically moderate growth and low inflation. This has led to
good corporate profits and relatively modest interest rates, as well as a
growing acceptance on the part of the public of the long-term attractiveness of
equities. However, we should bear in mind that valuation levels are relatively
high, thus making the market somewhat vulnerable to negative news.
QUICK FUND FACTS - CORE EQUITY
------------------------------
INCEPTION DATE: February 28, 1990
PORTFOLIO SIZE: $471.1 million
SHARES OUTSTANDING: 26,036,396 (Y&A COMBINED)
TOP FIVE HOLDINGS (AS OF DECEMBER 31, 1996)
-------------------------------------------
% OF FUND INVESTMENTS
---------------------
ELI Lilly & Co. 5.3%
Airtouch Com. Inc. 4.8%
General RE Corp 4.4%
IBM Corporation 4.0%
AT&T Corporation 3.4%
PERFORMANCE (AS OF DECEMBER 31, 1996)
----------------------------------------------------------------------
6-MONTH NAV NAV
TOTAL RETURN 6/30/96 12/31/96
------------ ------------ ------------
(CUMULATIVE)
Class Y 13.82% $17.26 $18.09
Class A w/o Load 13.68 17.28 18.11
Class A w/Load 7.40 18.29 19.16
S&P 500 Index 11.68 - -
15
<PAGE>
MANAGERS'
DISCUSSION
OF
FUND
PERFORMANCE
(CONTINUED)
DECEMBER 31, 1996
GROWTH EQUITY FUND
SEMI-ANNUAL RESULTS:
*This Fund returned 5.86% for the six months ending December 31, 1996.
*The Fund's benchmarks, the Lipper Growth Funds Index and the S&P 500 Index
returned 8.23% and 11.68%, respectively, for the same period.
*Assets in the Fund grew 10% from $123.2 million to $135.3 million during
the six months.
COMMENTARY:
The CoreFund Growth Equity Fund outpaced its benchmarks for the first 11
months of 1996, but gave back much of the gains in December with a decline of
5.0% for that month alone. The decline was partially due to investor
profit-taking in the technology and telecommunications equipment stocks which
had been strong performers all year.
However, despite December's performance the Fund remains focused on two
principal investment themes. They are computer networking equipment and
software, and telecommunications equipment and services. This focus has led us
to identify and invest in some of the best performing stocks of this two-year
market cycle, including Oracle, Cisco Systems, U.S. Robotics, Microsoft, and
Intel.
The Fund remains well balanced and well diversified with appropriate
exposure to other growth sectors such as health care, retail, consumer, and
financial stocks. We remain committed to investing in high quality,
medium-to-large capitalization stocks of well-managed growth companies. Our
style has not varied or changed in the past year. The December experience,
however, does point out the short-term volatility potential of growth equity
funds versus more diversified core equity funds.
QUICK FUND FACTS - GROWTH EQUITY
--------------------------------
INCEPTION DATE: February 3, 1992
PORTFOLIO SIZE: $135.3 million
SHARES OUTSTANDING: 10,067,665 (Y&A COMBINED)
TOP FIVE HOLDINGS (AS OF DECEMBER 31, 1996)
-------------------------------------------
% OF FUND INVESTMENTS
---------------------
Gillette Company 2.4%
General Electric 2.4%
SmithKline Beecham ADR 2.4%
Merck & Co. 2.2%
MFS Communications Co. 2.2%
PERFORMANCE (AS OF DECEMBER 31, 1996)
- -------------------------------------------------------------------------
6-MONTH NAV NAV
TOTAL RETURN 6/30/96 12/31/96
------------ ------------ ------------
(CUMULATIVE)
Class Y 5.86% $14.19 $13.44
Class A w/o Load 5.76 14.17 13.42
Class A w/Load (0.03) 14.99 14.20
S&P 500 Index 11.68 - -
Lipper Growth Funds 8.23 - -
16
<PAGE>
COREFUND
SPECIAL EQUITY FUND
SEMI-ANNUAL RESULTS:
*This Fund returned 6.75% for the six months ending December 31, 1996.
*The Fund's benchmark, the Russell 3000 Equally Weighted Index, returned
5.28% for the same period.
*Assets in the Fund grew 3% from $64.8 million to $66.8 million during the
six months.
COMMENTARY:
During the last six months, CoreFund Special Equity Fund benefited from
significant
[Graphic]
Photo of Lampost on Wall Street
holdings in such top-performing stocks as Biogen, NBTY, and Oakwood Homes.
The summer correction proved to be short-lived. The stock market rebounded
strongly by September and that strength continued into the fourth quarter. The
technology stocks, which led the market into its correction, also led the market
out of its corrective phase paced by leaders such as IBM, Intel, and Microsoft.
The stock market continues to be supported by a positive economic
environment, specifically moderate growth and low inflation. This has led to
good corporate profits and relatively modest interest rates, as well as a
growing acceptance on the part of the public of the long-term attractiveness of
equities. However, we should bear in mind that valuation levels are relatively
high, thus making the market somewhat vulnerable to negative news.
QUICK FUND FACTS - SPECIAL EQUITY
---------------------------------
INCEPTION DATE: March 15, 1994
PORTFOLIO SIZE: $66.8 million
SHARES OUTSTANDING: 6,547,997 (Y&A COMBINED)
TOP FIVE HOLDINGS (AS OF DECEMBER 31, 1996)
-------------------------------------------
% OF FUND INVESTMENTS
---------------------
Scios Nova 2.0%
IBM Corporation 1.9%
Intel Corporation 1.8%
Case Corporation 1.6%
Lexmark Int'l Group, Inc. 1.6%
PERFORMANCE (AS OF DECEMBER 31, 1996)
- --------------------------------------------------------------------------
6-MONTH NAV NAV
TOTAL RETURN 6/30/96 12/31/96
------------ ------------ ------------
(CUMULATIVE)
Class Y 6.75% $11.86 $10.20
Class A w/o Load 6.63 11.85 10.19
Class A w/Load 0.77 12.54 10.78
Russell 3000 (EW) 5.28 - -
17
<PAGE>
MANAGERS'
DISCUSSION
OF
FUND
PERFORMANCE
(CONTINUED)
DECEMBER 31, 1996
INTERNATIONAL GROWTH FUND*
SEMI-ANNUAL RESULTS:
*This Fund returned 3.20% for the six months ending December 31, 1996.
*The Fund's benchmark, the Morgan Stanley Capital International EAFE Index,
returned 1.48% for the same period.
*Assets in the Fund as of December 31, 1996 totaled $138.7 million.
COMMENTARY:
International markets generally moved higher in the second half of 1996.
European securities, which represent 47% of the Fund's assets, provided the best
returns during the six months. The U.K. was particularly rewarding, although
part of the gain there reflected the strength of the pound sterling, one of the
few currencies to have been appreciating against the U.S. dollar. Despite an
increase in interest rates in November, the financial and utility sectors were
the best performers in the market.
The U.K. market finished 1996 at its high point with the prospect of good
economic earnings and dividend growth for 1997. Economic activity is picking up,
notably in the consumer and housing sectors, corporate earnings should rise
further and liquidity is high. The only risks are the effect of the strong
currency on earnings and the potential uncertainty associated with the general
election which will probably be held in May.
Elsewhere in Europe, there were good returns from the larger markets of
Germany and France, although currency weakness eroded the returns to the U.S.
investor. The main driving force continues to be the enhancement of shareholder
value. The strongest stock moves over the period were in those companies whose
managements have demonstrated commitment to this concept, such as the German
chemical company, Hoechst.
In Japan, which represents 22% of the Fund's holdings, equity market
performance has again been disappointing. The Japanese stock
[Graphic]
Photo of Globe and Currency
market fell sharply at the year end, wiping out previous gains. For
international investors the loss was exacerbated by a weakening yen which
depreciated by more than 10% against the dollar in the year.
The recovery in the Japanese economy that was proceeding well in the first
half of the year has not been sustained. And forecasts for Gross National
Product growth for the current fiscal year are now generally below 2%. The
foreign investor is now a net seller and most domestic investors are preferring
to invest for higher returns abroad (e.g., in U.S. Treasury bonds). Currently,
20% of the Fund's yen assets are protected through a forward sale of yen for
U.S. dollars.
18
<PAGE>
COREFUND
Elsewhere in the Asia pacific region, Hong Kong continues to be the best of
the major markets, benefiting from an upturn in the economy of Mainland China
and an improvement in liquidity, which is good for Hong Kong's real
estate-dominated economy and for its stock market. On the other hand, Thailand
and India have both performed badly (although India was recovering toward the
end of the period).
In Latin America, our investments in Argentina and Brazil ended the period
with nice gains. The Mexican market was also up, but much of the gain was
canceled out by the renewed weakness of the peso. Exporting companies seem to us
the best investment opportunity at present.
As for the year ahead, U.K. and European equities should continue to
progress aided by low inflation and slow economic growth. Asia, with recovering
export markets, should also advance, although Japan's economic problems may be
more difficult to overcome. Latin America, with strong company fundamentals,
should have another good year.
QUICK FUND FACTS - INTERNATIONAL GROWTH
---------------------------------------
INCEPTION DATE: February 12, 1990
PORTFOLIO SIZE: $138.7 million
SHARES OUTSTANDING: 10,537,925 (Y&A COMBINED)
TOP FIVE HOLDINGS (AS OF DECEMBER 31, 1996)
-------------------------------------------
% OF FUND INVESTMENTS
---------------------
Hoechst 1.8%
Novartis AG 1.8%
AMMB Holdings 1.7%
HSBC Holdings 1.6%
Roche Holdings 1.4%
PERFORMANCE (AS OF DECEMBER 31, 1996)
- ------------------------------------------------------------------
6-MONTH NAV NAV
TOTAL RETURN 6/30/96 12/31/96
------------ ------------ ------------
(CUMULATIVE)
Class Y 3.20% $13.97 $13.16
Class A w/o Load 3.04 13.96 13.16
Class A w/Load (2.61) 14.77 13.93
MSCI/EAFE 1.48 - -
*THE INTERNATIONAL GROWTH FUND IS MANAGED BY MARTIN CURRIE, INC.
AND ABERDEEN MANAGERS. THE REVIEW HEREIN SYNTHESIZES THE VIEWS
OF THESE TWO MANAGERS.
19
<PAGE>
MANAGERS'
DISCUSSION
OF
FUND
PERFORMANCE
(CONTINUED)
DECEMBER 31, 1996
BALANCED FUND
SEMI-ANNUAL RESULTS:
*This Fund returned 5.01% for the six months ending December 31, 1996.
*In comparison, the S&P 500 Index returned 11.68% and the Lehman Brothers
Intermediate/Corporate Bond Index returned 4.27% for the same period.
*Assets in the Fund grew 7% from $105.7 million to $113.3 million during
the six months.
COMMENTARY:
We were disappointed with the CoreFund Balanced Fund's six month return as
fourth quarter equity holding results moderately underperformed the equity
benchmark. Unfortunately, this more than offset the slight outperformance of the
Fund's equity portion in the third quarter. It also overshadowed a much improved
fixed income performance relative to the bond benchmark for the six months.
The primary source of this underperformance in the equity portion was a
significantly underweighted position in financial stocks, which proved to be
the strongest sector in the fourth quarter. The surprisingly powerful
post-election rally in stocks was fueled by the financial sector, as investors
reacted to favorable election results and a robust bond market rally. It
appeared that "value" investors, who had remained out of the market in the Fall
fearing both a Democratic majority in Congress and a subsequent bond market
selloff, rushed back into the stock market. As they returned, financial stocks
were the principal sector of choice.
We anticipated flat-to-slightly-higher interest rates during the quarter,
owing to a healthy Christmas season, and were positioned accordingly with a
below-average weighting in financial stocks. We were overweighted in energy
stocks, which
[Graphic]
Time Lapse Photo of Stock Market Data
bore higher dividend yields and lower risk profiles than financial stocks. And,
the Fund's energy holdings performed in line with that sector of the equity
market.
Selected mid-cap holdings in technology dramatically underperformed large
capitalization technology stocks (most notably IBM, which is not a Fund
holding). Finally, weakness in telecommunications holdings in the month of
December capped a difficult quarter for the Fund's equity holdings.
In contrast, the Fund's fixed income holdings fared better, posting a 4.2%
return versus 4.3% for the benchmark index for the six month period. The
dramatic underperformance of the first half of 1996 came to an end. A shortened,
but still slightly longer than index, duration resulted in greater participation
in the post-election bond rally. Also, the significant increase in the percent
of holdings with coupons above 8%, achieved during
20
<PAGE>
COREFUND
the third quarter, contributed to the improved quarterly return.
Our outlook for the next six months is for increased volatility in the
capital markets, with interest rates and corporate earnings being the principal
drivers of stock prices.
We are less certain about predicting what the economy will do during the
second half of 1997. Thus, we will probably keep the current reduced risk
profile of the equity portfolio that we had during the previous quarter. We
continue to expect interest rates to range between 6.25% and 7.25% over the same
time period. Thus, we will look to increase yield opportunistically without
increasing duration during this period.
QUICK FUND FACTS - BALANCED
---------------------------
INCEPTION DATE: January 4, 1993
PORTFOLIO SIZE: $113.3 million
SHARES OUTSTANDING: 9,162,436 (Y&A COMBINED)
TOP FIVE EQUITY HOLDINGS (AS OF DECEMBER 31, 1996)
--------------------------------------------------
% OF FUND INVESTMENTS
---------------------
Coca-Cola Company 1.4%
Gillette Company 1.4%
Boeing Co. 1.4%
Merck & Co. 1.3%
Glaxo PLC ADR 1.3%
PERFORMANCE (AS OF DECEMBER 31, 1996)
- -----------------------------------------------------------------------
6-MONTH NAV NAV
TOTAL RETURN 6/30/96 12/31/96
------------ ------------ ------------
(CUMULATIVE)
Class Y 5.01% $12.59 $12.36
Class A w/o Load 4.97 12.59 12.37
Class A w/Load (0.78) 13.32 13.09
S&P 500 Index 11.68 - -
Lehman Int. Gov't/Corp 4.27 - -
SHORT TERM INCOME FUND
SEMI-ANNUAL RESULTS:
*This Fund returned 3.05% for the six months ending December 31, 1996.
*The Fund's benchmark, the Merrill Lynch 1-year Treasury Bill Index, had a
gross return of 3.14% for the same period.
*Assets in the Fund grew 2% from $30.1 million to $30.6 million during the
six months.
COMMENTARY:
We reduced the average weighted maturity of the CoreFund Short Term Income
Fund from 1.13 years to 0.76 years during the last six months. During the
period, the Fund kept longer duration than its index and was therefore well
positioned to take advantage of the downward shifting yield curve.
In addition, the corporate position in the portfolio enhanced total return
as yield-hungry investors drove down yields with excessive demand for investment
grade paper. Furthermore, a significant position in asset-backed paper boosted
the Fund's return, as it was the strongest performing asset class for 1996.
Overall, the third quarter witnessed little change in the yield curve as
investors attempted to get a read on the direction of interest rates. By
September, soft economic data incited investor confidence that the Federal
Reserve Board was keeping interest rates on hold. This, coupled with continued
strong foreign demand for U.S. dollar-denominated securities, triggered a rally
all along the yield curve.
21
<PAGE>
MANAGERS'
DISCUSSION
OF
FUND
PERFORMANCE
(CONTINUED)
DECEMBER 31, 1996
SHORT TERM INCOME FUND (CONCLUDED)
By year end, rates hit yet another inflection point as fears spread that
foreign demand may soften in 1997. Overall, the short end of the yield curve
shifted down 25 to 50 basis points during the six month period.
Anticipation that Federal Reserve Board policy is on hold for the next
several months should hold bond prices in their current trading range.
Therefore, we intend to hold the duration of the Fund at about one year. In
addition, we will continue our strategy of buying corporates, asset-backed
securities, and treasuries.
QUICK FUND FACTS - SHORT TERM INCOME
------------------------------------
INCEPTION DATE: May 15, 1995
PORTFOLIO SIZE: $30.6 million
SHARES OUTSTANDING: 3,067,902 (Y&A COMBINED)
AVERAGE WEIGHTED MATURITY: 0.8 years
[Graphic]
Pie Chart
Data for pie chart as follows:
QUALITY DIVERSIFICATION (AS OF DECEMBER 31, 1996)
-------------------------------------------------
MOODY'S RATING % OF FUND INVESTMENTS
Other 18%
BB 4%
AAA 63%
BBB 8%
A 7%
PERFORMANCE (AS OF DECEMBER 31, 1996)
- ------------------------------------------------------------------
6-MONTH YIELD NAV
TOTAL RETURN 30-DAY 12/31/96
------------ ------ --------
(CUMULATIVE)
Class Y 3.05% 5.21% $9.97
Class A w/o Load 3.05 - 9.97
Class A w/Load (0.27) 4.80 10.30
Merrill 1-Yr Treasury 3.14 5.50 -
SHORT-INTERMEDIATE BOND FUND
SEMI-ANNUAL RESULTS:
*This Fund returned 4.14% for the six months ending December 31, 1996.
*The Fund's benchmark, the Lehman Brothers Intermediate
Government/Corporate Bond Index, returned 4.27% for the same period.
*Assets in the Fund grew 2% from $162.9 million to $165.8 million during
the six months.
COMMENTARY:
The CoreFund Short-Intermediate Bond Fund maintained an average maturity of
4.30 years, slightly shorter than the Fund's benchmark during the last six
months. In the strong rally during the second half of the year, this position
did impact performance. However, significant overweighting in the asset-backed
securities sector of the market more than compensated for the shorter maturity.
Overall, the bond market reversed direction in September after suffering
negative returns all year. Economic data indicated that perhaps the economy was
slowing in the third quarter and, in fact, Gross Domestic Product growth came in
at a rate of 2.1% below the Federal Reserve Board's targeted growth rate of
2.5%. Inflation was not a concern for the market as both the Consumer Price
Index and the Producer Price Index showed no signs of acceleration from the
prior year.
However, by the end of the fourth quarter, economic growth gathered steam
and Gross Domestic Product growth rebounded to an estimated 4.0%. On December
6th, Federal Reserve Board Chairman Greenspan shook the financial community by
speaking of "irrational exuberance" in
22
<PAGE>
COREFUND
financial asset values. Healthy returns generated in September, October and
November were quickly reversed early in December as a result of Greenspan's
comments. The market ended the last month of the year on a discouraging note.
[Graphic]
Photo of Graph
Concern also mounted over the sustainability of foreign capital inflows
into the U.S. Treasury market. Interest rates rose over 30 basis points in
December from their November lows. Mortgages and asset-backed securities turned
in the strongest returns for the year of all the fixed income sectors due to the
good supply/demand conditions in that market. For the year, mortgages returned
5.35% with a six month return of 4.98%. Corporates led the six month period,
providing a return of 5.55% due to their yield advantage and spread compression
to treasury securities.
The focus for the first quarter of 1997 will be on selecting individual
securities which offer particular value in that sector rather than on over or
underweighting individual sectors. Interest rates have already risen since the
beginning of the year and most likely reflect the midpoint of the trading range.
A market neutral duration and average maturity is warranted at this time.
QUICK FUND FACTS - SHORT-INTERMEDIATE
-------------------------------------
INCEPTION DATE: February 3, 1992
PORTFOLIO SIZE: $165.8 million
SHARES OUTSTANDING: 16,810,034 (Y&A combined)
AVERAGE WEIGHTED MATURITY: 4.3 years
[Graphic]
Pie Chart
Data for pie chart is as follows:
QUALITY DIVERSIFICATION (AS OF DECEMBER 31, 1996)
-------------------------------------------------
MOODY'S RATING % OF FUND INVESTMENTS
Other 3%
Not Rated 7%
BB 3%
BBB 8%
AAA 70%
A 8%
AA 1%
PERFORMANCE (AS OF DECEMBER 31, 1996)
- --------------------------------------------------------------------
6-MONTH YIELD NAV
TOTAL RETURN 30-DAY 12/31/96
------------- -------- ---------
(CUMULATIVE)
Class Y 4.14% 5.72% $9.86
Class A w/o Load 4.01 - 9.86
Class A w/Load 0.60 5.29 10.19
Lehman Int. Gov't/Corp 4.27 6.22 -
23
<PAGE>
MANAGERS'
DISCUSSION
OF
FUND
PERFORMANCE
(CONTINUED)
DECEMBER 31, 1996
GOVERNMENT INCOME FUND
SEMI-ANNUAL RESULTS:
*This Fund returned 4.77%, after expenses, for the six months ending
December 31, 1996.
*The Fund's benchmarks, the Salomon Brothers Broad Investment Grade Bond
Index and the Lehman Brothers Aggregate Bond Index returned 4.94% and 4.90%,
respectively, for the same period.
*Assets in the Fund grew 38% from $15.2 million to $21.0 million during the
six months.
COMMENTARY:
After a startling selloff in the fixed income markets during the first half
of 1996, bond prices stabilized and actually staged a strong rally during the
second half of the year. The CoreFund Government Income Fund participated fully
in the market rally as cash balances were kept at a minimum.
The maturity structure and duration of the Fund were roughly neutral to the
benchmark index during the period, although the effective duration was shortened
by year-end to 4.54 from 4.99. The Fund's performance was helped particularly by
the high concentration of mortgage-backed securities, which comprised roughly
75% of the portfolio. Also, the Fund added to its holdings of Ginnie Mae 8%
coupons, which were higher yielding and shorter duration than the Ginnie Mae 6%
and treasury securities that were sold. The pre-expense yield for the Fund was
roughly 40 basis points more than its benchmark, which served it well during the
period.
During the last six months, longer-term interest rates dropped 25 to 30
basis points in response to moderating economic growth led by slowing consumer
spending. Inflation data continued to be benign, giving additional comfort to
holders of longer-dated bonds.
[Graphic]
Photo of Stock Market
Higher-yielding securities were the best performing investments during the
period. Corporate and asset-backed bonds were the strongest performers in the
last six months, while mortgage-backed securities modestly outperformed
treasuries.
Looking forward to 1997, the fixed income market seems to have some
near-term concerns about strengthening economic signals. With unemployment at a
relatively low 5.3%, the Federal Reserve Board will be very careful not to allow
wage-related inflation to rekindle, leaving the prospect of a first quarter
tightening of monetary policy a possibility.
Accordingly, the Fund has positioned itself with a modestly shorter
maturity structure. We also continue to emphasize yield enhancement as the
Fund's primary source of added value.
24
<PAGE>
COREFUND
QUICK FUND FACTS - GOVERNMENT INCOME
------------------------------------
INCEPTION DATE: April 1, 1993
PORTFOLIO SIZE: $21.0 million
SHARES OUTSTANDING: 2,155,424 (Y&A COMBINED)
AVERAGE WEIGHTED MATURITY: 8.8 years
[Graphic]
Pie Chart
Data for pie chart is as follows:
MATURITY DIVERSIFICATION (AS OF DECEMBER 31, 1996)
--------------------------------------------------
MATURITY IN YEARS % OF FUND INVESTMENTS
Over 20 years 7%
Under 1 year 1%
6-10 years 74%
1-5 years 18%
PERFORMANCE (AS OF DECEMBER 31, 1996)
- -----------------------------------------------------------------------
6-MONTH YIELD NAV
TOTAL RETURN 30-DAY 12/31/96
------------ ---------- ----------
(CUMULATIVE)
Class Y 4.77% 6.38% $9.76
Class A w/o Load 4.74 - 9.77
Class A w/Load 1.37 6.09 10.10
Salomon Broad Bond 4.94 6.73 -
Lehman Aggregate Bond 4.90 6.69 -
BOND FUND
SEMI-ANNUAL RESULTS:
*This Fund returned 4.63% for the six months ending *December 31, 1996.
*The Fund's benchmark, the Lehman Aggregate Bond Index returned 4.90%
for the same period.
*Assets in the Fund as of December 31, 1996 totaled $196.4 million.
COMMENTARY:
During the last six months, CoreFund Bond Fund was positioned with a
slightly longer duration and an overweighting in the Yankee and Home Equity Loan
sectors. All of this benefited the Fund's return over the period. Holdings were
distributed across the yield curve but with a concentration in shorter
intermediate maturities.
Overall, the bond market reversed direction in September after suffering
negative returns all year. Economic data indicated that perhaps the economy was
slowing in the third quarter and in fact, Gross Domestic Product growth came in
at a rate of 2.1% below the Federal Reserve Board's targeted growth rate of
2.5%. Inflation was not a concern for the market as both the Consumer Price
Index and the Producer Price Index showed no signs of acceleration from the
prior year.
However, by the end of the fourth quarter, economic growth gathered steam
and Gross Domestic Product growth rebounded to an estimated 4.0%. On December
6th, Federal Reserve Board Chairman Greenspan shook the financial community by
speaking of "irrational exuberance"
25
<PAGE>
MANAGERS'
DISCUSSION
OF
FUND
PERFORMANCE
(CONTINUED)
DECEMBER 31, 1996
BOND FUND (CONCLUDED)
in financial asset values. Healthy returns generated in September, October, and
November were quickly reversed early in December as a result of Greenspan's
comments. The market ended the last month of the year on a discouraging note.
Concern also mounted over the sustainability of foreign capital inflows
into the U.S. Treasury market. Interest rates rose over 30 basis points in
December from their November lows. Mortgages and asset-backed securities turned
in the strongest returns for the year of all the fixed income sectors due to the
good supply/demand conditions in that market. For the year, mortgages returned
5.35% with a six month return of 4.98%. Corporates led the six month period,
providing a return of 5.55% due to their yield advantage and spread compression
to Treasury securities.
The focus for the first quarter of 1997 will be on selecting individual
securities which offer particular value in that sector rather than on over or
underweighting individual sectors. Interest rates have already risen since the
beginning of the year and most likely reflect the midpoint of the trading range.
A market neutral duration and average maturity is warranted at this time.
[Graphic]
Photo of Currency
QUICK FUND FACTS - BOND
-----------------------
INCEPTION DATE: February 28, 1990
PORTFOLIO SIZE: $196.4 million
SHARES OUTSTANDING: 19,088,535 (Y&A COMBINED)
AVERAGE WEIGHTED MATURITY: 9.6 years
[Graphic]
Pie Chart
Data for pie chart is as follows:
QUALITY DIVERSIFICATION (AS OF DECEMBER 31, 1996)
-------------------------------------------------
MOODY'S RATING % OF FUND INVESTMENTS
Other 1%
Not Rated 8%
BBB 10%
AAA 68%
BB 1%
A 12%
PERFORMANCE (AS OF DECEMBER 31, 1996)
- --------------------------------------------------------------------
6-MONTH YIELD NAV
TOTAL RETURN 30-DAY 12/31/96
------------- ------- ----------
(CUMULATIVE)
Class Y 4.63% 6.19% $10.29
Class A w/o Load 4.49 - 10.29
Class A w/Load (0.51) 5.66 10.80
Lehman Aggregate Bond 4.90 6.69 -
26
<PAGE>
COREFUND
GLOBAL BOND FUND
SEMI-ANNUAL RESULTS:
*This Fund returned 4.48% for the six months ending December 31, 1996.
*The Fund's benchmark, the J.P. Morgan Global Government Bond Index $U.S.,
returned 5.63% for the same period.
*Assets in the Fund grew 5% from $33.2 million to $34.8 million during the
six months.
COMMENTARY:
Over the period, the Global Bond Fund's performance was satisfactory.
However, the performance was eroded by the cost of options to protect against
the uncertain short-term outlook in both the bond and currency markets.
Beginning in the third quarter, and continuing through the fourth,
investors were uncertain about the strength of the U.S. economy. This is
important since the performance of U.S. Treasuries has been setting the tone for
other world bond markets. Even though the factors may be totally different
between the United States and Continental Europe, U.S. Treasuries tend to have
an impact.
The performance of U.S. Treasuries during the six month period was as good,
or bad, as the last set of statistics announced. Mr. Greenspan's comments on the
dangers of dollar asset over-evaluation had a brief and dramatic effect, soon
to be reversed, but not to be forgotten. As of year end, evidence was building
to indicate a strengthening economy.
The other major theme dominating European markets was the questionable
strength of markets such as Italy and Spain on the hopes of first round entry to
the European Monetary Union (EMU). This encouraged volatile trading as their
prospects were examined and re-examined to produce a justification for yield
convergence in the U.K.
The short-term outlook for bonds is not particularly encouraging from
either a technical or fundamental point of view. Although we can see how this
outlook could change by midyear, some caution is required in the meantime.
QUICK FUND FACTS - GLOBAL BOND
------------------------------
INCEPTION DATE: December 15, 1993
PORTFOLIO SIZE: $34.8 million
SHARES OUTSTANDING: 3,582,694 (Y&A COMBINED)
AVERAGE WEIGHTED MATURITY: 4.8 years
[Graphic]
Pie Chart
Data for pie chart is as follows:
QUALITY DIVERSIFICATION (AS OF DECEMBER 31, 1996)
-------------------------------------------------
MOODY'S RATING % OF FUND INVESTMENTS
AA 6%
Not Rated 7%
AAA 87%
PERFORMANCE (AS OF DECEMBER 31, 1996)
- ------------------------------------------------------------------
6-MONTH YIELD NAV
TOTAL RETURN 30-DAY 12/31/96
------------- ------- ---------
(CUMULATIVE)
Class Y 4.48% 4.92% $9.70
Class A w/o Load 4.47 - 9.69
Class A w/Load (0.47) 4.52 10.17
JPM Global Bond U.S.$ 5.63 3.75 -
27
<PAGE>
MANAGERS'
DISCUSSION
OF
FUND
PERFORMANCE
(CONTINUED)
DECEMBER 31, 1996
INTERMEDIATE MUNICIPAL BOND
SEMI-ANNUAL RESULTS:
*This Fund returned 3.54% for the six months ending December 31, 1996.
*The Fund's benchmark, the Lehman Brothers 7-Year Municipal Bond Index,
returned 4.29% for the same period.
*Assets in the Fund grew 36% from $1.4 million to $1.9 million during the
six months.
COMMENTARY:
During the period, we focused our purchases for the CoreFund Intermediate
Municipal Bond Fund in the long intermediate maturity range. We sought to
increase our portfolio yield and average maturity in a declining rate
environment. We also concentrated on improving quality by adding insured bonds.
As the second half of 1996 started, bonds were under pressure from strong
growth in the second quarter. Anxiety over inflation and tighter Federal Reserve
Board policy drove interest rates to their peaks in both markets (treasuries
7.22% and insured municipals 6.10%). However, municipals outperformed their
treasury counterparts during this period. While supply was diminishing due to
the rising rate environment, investors were pouring cash into the market. The
heavy demand drove dealer inventories down and supported prices.
By the end of the third quarter, slower economic growth and lack of
monetary policy change at three successive Federal Reserve Board meetings served
to suppress market fears. Yields declined across the curve through much of the
fourth quarter as economic releases confirmed that third quarter growth had
moderated from the pace of the second quarter.
While municipal yields declined, several factors kept them from fully
participating in the rally. Supply was reaching 1996 highs as investor demand
was ebbing. This was due to resistance to the lower yields and the lure of the
equity market's record setting pace.
Looking forward, January's bond redemptions, combined with typically lower
supply, should support the market. We expect the economy to weaken as an
overextended consumer regroups. Our strategy is to incrementally add yield to
the portfolio through longer duration bonds with good call provisions.
QUICK FUND FACTS - INT. MUNICIPAL BOND
--------------------------------------
INCEPTION DATE: May 3, 1993
PORTFOLIO SIZE: $1.9 million
SHARES OUTSTANDING: 190,986 (Y&A COMBINED)
AVERAGE WEIGHTED MATURITY: 6.2 years
[Graphic]
Pie Chart
Data for pie chart is as follows:
QUALITY DIVERSIFICATION (AS OF DECEMBER 31, 1996)
-------------------------------------------------
MOODY'S RATING % OF FUND INVESTMENTS
Other 8%
Not Rated 3%
A 3%
AAA 61%
AA 25%
PERFORMANCE (AS OF DECEMBER 31, 1996)
- -------------------------------------------------------------------
6-MONTH YIELD NAV
TOTAL RETURN 30-DAY 12/31/96
------------- ------- --------
(CUMULATIVE)
Class Y 3.54% 4.08% $10.06
Class A w/o Load 3.41 - 10.06
Class A w/Load 0.08 3.71 10.40
Lehman 7-Year Muni 4.29 4.80 -
28
<PAGE>
COREFUND
PA MUNICIPAL BOND FUND
SEMI-ANNUAL RESULTS:
*This Fund returned 4.75% for the six months ending December 31, 1996.
*The Fund's benchmark, the Lehman Brothers Pennsylvania Bond Index,
returned 4.87% for the same period.
*Assets in the Fund grew 10% from $9.9 million to $10.9 million during the
six months.
COMMENTARY:
We focused our purchases in the CoreFund Pennsylvania Municipal Bond Fund
during the period in the 15-20 year maturity range. We did this to maintain our
portfolio yield and duration in a declining rate environment. As always, we
concentrated on solid credits with particular emphasis on revenue bonds.
As the second half of 1996 started, bonds were under pressure from strong
growth in the second quarter. Anxiety over inflation and tighter Federal Reserve
Board policy drove interest rates to their peaks in both markets (treasuries
7.22% and insured municipals 6.10%). However, municipals outperformed their
treasury counterparts during this period. While supply was diminishing due to
the rising rate environment, investors were pouring cash into the market. The
heavy demand drove dealer inventories down and supported prices.
By the end of the third quarter, slower economic growth and lack of
monetary policy change at three successive Federal Reserve Board meetings served
to suppress market fears. Yields declined across the curve through much of the
fourth quarter as economic releases confirmed third quarter growth moderated
from the pace of the second quarter.
While municipal yields declined, several factors kept them from fully
participating in the rally. Supply was reaching 1996 highs as investor demand
was ebbing. This was due to resistance to the lower yields and the lure of the
equity market's record setting pace.
Looking forward, January's bond redemptions combined with typically lower
supply should support the market. We expect the economy to weaken as an
overextended consumer regroups. Our strategy is to incrementally add yield to
the portfolio through longer duration bonds with good call provisions.
QUICK FUND FACTS - PA MUNICIPAL BOND
-----------------------------------
INCEPTION DATE: May 16, 1994
PORTFOLIO SIZE: $10.9 million
SHARES OUTSTANDING: 1,046,264 (Y&A COMBINED)
AVERAGE WEIGHTED MATURITY: 10.8 years
[Graphic]
Pie Chart
Data for pie chart is as follows:
QUALITY DIVERSIFICATION (AS OF DECEMBER 31, 1996)
-------------------------------------------------
MOODY'S RATING % OF FUND INVESTMENTS
Other 1%
Not Rated 7%
SP1 3%
AAA 67%
A 7%
AA 15%
PERFORMANCE (AS OF DECEMBER 31, 1996)
- ----------------------------------------------------------------
6-MONTH YIELD NAV
TOTAL RETURN 30-DAY 12/31/96
------------ ------ --------
(CUMULATIVE)
Class Y 4.75% 5.11% $10.43
Class A w/o Load 4.62 - 10.43
Class A w/Load (0.36) 4.63 10.95
Lehman Bros. PA Bond 4.87 5.05 -
29
<PAGE>
MANAGERS'
DISCUSSION
OF
FUND
PERFORMANCE
(CONTINUED)
DECEMBER 31, 1996
NJ MUNICIPAL BOND FUND
SEMI-ANNUAL RESULTS:
*This Fund returned 3.83% for the six months ending December 31, 1996.
*The Fund's benchmark, the Lehman Brothers New Jersey Bond Index, returned
4.72% for the same period.
*Assets in the Fund grew 6% from $1.6 million to $1.7 million during the
six months.
COMMENTARY:
We focused our purchases in the CoreFund New Jersey Municipal Bond Fund
during the period in long intermediate maturity range bonds. We did this to
maintain our portfolio yield and duration in a declining rate environment. As
always, we concentrated on solid credits with particular emphasis on improving
quality by adding general obligation bonds.
As the second half of 1996 started, bonds were under pressure from strong
growth in the second quarter. Anxiety over inflation and tighter Federal Reserve
Board policy drove interest rates to their peaks in both markets (treasuries
7.22% and insured municipals 6.10%). However, municipals outperformed their
treasury counterparts during this period. While supply was diminishing due to
the rising rate environment, investors were pouring cash into the market. The
heavy demand drove dealer inventories down and supported prices.
By the end of the third quarter, slower economic growth and lack of
monetary policy change at three successive Federal Reserve Board meetings served
to suppress market fears. Yields declined across the curve through much of the
fourth quarter as economic releases confirmed third quarter growth moderated
from the pace of the second quarter.
While municipal yields declined, several factors kept them from fully
participating in the rally. Supply was reaching 1996 highs as investor demand
was ebbing. This was due to resistance to the lower yields and the lure of the
equity market's record setting pace.
Looking forward, January's bond redemptions combined with typically lower
supply should support the market. We expect the economy to weaken as an over
extended consumer regroups. Our strategy is to incrementally add yield to the
portfolio through longer duration bonds with good call provisions.
QUICK FUND FACTS - NJ MUNICIPAL BOND
-----------------------------------
INCEPTION DATE: May 16, 1994
PORTFOLIO SIZE: $1.7 million
SHARES OUTSTANDING: 165,318 (Y&A COMBINED)
AVERAGE WEIGHTED MATURITY: 10.0 years
[Graphic]
Pie Chart
Data on pie chart is as follows:
QUALITY DIVERSIFICATION (AS OF DECEMBER 31, 1996)
-------------------------------------------------
MOODY'S RATING % OF FUND INVESTMENTS
Other 6%
AAA 37%
Not Rated 29%
AA 28%
PERFORMANCE (AS OF DECEMBER 31, 1996)
- ----------------------------------------------------------------
6-MONTH YIELD NAV
TOTAL RETURN 30-DAY 12/31/96
------------ ------ --------
(CUMULATIVE)
Class Y 3.83% 5.02% $10.14
Class A w/o Load 3.80 - 10.14
Class A w/Load (1.11) 4.55 10.65
Lehman Bros. NJ Bond 4.72 5.12 -
30
<PAGE>
COREFUND
TREASURY RESERVE
SEMI-ANNUAL RESULTS:
*This Fund returned 2.46% for the six months ending December 31, 1996.
*The Fund's benchmark, the IBC Donoghue Treasury Fund Average, returned
2.34% for the same period.
*Assets in the Fund as of December 31, 1996 totaled $861.1 million.
COMMENTARY:
The average weighted maturity of the CoreFund Treasury Reserve changed from
58 to 52 days during the six months. This six day decrease in the average
weighted maturity was mainly due to the lack of buying opportunities and an
increase in assets during the reporting period.
Treasury securities remained very expensive as investors flocked to the
short-term bill market. This flight to quality is not unusual when the market
lacks a clear sense of the economy's direction. The three month treasury bill
area is considered a "safe haven" for investors and its demand helped keep
short-term bill yields down and prices up. The Fund significantly outperformed
its benchmark because longer-term purchases were limited and a higher percentage
of assets were kept in overnight repurchase agreements.
Going forward, purchases will continue to be made on market weakness. It is
our view that short-term rates will remain stable during the first quarter of
1997, unless inflationary indicators trend higher. As buying opportunities
arise, specific positions will be taken along the curve to maintain a laddered
approach strategy. The average weighted maturity will remain in the area of 50
to 55 days until there is clear direction on the Federal Reserve Board's next
move.
QUICK FUND FACTS - TREASURY RESERVE
-----------------------------------
INCEPTION DATE: November 21, 1988
PORTFOLIO SIZE: $861.1 million
AVERAGE WEIGHTED MATURITY: 52 days
[Graphic]
Pie Chart
Data on pie chart is as follows:
QUALITY DIVERSIFICATION (AS OF DECEMBER 31, 1996)
-------------------------------------------------
MOODY'S RATING % OF FUND INVESTMENTS
AAA 41%
Not Rated 59%
PERFORMANCE (AS OF DECEMBER 31, 1996)
- -----------------------------------------------------------------
6-MONTH YIELD YIELD
TOTAL RETURN 7-DAY 30-DAY
------------ -------- --------
(CUMULATIVE)
Class Y 2.46% 4.99% 4.87%
Class C 2.34 4.74 4.62
IBC/Donoghue Treasury 2.34 4.56 4.58
31
<PAGE>
MANAGERS'
DISCUSSION
OF
FUND
PERFORMANCE
(CONTINUED)
DECEMBER 31, 1996
CASH RESERVE
SEMI-ANNUAL RESULTS:
*This Fund returned 2.51% for the six months ending December 31, 1996.
*The Fund's benchmark, the IBC Donoghue All-Taxable Money Fund Average,
returned 2.46% for the same period.
*Assets in the Fund as of December 31, 1996 totaled $809.1 million.
COMMENTARY:
During the period, the average weighted maturity of the Fund was increased
from approximately 50 to 65 days, as a laddered maturity approach was
instituted. This approach involves owning maturities all along the money market
curve in order to take advantage of the higher yielding, longer term, maturities
while maintaining adequate liquidity. It is a strategy often utilized when the
slope of the money market curve is positive.
As a result of the extension of average maturity, the Fund performed well
as rates declined. Furthermore, the addition of eligible callable agencies and
asset-backed securities boosted the overall yield of the portfolio.
The Federal Funds rate remained unchanged throughout the six months. This
does not, however, imply that volatility of short-term interest rates was
nonexistent. Throughout the majority of the third quarter, the market was
concerned that the Federal Reserve would need to raise interest rates in order
to stay ahead of impending inflation. This inflation scare was caused by the
ever tightening labor markets and factory capacity, along with continued
consumer spending. By September, evidence of a softer economy quelled these
fears and rates dropped significantly.
Going forward, we will continue to maintain our laddered approach. In
addition, we will take specific positions along the curve when value dictates
it, in order to enhance the overall yield in the portfolio.
QUICK FUND FACTS - CASH RESERVE
-------------------------------
INCEPTION DATE: August 16, 1985
PORTFOLIO SIZE: $809.1 million
AVERAGE WEIGHTED MATURITY: 65 days
[Graphic]
Pie Chart
Data for pie chart is as follows:
QUALITY DIVERSIFICATION (AS OF DECEMBER 31, 1996)
-------------------------------------------------
MOODY'S RATING % OF FUND INVESTMENTS
AAA 9%
Not Rated 7%
AA 4%
Other 79%
A 1%
PERFORMANCE (AS OF DECEMBER 31, 1996)
- --------------------------------------------------------------------
6-MONTH YIELD YIELD
TOTAL RETURN 7-DAY 30-DAY
------------ ------ --------
(CUMULATIVE)
Class Y 2.51% 4.96% 4.94%
Class C 2.38 4.71 4.69
IBC/Donoghue Taxable 2.46 4.90 4.85
32
<PAGE>
COREFUND
TAX-FREE RESERVE
SEMI-ANNUAL RESULTS:
*This Fund returned 1.53% for the six month period ended December 31, 1996.
*The Fund's benchmark, the IBC Donoghue Tax-Free Average, returned 1.49%
for the same period.
*The Fund's assets grew 14% from $107.0 million to $122.1 million during
the six months.
COMMENTARY:
The average weighed maturity of the Tax-Free Reserve was changed from 46
days to 58 days during the six months. The Fund's one year effective yield was
3.07%. Toward the end of the year, the average maturity was reduced to 47 days
as a defensive posture against possible significant year-end outflows.
The Fund was extended cautiously and selectively throughout the period.
There was much debate over expectations for short-term interest rates and the
viability of the U.S. economy. Market participants interpreted economic data
piecemeal. During the third quarter, yields on one-year notes fluctuated and
reached a high of 4% in late August. They then steadily declined throughout the
fourth quarter.
We continue to watch economic indicators that are directly related to
inflation - specifically, retail sales, manufacturing capacity utilization,
employment reports, and average hourly earnings. We feel that these are the
indicators being closely watched by the Federal Reserve Board. If these
indicators continue to move along the same trend as recent months, we see no
action being taken by the Federal Reserve Board during the first quarter of
1997.
QUICK FUND FACTS - TAX-FREE RESERVE
-----------------------------------
INCEPTION DATE: April 16, 1991
PORTFOLIO SIZE: $122.1 million
AVERAGE WEIGHTED MATURITY: 47 days
[Graphic]
Pie Chart
Data for pie chart is as follows:
QUALITY DIVERSIFICATION (AS OF DECEMBER 31, 1996)
-------------------------------------------------
MOODY'S RATING % OF FUND INVESTMENTS
AAA 5%
SP1 10%
AA 3%
Not Rated 26%
Other 56%
PERFORMANCE (AS OF DECEMBER 31, 1996)
- ----------------------------------------------------------------------
6-MONTH YIELD YIELD
TOTAL RETURN 7-DAY 30-DAY
------------ ------ -------
(CUMULATIVE)
Class Y 1.53% 3.32% 3.08%
Class C 1.41 3.07 2.83
IBC/Donoghue Tax-Free 1.49 3.32 3.06
33
<PAGE>
STATEMENT OF NET ASSETS
AS OF
DECEMBER 31, 1996
(UNAUDITED)
EQUITY INDEX FUND
[Graphic]
Pie Chart
Data for pie chart as follows:
Consumer Products 14%
Miscellaneous 6%
Utilities 9%
Chemicals & Drugs 15%
Transportation 1%
Retail 5%
Finance 15%
Durable Goods 26%
Energy 9%
% OF TOTAL PORTFOLIO INVESTMENTS
- -------------------------------------------------------------------
DESCRIPTION SHARES VALUE (000)
- -------------------------------------------------------------------
COMMON STOCKS - 98.3%
AEROSPACE & DEFENSE - 0.6%
Lockheed Martin 6,800 $ 622
Raytheon 8,900 428
TRW 3,000 148
-------
1,198
-------
AGRICULTURE - 0.1%
Pioneer Hi-Bred International 3,000 210
-------
AIR TRANSPORTATION - 0.4%
AMR* 2,800 247
Delta Air Lines 2,500 177
US Air Group* 15,300 358
-------
782
-------
AIRCRAFT - 1.8%
Boeing 12,404 1,320
General Dynamics 1,700 120
McDonnell Douglas 8,200 525
Northrop Grumman 1,700 141
Parker Hannifin 2,850 110
Rockwell International* 8,763 533
Textron 2,000 188
United Technologies 8,600 568
-------
3,505
-------
APPAREL/TEXTILES - 0.4%
Footstar* 1,842 46
Liz Claiborne 5,000 193
Nike, Class B 8,800 526
Russell 3,100 92
-------
857
-------
APPLIANCES - 0.1%
Allegheny Teledyne 8,300 191
Choice Hotels International* 3,900 69
Tci Satellite Entertainment* 1,890 19
-------
279
-------
- -------------------------------------------------------------------
DESCRIPTION SHARES VALUE (000)
- -------------------------------------------------------------------
AUTOMOTIVE - 2.3%
Allied Signal 9,100 $ 610
Chrysler 26,200 865
Dial 3,300 49
Echlin 8,300 262
Ford Motor 39,900 1,272
General Motors 25,600 1,427
Paccar 1,500 102
-------
4,587
-------
BANKS - 8.0%
Banc One 13,444 578
Bank of Boston 7,900 508
Bank of New York 11,000 371
BankAmerica 12,800 1,277
Bankers Trust New York 1,800 155
Barnett Banks of Florida 4,400 181
Boatmens Bancshares 4,600 297
Chase Manhattan 15,766 1,407
Citicorp 16,800 1,730
Comerica 3,600 189
Fifth Third Bancorp 3,000 188
First Bank System 3,800 259
First Chicago 12,701 683
First Union 10,530 779
Fleet Financial Group 9,801 489
Golden West Financial 1,800 114
Great Western Financial 9,800 284
H.F. Ahmanson 10,000 325
J.P. Morgan 5,800 566
Keycorp 7,800 394
MBNA 7,950 330
National City 6,800 305
NationsBank 11,000 1,075
Norwest 15,300 666
PNC Bank 13,900 523
Suntrust Banks 8,400 414
U.S. Bancorp 4,300 193
UST 4,600 149
Wachovia 7,100 401
Wells Fargo 3,433 926
-------
15,756
-------
BEAUTY PRODUCTS - 1.8%
Alberto Culver, Class B 3,200 154
Avon Products 3,200 183
Colgate Palmolive 4,246 392
Ecolab 3,300 124
International Flavors &
Fragrances 2,500 112
Procter & Gamble 23,900 2,569
-------
3,534
-------
BROADCASTING, NEWSPAPERS & ADVERTISING - 0.6%
Comcast, Class A 5,400 96
Interpublic Group 2,200 104
Tele-Communications, Class A* 18,900 247
US West Media Group* 21,800 403
Viacom, Class B* 10,526 367
-------
1,217
-------
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
34
<PAGE>
COREFUND EQUITY FUNDS
- -------------------------------------------------------------------
DESCRIPTION SHARES VALUE (000)
- -------------------------------------------------------------------
BUILDING & CONSTRUCTION - 0.3%
Fluor 1,900 $ 119
Foster Wheeler 3,300 123
Halliburton 4,600 277
McDermott International 3,400 57
-------
576
-------
BUILDING MATERIALS - 0.1%
Owens Corning 2,800 119
-------
CHEMICALS - 2.6%
Air Products & Chemical 2,600 180
B.F. Goodrich 4,200 170
Dow Chemical 8,150 639
E.I. DuPont de Nemours 19,000 1,793
Eastman Chemical 1,900 105
FMC* 1,400 98
Great Lakes Chemical 5,100 238
Hercules 2,700 117
Monsanto 19,500 758
Nalco Chemical 6,900 249
Rohm & Haas 2,500 204
Sigma Aldrich 5,300 331
Union Carbide 3,400 139
W.R. Grace & Company 3,100 160
-------
5,181
-------
COMMUNICATIONS EQUIPMENT - 2.0%
Andrew* 3,100 164
Cisco Systems* 22,100 1,406
ITT Industries 10,500 257
ITT* 3,600 156
Motorola 19,000 1,166
Northern Telecom 8,300 514
Tellabs* 6,200 233
-------
3,896
-------
COMPUTERS & SERVICES - 7.4%
3COM* 5,000 367
Apple Computer* 7,600 159
Automatic Data Processing 9,400 403
Bay Networks* 5,500 115
Ceridian* 3,400 138
Compaq Computer* 8,700 646
Computer Associates
International 12,050 599
Computer Sciences* 1,900 156
Dell Computer* 6,200 329
Digital Equipment* 3,900 142
EMC* 7,100 235
First Data 15,400 562
Harris Computer Systems 1,600 110
Hewlett Packard 35,300 1,774
International Business
Machines 18,900 2,854
Microsoft* 41,600 3,437
Novell* 8,300 79
Oracle Systems* 21,575 901
Pitney Bowes 5,000 272
Seagate Technology* 7,200 284
Shared Medical Systems 2,400 118
- -------------------------------------------------------------------
DESCRIPTION SHARES VALUE (000)
- -------------------------------------------------------------------
Silicon Graphics* 4,600 $ 117
Sun Microsystems* 11,200 288
Tandem Computers* 18,986 261
Tandy 2,000 88
Unisys* 23,500 159
-------
14,593
-------
CONTAINERS & PACKAGING - 0.2%
Crown Cork & Seal 3,700 201
Newell 3,600 113
-------
314
-------
DRUGS - 6.4%
Allergan 4,300 153
Alza* 3,400 88
American Home Products 22,800 1,337
Amgen* 9,600 522
Bristol-Myers Squibb 16,720 1,818
Eli Lilly & Co. 19,900 1,453
Merck 41,900 3,321
Pfizer 22,600 1,873
Pharmacia & Upjohn 16,255 644
Schering Plough 12,100 783
Warner Lambert 9,400 705
-------
12,697
-------
ELECTRICAL EQUIPMENT - 3.4%
Emerson Electric 7,300 706
General Electric 57,700 5,705
Westinghouse Electric 11,900 237
-------
6,648
-------
ELECTRICAL SERVICES - 2.5%
American Electric Power 5,300 218
Baltimore Gas & Electric 4,700 126
Carolina Power & Light 3,600 131
Central & South West 5,400 138
Cinergy 4,600 154
Consolidated Edison of New York 5,300 155
Dominion Resources of Virginia 5,500 212
Duke Power 6,100 282
Edison International 13,400 266
Entergy 5,200 144
FPL Group 6,100 281
GPU 4,200 141
Houston Industries 5,800 131
Niagara Mohawk Power* 26,200 259
Northern States Power 3,700 170
Ohio Edison 11,600 264
Pacific Gas and Electric 11,500 241
Pacificorp 6,400 131
PECO Energy 5,000 126
PP&L Resources 5,500 126
Public Service Enterprise Group 5,500 150
Southern 20,100 455
Texas Utilities 7,300 297
Unicom 4,800 130
Union Electric Power 4,300 166
-------
4,894
-------
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS
35
<PAGE>
STATEMENT OF NET ASSETS
AS OF DECEMBER 31, 1996
(UNAUDITED)
EQUITY INDEX FUND (CONTINUED)
- -------------------------------------------------------------------
DESCRIPTION SHARES VALUE (000)
- -------------------------------------------------------------------
ENTERTAINMENT - 1.0%
King World Productions* 6,600 $ 243
Walt Disney 23,426 1,631
-------
1,874
-------
ENVIRONMENTAL SERVICES - 0.4%
Browning Ferris Industries 5,900 155
Laidlaw, Class B 14,000 161
WMX Technologies 15,200 496
-------
812
-------
FINANCIAL SERVICES - 3.0%
Allstate 14,200 822
American Express 16,600 938
Beneficial 2,400 152
Dean Witter Discover 5,200 344
FHLMC 5,800 639
FNMA 35,800 1,334
Household International 4,100 378
Mellon Bank 5,700 405
Merrill Lynch 5,600 456
Morgan Stanley Group 4,200 240
Providian 2,300 118
Salomon 2,500 118
-------
5,944
-------
FOOD, BEVERAGE & TOBACCO - 8.3%
American Brands 7,600 377
Anheuser Busch 16,400 656
Archer Daniels Midland 16,455 362
Brown Forman, Class B 2,700 124
Campbell Soup 8,100 650
Coca Cola 85,600 4,505
ConAgra 7,300 363
Coors, Adolph, Class B 5,600 106
CPC International 5,400 418
General Mills 5,900 374
H.J. Heinz 10,650 381
Hershey Foods 4,000 175
Kellogg 6,100 400
Pepsico 53,800 1,574
Philip Morris 28,800 3,244
Ralston-Purina Group 3,900 286
Sara Lee 16,900 630
Seagram 12,300 477
Unilever 5,300 929
Whitman 5,100 117
Wrigley, William Jr. 4,000 225
-------
16,373
-------
GAS/NATURAL GAS - 1.2%
Coastal 2,500 122
Columbia Gas Systems 3,500 223
Consolidated Natural Gas 2,100 116
El Paso Natural Gas 465 23
Enron 7,300 315
Nicor 3,700 132
Noram Energy 17,800 274
Oneok 5,900 177
Pacific Enterprises 3,800 115
Panenergy 4,200 189
- -------------------------------------------------------------------
DESCRIPTION SHARES VALUE (000)
- -------------------------------------------------------------------
Peoples Energy 4,100 $ 139
Sonat 6,800 350
Williams 3,750 141
-------
2,316
-------
GLASS PRODUCTS - 0.4%
Corning 6,100 282
PPG Industries 7,300 410
-------
692
-------
HEALTHCARE SERVICES - 0.3%
Aetna 5,308 425
United Healthcare 5,100 229
-------
654
-------
HOTELS & LODGING - 0.3%
HFS* 4,100 245
Hilton Hotels 4,400 115
Marriott International 2,900 160
-------
520
-------
HOUSEHOLD FURNITURE & FIXTURES - 0.3%
Armstrong World Industries 1,600 111
Masco 3,500 126
Sherwin Williams 2,300 129
Snap-On Tools 4,050 144
Stanley Works 3,600 97
-------
607
-------
HOUSEHOLD PRODUCTS - 0.9%
Clorox 2,900 291
Gillette 15,600 1,213
Maytag 5,600 111
National Service Industries 3,000 112
Whirlpool 1,700 79
-------
1,806
-------
INSURANCE - 3.5%
Alexander & Alexander
Services 12,400 215
American General 5,400 221
American International Group 16,268 1,761
AON 3,500 217
Chubb 6,600 355
Cigna 2,900 396
General Re 2,400 379
ITT Hartford Group 3,100 209
Jefferson-Pilot 2,100 119
Lincoln National 2,100 110
Loews 3,400 320
Marsh and McLennan 1,700 177
MBIA 1,900 192
MGIC Investment 2,500 190
Safeco 2,800 110
St. Paul 2,827 166
Torchmark 5,400 273
Transamerica 1,600 126
Travelers 21,865 992
USF&G 13,500 282
USLife 3,900 130
-------
6,940
-------
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS
36
<PAGE>
- -------------------------------------------------------------------
DESCRIPTION SHARES VALUE (000)
- -------------------------------------------------------------------
LUMBER & WOOD PRODUCTS - 0.1%
Georgia Pacific 2,700 $ 194
Potlatch 2,100 90
-------
284
-------
MACHINERY - 1.9%
Applied Materials* 4,600 165
Baker Hughes 4,000 138
Black & Decker 3,500 105
Briggs & Stratton 3,800 167
Brunswick 9,500 228
Case 3,000 163
Caterpillar 5,900 444
Crane 4,650 135
Deere 7,800 317
Dover 2,800 141
Dresser Industries 3,900 121
Eaton 2,700 188
General Instrument* 5,800 125
Illinois Tool Works 4,100 327
Ingersoll Rand 2,400 107
Tenneco* 5,000 226
Texas Instruments 5,200 331
Timken 2,500 115
Tyco International 5,300 280
-------
3,823
-------
MANUFACTURING - 0.0%
Newport News Shipbuilding* 1,000 15
-------
MEASURING DEVICES - 0.6%
General Signal 6,400 274
Honeywell 4,400 289
Johnson Controls 1,500 124
Mallinckrodt 3,300 146
Millipore 3,400 141
Pall 4,500 115
-------
1,089
-------
MEDICAL PRODUCTS & SERVICES - 3.6%
Abbott Labs 26,000 1,319
Allegiance 1,560 43
Bausch & Lomb 2,000 70
Baxter International 7,800 320
Beverly Enterprises* 19,600 250
Biomet* 7,400 112
Boston Scientific* 5,800 348
Columbia/HCA Healthcare 22,850 931
Fresenius National
Medical Care (ADR)* 3,252 91
Humana* 10,800 207
Johnson & Johnson 45,500 2,264
Manor Care 3,900 105
Medtronic 8,000 544
St. Jude Medical 3,300 141
Tenet Healthcare* 12,900 282
-------
7,027
-------
- -------------------------------------------------------------------
DESCRIPTION SHARES VALUE (000)
- -------------------------------------------------------------------
METALS & MINING - 0.9%
Alcan Aluminum 7,700 $ 259
Aluminum Company of America 5,200 331
Asarco 3,300 82
Cyprus AMAX Minerals 7,400 173
Freeport-McMoran Copper
and Gold, Class B 6,000 179
Inco 7,600 242
Newmont Mining 1,900 85
Phelps Dodge 1,600 108
Reynolds Metals 1,500 85
Santa Fe Pacific Gold 9,000 138
-------
1,682
-------
MISCELLANEOUS BUSINESS SERVICES - 0.0%
Acnielsen 1,565 24
-------
MISCELLANEOUS CHEMICAL PRODUCTS - 0.1%
Morton International 3,300 134
Raychem 1,900 152
-------
286
-------
MISCELLANEOUS CONSUMER SERVICES - 0.1%
Service International 5,800 162
-------
MISCELLANEOUS MANUFACTURING - 0.2%
Hasbro 2,400 93
Jostens 6,000 127
Mattel 8,250 229
-------
449
-------
PAPER & PAPER PRODUCTS - 2.2%
Avery Dennison 4,600 163
Bemis 3,500 129
Champion International 2,200 95
International Paper 12,035 486
James River 3,200 106
Kimberly Clark 11,252 1,072
Minnesota Mining &
Manufacturing 14,600 1,210
Moore 7,600 155
Stone Container 3,800 57
Temple Inland 2,400 130
Union Camp 4,750 227
Westvaco 3,150 91
Weyerhaeuser 6,006 285
Willamette Industries 1,900 132
-------
4,338
-------
PETROLEUM & FUEL PRODUCTS - 0.1%
Union Pacific Resources Group 8,629 252
-------
PETROLEUM REFINING - 8.6%
Amerada Hess 2,100 122
Amoco 17,500 1,409
Ashland 4,300 189
Atlantic Richfield 5,000 663
Burlington Resources 2,900 146
Chevron 23,300 1,515
Enserch 6,600 152
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
37
<PAGE>
- -------------------------------------------------------------------
DESCRIPTION SHARES VALUE (000)
- -------------------------------------------------------------------
Exxon 43,200 $4,234
Helmerich and Payne 6,600 344
Kerr-McGee 1,500 108
Mobil 13,700 1,675
Occidental Petroleum 9,900 231
Oryx Energy* 8,400 208
Pennzoil 4,700 266
Phillips Petroleum 7,200 319
Royal Dutch Petroleum 18,400 3,142
Santa Fe Energy Resources* 7,300 101
Schlumberger 7,900 789
Sun 5,200 127
Texaco 8,500 834
Unocal 6,400 260
USX Marathon Group 6,500 155
-------
16,989
-------
PHOTOGRAPHIC EQUIPMENT & SUPPLIES - 0.9%
Eastman Kodak 10,800 867
Polaroid 6,100 265
Xerox 10,800 568
-------
1,700
-------
PRECIOUS METALS - 0.3%
Barrick Gold 12,000 345
Battle Mountain Gold 10,000 69
Echo Bay Mines 9,100 60
Homestake Mining 6,800 97
Placer Dome Group 5,400 117
-------
688
-------
PRINTING & PUBLISHING - 1.1%
American Greetings, Class A 3,200 91
Deluxe 2,500 82
Donnelly R.R. & Sons 3,200 100
Dow Jones 5,600 190
Gannett 4,800 359
Knight-Ridder 3,000 115
McGraw-Hill 2,200 101
Meredith 3,000 158
New York Times, Class A 3,200 122
Time Warner, Class A 19,800 743
Times Mirror, Class A 3,900 194
-------
2,255
-------
PROFESSIONAL SERVICES - 0.2%
Cognizant 11,000 363
Dun & Bradstreet 4,700 112
-------
475
-------
RAILROADS - 0.9%
Burlington Northern Santa Fe 5,464 472
Conrail 800 80
CSX 6,200 262
Norfolk Southern 4,600 403
Union Pacific 8,300 499
-------
1,716
-------
- -------------------------------------------------------------------
DESCRIPTION SHARES VALUE (000)
- -------------------------------------------------------------------
RESTAURANTS - 0.6%
Darden Restaurants 11,800 $ 103
McDonald's 22,400 1,014
Wendy's International 5,900 121
-------
1,238
-------
RETAIL - 4.4%
Albertson's 8,400 299
American Stores 3,200 131
Charming Shoppes* 35,000 177
Circuit City Stores 3,000 90
CVS 6,400 265
Dayton-Hudson 7,800 306
Dillard Department Stores,
Class A 2,700 83
Federated Department Stores* 5,700 195
Gap 9,600 289
Giant Food, Class A 3,900 135
Harcourt General 2,300 106
Home Depot 15,266 765
J.C. Penney 6,500 317
K Mart* 10,000 104
Kroger* 3,100 144
Limited 9,500 175
Longs Drug Stores 2,900 142
Lowes 5,500 195
May Department Stores 6,900 323
Mercantile Stores 2,500 123
Nordstrom 7,300 259
Pep Boys - Manny Moe & Jack 3,226 99
Price/Costco* 4,900 123
Rite Aid 3,700 147
Sears Roebuck 13,500 623
TJX Companies 6,700 317
Toys R Us* 9,800 294
Wal Mart Stores 78,600 1,798
Walgreen 7,600 304
Winn Dixie Stores 3,400 108
Woolworth* 7,500 164
-------
8,600
-------
RUBBER & PLASTIC - 0.4%
Goodyear Tire & Rubber 5,380 276
Reebok International 7,300 307
Tupperware 5,700 306
-------
889
-------
SEMI-CONDUCTORS/INSTRUMENTS - 2.4%
Advanced Micro Devices* 7,500 193
AMP 6,200 238
Intel 29,400 3,850
LSI Logic* 4,000 107
Micron Technology 5,900 172
National Semiconductor* 5,600 137
-------
4,697
-------
SPECIALTY MACHINERY - 0.1%
Cooper Industries 2,600 110
-------
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
38
<PAGE>
COREFUND EQUITY FUNDS
- -------------------------------------------------------------------
DESCRIPTION SHARES VALUE (000)
- -------------------------------------------------------------------
STEEL & STEEL WORKS - 0.2%
Bethlehem Steel* 5,900 $ 53
Nucor 2,000 102
USX U.S. Steel Group 1,900 60
Worthington Industries 4,600 83
-------
298
-------
TECHNOLOGY, SERVICES - 0.2%
Cabletron Systems* 4,000 133
CUC International* 13,350 317
-------
450
-------
TELEPHONES & TELECOMMUNICATION - 6.8%
AT&T 54,736 2,381
Airtouch Communications* 19,100 482
Alltel 5,500 173
Ameritech 18,300 1,109
Bell Atlantic 14,400 932
Bellsouth 33,900 1,369
GTE 33,600 1,529
Lucent Technologies 15,100 698
MCI Communications 26,658 871
NYNEX 14,600 703
Pacific Telesis Group 15,600 573
SBC Telecommunications 22,176 1,148
Sprint 14,000 558
US West 17,600 568
Worldcom* 12,000 313
-------
13,407
-------
TRUCKING - 0.1%
Cummins Engine 1,900 87
Roadway Express 650 13
Ryder System 5,000 141
-------
241
-------
WHOLESALE - 0.7%
Alco Standard 3,600 186
Fleming Companies 17,000 293
Genuine Parts 2,800 125
Praxair 3,500 161
Super-Valu 8,100 230
Sysco 4,100 134
W.W. Grainger 2,000 161
-------
1,290
-------
TOTAL COMMON STOCKS
(Cost $132,133) 193,855
-------
PREFERREED STOCK - 0.0%
Fresenius National
Medical Care* 3,100 --
-------
TOTAL PREFERRED STOCK
(Cost $0) --
-------
- -------------------------------------------------------------------
DESCRIPTION VALUE (000)
- -------------------------------------------------------------------
TOTAL INVESTMENTS - 98.3%
(Cost $132,133) $193,855
-------
OTHER ASSETS AND LIABILITIES,
NET - 1.7% 3,406
-------
NET ASSETS:
Portfolio Shares of Class Y
($0.001 par value - 500
million authorized)
based on 6,274,561
outstanding shares 133,927
Portfolio Shares of Class A
($0.001 par value - 500
million authorized)
based on 29,778 outstanding
shares 931
Accumulated Net Realized Gain
on Investments 681
Net Unrealized Appreciation
on Investments 61,722
-------
TOTAL NET ASSETS - 100.0% $197,261
=======
NET ASSET VALUE, OFFERING AND
REDEMPTION PRICE PER SHARE -
CLASS Y $31.29
=======
NET ASSET VALUE AND REDEMPTION
PRICE PER SHARE - CLASS A $31.28
=======
* NON - INCOME PRODUCING SECURITY
AMOUNTS DESIGNATED AS "-" ARE EITHER $0 OR HAVE BEEN ROUNDED TO $0.
(ADR) -AMERICAN DEPOSITORY RECEIPT
FHLMC - FEDERAL HOME LOAN MORTGAGE CORPORATION
FNMA - FEDERAL NATIONAL MORTGAGE ASSOCIATION
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
39
<PAGE>
STATEMENT
OF
NET ASSETS
AS OF
DECEMBER 31, 1996
(UNAUDITED)
CORE EQUITY FUND
[Graphic]
Pie Chart
Data for pie chart as follows:
Building & Construction 2%
Miscellaneous 6%
Chemicals & Drugs 12%
Utilities 12%
Consumer Products 10%
Transportation 1%
Retail 2%
Metals & Mining 1%
Durable Goods 33%
Finance 16%
Energy 5%
% OF TOTAL PORTFOLIO INVESTMENTS
- -------------------------------------------------------------------
DESCRIPTION SHARES VALUE (000)
- -------------------------------------------------------------------
COMMON STOCKS - 99.3%
AIRCRAFT - 2.8%
Boeing 60,000 $ 6,382
McDonnell Douglas 60,000 3,840
Textron 30,000 2,827
-------
13,049
-------
APPAREL/TEXTILES - 0.2%
Burlington Industries* 49,771 547
Shaw Industries 22,900 269
-------
816
-------
AUTOMOTIVE - 1.6%
Allied Signal 65,000 4,355
Ford Motor 108,300 3,452
-------
7,807
-------
BANKS - 1.3%
Bank of Boston 51,000 3,277
PNC Bank 80,000 3,010
-------
6,287
-------
BUILDING & CONSTRUCTION - 1.1%
Clayton Homes 180,000 2,430
Foster Wheeler 70,000 2,599
-------
5,029
-------
CHEMICALS - 2.9%
Hercules 20,000 865
IMC Global 120,000 4,695
Monsanto 99,000 3,849
Praxair 97,200 4,483
-------
13,892
-------
COMMUNICATIONS EQUIPMENT - 3.0%
Bay Networks* 65,000 1,357
Cabletron Systems* 86,000 2,860
ITT Industries 47,500 1,164
- -------------------------------------------------------------------
DESCRIPTION SHARES VALUE (000)
- -------------------------------------------------------------------
Lucent Technologies 51,853 $ 2,398
Motorola 58,700 3,603
U.S. Robotics* 35,000 2,520
-------
13,902
-------
COMPUTERS & SERVICES - 6.8%
America Online* 75,000 2,494
Computer Associates
Interational 55,000 2,736
Hewlett Packard 57,000 2,864
International Business
Machines 110,000 16,610
Microsoft* 87,000 7,188
-------
31,892
-------
CONTAINERS & PACKAGING - 0.4%
Ball 67,500 1,755
-------
DRUGS - 8.4%
Alza* 198,600 5,139
Biogen* 130,000 5,037
Elan (ADR)* 16,100 535
Eli Lilly & Co. 300,000 21,900
Ivax 216,900 2,223
Mylan Laboratories 275,200 4,610
-------
39,444
-------
ELECTRICAL EQUIPMENT - 2.6%
General Electric 125,000 12,359
-------
ELECTRICAL SERVICES - 1.6%
FPL Group 27,000 1,242
Unicom 235,000 6,374
-------
7,616
-------
ENVIRONMENTAL SERVICES - 0.7%
Browning Ferris Industries 130,000 3,412
-------
FINANCIAL SERVICES - 0.9%
Mercury Finance 330,000 4,043
-------
FOOD, BEVERAGE & TOBACCO - 7.1%
Canandaigua Wine, Class A* 207,505 5,914
Chiquita Brands International 225,200 2,871
Nabisco Holdings, Class A 287,500 11,177
Philip Morris 85,000 9,573
RJR Nabisco Holdings 122,400 4,162
-------
33,697
-------
HEALTHCARE SERVICES - 3.4%
Foundation Health* 75,000 2,381
HBO 45,000 2,672
Medpartners* 525,572 11,037
-------
16,090
-------
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS
40
<PAGE>
COREFUND EQUITY FUNDS
- -------------------------------------------------------------------
DESCRIPTION SHARES VALUE (000)
- -------------------------------------------------------------------
HOTELS & LODGING - 0.7%
HFS* 16,500 $ 986
ITT* 55,000 2,386
-------
3,372
-------
INSURANCE - 12.2%
American International Group 85,000 9,201
Equitable 215,000 5,294
Everest Reinsurance Holdings 252,000 7,245
General Re 115,000 18,141
ITT Hartford Group 56,500 3,814
Travelers 306,665 13,915
-------
57,610
-------
MACHINERY - 2.0%
Case 85,675 4,669
Caterpillar 30,000 2,258
Cummins Engine 55,000 2,530
-------
9,457
-------
MEDICAL PRODUCTS & SERVICES - 0.4%
Beverly Enterprises* 136,600 1,742
United States Surgical 7,600 299
-------
2,041
-------
METALS & MINING - 1.4%
Phelps Dodge 28,000 1,890
Potash of Saskatchewan 56,800 4,828
-------
6,718
-------
PETROLEUM & FUEL PRODUCTS - 4.1%
Repsol (ADR) 225,000 8,578
Tidewater 85,000 3,846
Triton Energy, Class A* 63,100 3,060
Union Pacific Resources Group 43,000 1,258
USX Marathon Group 100,000 2,388
-------
19,130
-------
PETROLEUM REFINING - 5.2%
British Petroleum (ADR) 61,561 8,703
Mobil 100,000 12,225
Texaco 35,000 3,434
-------
24,362
-------
PHOTOGRAPHIC EQUIPMENT & SUPPLIES - 1.4%
Xerox 125,000 6,578
-------
PRINTING & PUBLISHING - 0.8%
Banta 75,000 1,716
News (ADR) 110,000 1,939
-------
3,655
-------
RAILROADS - 0.7%
CSX 45,000 1,901
Union Pacific 25,000 1,503
-------
3,404
-------
REAL ESTATE - 0.3%
Kimco Realty 37,500 1,308
-------
- -------------------------------------------------------------------
DESCRIPTION SHARES/PAR (000) VALUE (000)
- -------------------------------------------------------------------
RESTAURANTS - 1.3%
Darden Restaurants 484,656 $ 4,241
Lone Star Steakhouse & Saloon 45,000 1,204
Vicorp Restaurants* 61,534 815
-------
6,260
-------
RETAIL - 4.2%
Borders Group* 55,000 1,973
CML Group 275,000 928
Corporate Express* 50,300 1,481
General Nutrition* 435,550 7,350
Pep Boys - Manny,
Moe & Jack 53,000 1,630
Staples* 226,100 4,084
Warnaco Group 75,000 2,222
-------
19,668
-------
RUBBER & PLASTIC - 1.4%
Goodyear Tire & Rubber 125,000 6,422
-------
SEMI-CONDUCTORS/INSTRUMENTS - 3.5%
Atmel* 108,700 3,601
Intel 75,000 9,820
Parker Hannifin 60,000 2,325
Silicon Valley Group* 28,800 580
-------
16,326
-------
SPECIALTY MACHINERY - 0.6%
Westinghouse Electric 150,000 2,981
-------
STEEL & STEEL WORKS - 0.6%
USX U.S. Steel Group 85,400 2,679
-------
TELEPHONES & TELECOMMUNICATION - 13.7%
AT&T 325,000 14,138
Airtouch Communications* 786,300 19,854
Bellsouth 131,400 5,305
Mcleod, Class A* 185,000 4,718
MFS Communications* 50,000 2,725
Qualcomm* 235,000 9,371
Worldcom* 325,000 8,470
-------
64,581
-------
TOTAL COMMON STOCKS
(Cost $399,272) 467,642
-------
REPURCHASE AGREEMENTS - 0.6%
Aubrey Lanston
6.600%, dated 12/31/96,
matures 01/02/97, repurchase
price $1,555,570 (collateralized
by U.S. Treasury Note, par value
$1,475,000, 8.25%, 07/15/98;
market value $1,636,494) $1,555 1,555
Hong Kong Shanghai Bank
6.625%, dated 12/31/96,
matures 01/02/97, repurchase
price $1,554,572 (collateralized
by U.S. Treasury Note, par value
$1,605,000, 5.125%, 11/30/98;
market value $1,595,474) 1,554 1,554
-------
SEE ACCOMPANYING NOTES FO FINANCIAL STATEMENTS.
41
<PAGE>
STATEMENT OF NET ASSETS
AS OF DECEMBER 31, 1996
(UNAUDITED)
CORE EQUITY FUND (CONCLUDED)
- -------------------------------------------------------------------
DESCRIPTION VALUE (000)
- -------------------------------------------------------------------
TOTAL REPURCHASE AGREEMENT
(Cost $3,109) $3,109
-------
TOTAL INVESTMENTS - 99.9%
(Cost $402,381) 470,751
-------
OTHER ASSETS AND LIABILITIES,
NET - 0.1% 346
-------
NET ASSETS:
Portfolio Shares - Class Y
($0.001 par value - 50
million authorized) based
on 25,316,821 outstanding shares 381,334
Portfolio Shares - Class A
($0.001 par value - 50
million authorized) based
on 719,575 outstanding shares 9,330
Accumulated Net Realized
Gain on Investments 12,064
Net Unrealized Appreciation
on Investments 68,370
Distributions in Excess of
Net Investment Income (1)
-------
TOTAL NET ASSETS - 100.0% $471,097
=======
NET ASSET VALUE, OFFERING AND
REDEMPTION PRICE PER SHARE -
CLASS Y $18.09
=======
NET ASSET VALUE AND REDEMPTION
PRICE PER SHARE - CLASS A $18.11
=======
*NON-INCOME PRODUCING SECURITY
(ADR) - AMERICAN DEPOSITORY RECEIPT
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
GROWTH EQUITY FUND
[Graphic]
Pie Chart
Data for pie chart as follows:
Cash Equivalent 3%
Miscellaneous 7%
Chemical & Drugs 20%
Utilities 5%
Retail 5%
Consumer Products 13%
Finance 9%
Energy 4%
Durable Goods 34%
% OF TOTAL PORTFOLIO INVESTMENTS
- -------------------------------------------------------------------
DESCRIPTION SHARES VALUE (000)
- -------------------------------------------------------------------
COMMON STOCKS - 98.3%
BANKS - 4.9%
Barnett Banks of Florida 70,000 $2,879
Citicorp 22,000 2,266
Norwest 35,000 1,522
-------
6,667
-------
BEAUTY PRODUCTS - 1.9%
Colgate Palmolive 28,000 2,583
-------
CHEMICALS - 1.0%
Monsanto 33,600 1,306
-------
COMMUNICATIONS EQUIPMENT - 4.9%
Ascend Communications* 21,000 1,305
Cascade Communications* 20,200 1,114
Cisco Systems* 43,900 2,793
U.S. Robotics* 19,212 1,383
-------
6,595
-------
COMPUTERS & SERVICES - 9.9%
Compaq Computer* 32,000 2,376
Computer Sciences* 15,494 1,272
CUC International* 99,000 2,351
First Data 31,800 1,161
Microsoft* 30,032 2,481
Oracle Systems* 59,124 2,468
Paychex 24,525 1,261
-------
13,370
-------
DRUGS - 11.5%
American Home Products 44,200 2,591
Amgen* 41,864 2,276
Merck 38,700 3,067
Schering Plough 20,000 1,295
SmithKline Beecham (PLC)
(ADR) 48,550 3,301
Warner Lambert 40,000 3,000
-------
15,530
-------
42
<PAGE>
COREFUND EQUITY FUNDS
- -------------------------------------------------------------------
DESCRIPTION SHARES VALUE (000)
- -------------------------------------------------------------------
ELECTRICAL EQUIPMENT - 6.5%
Emerson Electric 28,000 $ 2,709
GE 33,589 3,321
Illinois Tool Works 35,000 2,796
-------
8,826
-------
ELECTRICAL SERVICES - 3.1%
Duke Power 30,000 1,387
Texas Utilities 69,300 2,824
-------
4,211
-------
ENTERTAINMENT - 5.1%
Hilton Hotels 81,000 2,116
International Game
Technology 140,000 2,555
Mirage Resorts* 101,972 2,205
-------
6,876
-------
FINANCIAL SERVICES - 2.1%
FNMA 74,656 2,781
-------
FOOD, BEVERAGE & TOBACCO - 7.0%
Coca Cola 25,600 1,347
ConAgra 53,000 2,637
Hershey Foods 60,000 2,625
Sara Lee 78,500 2,924
-------
9,533
-------
HEALTHCARE SERVICES - 4.3%
Cardinal Health 51,600 3,006
Health Management
Associates, Class A* 124,025 2,791
-------
5,797
-------
HOUSEHOLD PRODUCTS - 4.5%
Gillette 42,800 3,328
Sunbeam Oster 107,000 2,755
-------
6,083
-------
INSURANCE - 1.5%
American International Group 18,400 1,992
-------
MEASURING DEVICES - 1.0%
Honeywell 21,000 1,381
-------
MEDICAL PRODUCTS & SERVICES - 2.8%
HBO 24,000 1,425
Johnson & Johnson 49,000 2,438
-------
3,863
-------
MISCELLANEOUS BUSINESS SERVICES - 3.3%
Parametric Technology* 56,200 2,887
Peoplesoft* 33,000 1,582
-------
4,469
-------
MISCELLANEOUS CONSUMER SERVICES - 0.9%
Service International 42,900 1,201
-------
PAPER & PAPER PRODUCTS - 1.0%
Kimberly Clark 14,300 1,362
-------
- -------------------------------------------------------------------
DESCRIPTION SHARES/PAR (000) VALUE (000)
- -------------------------------------------------------------------
PETROLEUM SERVICES - 4.2%
Baker Hughes 38,000 $ 1,311
Halliburton 48,000 2,892
Schlumberger 15,100 1,508
-------
5,711
-------
RETAIL - 5.2%
Dayton-Hudson 72,000 2,826
Home Depot 28,000 1,404
Walgreen 70,000 2,800
-------
7,030
-------
TECHNOLOGY, SERVICES - 2.8%
Computer Associates
Interational 42,000 2,090
Intel 13,200 1,728
-------
3,818
-------
TELEPHONES & TELECOMMUNICATION - 8.9%
Brooks Fiber Properties* 47,400 1,209
Icg Communications* 57,000 1,005
LCI International* 126,834 2,727
MCI Communications 42,300 1,383
McLeod, Class A* 42,000 1,071
MFS Communications* 56,256 3,066
Worldcom* 60,000 1,564
-------
12,025
-------
TOTAL COMMON STOCKS
(Cost $101,559) 133,010
-------
REPURCHASE AGREEMENTS - 2.9%
Aubrey Lanston
6.600%, dated 12/31/96,
matures 01/02/97, repurchase
price $1,316,483 (collateralized
by U.S. Treasury Note, par value
$1,250,000, 8.250%, 07/15/98;
market value $1,386,859) $1,316 1,316
Hong Kong Shanghai Bank
6.625%, dated 12/31/96,
matures 01/02/97, repurchase
price $1,315,484 (collateralized
by U.S. Treasury Note, par value
$1,355,000, 5.125%, 11/30/98;
market value $1,346,958) 1,315 1,315
Swiss Bank
6.750%, dated 12/31/96,
matures 01/02/97, repurchase
price $1,315,493 (collateralized
by U.S. Treasury Note, par value
$1,320,000, 5.750%, 11/30/98;
market value $1,340,856) 1,315 1,315
-------
TOTAL REPURCHASE AGREEMENTS
(Cost $3,946) 3,946
-------
TOTAL INVESTMENTS - 101.2%
(Cost $105,505) 136,956
-------
OTHER ASSETS AND LIABILITIES,
NET - (1.2%) (1,614)
-------
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
43
<PAGE>
STATEMENT OF NET ASSETS
AS OF DECEMBER 31, 1996
(UNAUDITED)
COREFUND EQUITY FUND (CONCLUDED)
- -------------------------------------------------------------------
DESCRIPTION VALUE (000)
- -------------------------------------------------------------------
NET ASSETS:
Portfolio Shares - Class Y
($0.001 par value - 100
million authorized) based
on 9,777,350 outstanding shares $100,210
Portfolio Shares - Class A
($0.001 par value - 100
million authorized) based
on 290,315 outstanding shares 3,102
Accumulated Net Realized
Gain on Investments 579
Net Unrealized Appreciation
on Investments 31,451
-------
TOTAL NET ASSETS - 100.0% $135,342
=======
NET ASSET VALUE, OFFERING AND
REDEMPTION PRICE PER SHARE -
CLASS Y $13.44
=======
NET ASSET VALUE AND REDEMPTION
PRICE PER SHARE - CLASS A $13.42
=======
* NON-INCOME PRODUCING SECURITY
(ADR) - AMERICAN DEPOSITORY RECEIPT
FNMA - FEDERAL NATIONAL MORTGAGE ASSOCIATION
(PLC) - PUBLIC LIMITED COMPANY
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
SPECIAL EQUITY FUND
[Graphic]
Pie Chart
Data for pie chart as follows:
Building & Construction 3%
Cash Equivalent 2%
Chemical & Drugs 7%
Miscellaneous 9%
Consumer Products 7%
Utilities 3%
Retail 2%
Real Estate 5%
Durable Goods 51%
Finance 11%
% OF TOTAL PORTFOLIO INVESTMENTS
- -------------------------------------------------------------------
DESCRIPTION SHARES VALUE (000)
- -------------------------------------------------------------------
COMMON STOCKS - 98.5%
AIRCRAFT - 1.4%
McDonnell Douglas 15,000 $ 960
-------
APPAREL/TEXTILES - 2.1%
Burlington Industries* 5,117 56
Fieldcrest Cannon* 17,400 278
Haggar 20,000 317
Oneita Industries* 55,000 96
Oxford Industries 20,000 480
Quaker Fabric* 11,900 167
-------
1,394
-------
AUTOMOTIVE - 0.5%
Earl Scheib* 4,900 34
Ford Motor 7,500 239
Walbro 3,000 55
-------
328
-------
BANKS - 1.1%
Bank of Boston 6,000 385
PNC Bank 10,000 376
-------
761
-------
BUILDING & CONSTRUCTION - 1.4%
Cavalier Homes 20,483 236
Jacobs Engineering Group* 29,500 697
-------
933
-------
CHEMICALS - 2.2%
Foster Wheeler 20,000 743
Kinark* 57,500 219
Royal Plastics Group* 27,500 512
-------
1,474
-------
COMMUNICATIONS EQUIPMENT - 1.6%
ITT Industries 5,000 122
Scientific-Atlanta 62,000 930
-------
1,052
-------
44
<PAGE>
- -------------------------------------------------------------------
DESCRIPTION SHARES VALUE (000)
- -------------------------------------------------------------------
COMPUTERS & SERVICES - 7.0%
America Online* 20,000 $ 665
Computer Associates
Interational 7,000 348
Gametek* 10,000 14
International Business
Machines 8,500 1,283
Lexmark International
Group* 39,000 1,077
Mizar* 18,200 89
Mylex* 75,000 937
Pace Health
Management Systems* 43,500 130
Video Lotteries Technologies* 34,200 120
-------
4,663
-------
CONTAINERS & PACKAGING - 1.1%
Ball 20,000 520
Cronos Group* 31,400 220
-------
740
-------
DRUGS - 13.0%
Anesta* 45,200 870
Aphton* 52,500 1,024
Biogen* 18,000 697
Collagenex Pharmaceuticals* 46,300 376
Elan (ADR)* 3,400 113
Flamel Technologies (ADR)* 97,700 733
Guilford Pharmaceuticals* 40,500 942
Hybridon* 22,500 132
Isis Pharmaceutical* 27,300 491
Medpartners* 45,000 945
NBTY* 26,500 503
Pharmaceutical Resources* 105,000 367
Roberts Pharmaceuticals* 12,500 141
Scios Nova* 218,200 1,340
-------
8,674
-------
ELECTRONICS - 3.4%
Kuhlman 50,000 969
Lam Research* 12,700 357
Smartflex Systems* 2,300 38
Teradyne* 23,000 561
Videonics* 42,600 378
-------
2,303
-------
ENTERTAINMENT - 1.2%
Boomtown* 5,700 50
Cinergi Pictures Entertainment* 14,300 28
Meridian Sports* 17,300 22
Mikohn Gaming* 110,000 577
Sports Club* 38,000 109
-------
786
-------
ENVIRONMENTAL SERVICES - 1.6%
Harding Lawson
Associates Group* 40,300 282
Philip Environmental* 52,500 761
-------
1,043
-------
- -------------------------------------------------------------------
DESCRIPTION SHARES VALUE (000)
- -------------------------------------------------------------------
FINANCIAL SERVICES - 6.6%
Delta Financial* 34,700 $ 625
Jayhawk Acceptance* 68,000 765
Mercury Finance 75,000 919
Olympic Financial* 45,400 653
Prentiss Properties Trust* 34,000 850
Repsol (ADR) 15,000 572
-------
4,384
-------
FOOD, BEVERAGE & TOBACCO - 2.4%
General Nutrition* 49,500 835
Philip Morris 5,700 642
RJR Nabisco Holdings 1,800 61
Rymer Foods* 110,100 38
-------
1,576
-------
HOTELS & LODGING - 3.5%
HFS* 10,000 597
ITT* 13,500 586
John Q. Hammons Hotels* 9,600 82
Prime Hospitality* 64,500 1,040
U.S. Franchise Systems, Class A* 4,500 46
-------
2,351
-------
HOUSEHOLD FURNISHINGS - 0.6%
Winsloew Furniture* 44,180 431
-------
INSURANCE - 5.1%
Everest Reinsurance Holdings 32,700 940
Gryphon Holdings* 36,700 518
Pac Rim Holding* 96,400 229
Travelers 23,333 1,059
Travelers/Aetna
Property Casualty* 18,100 640
-------
3,386
-------
MACHINERY - 4.5%
Case 20,000 1,090
Caterpillar 5,000 376
Cummins Engine 17,000 782
Giddings & Lewis 60,000 773
-------
3,021
-------
MEASURING DEVICES - 0.6%
Rofin-Sinar Technologies * 36,000 423
-------
MEDICAL PRODUCTS & SERVICES - 5.1%
Acme United* 129,200 711
Emeritus* 27,000 365
Harborside Healthcare* 18,000 214
Innovasive Devices* 9,000 70
Keravision* 34,500 474
Metra Biosystems* 6,800 32
Molecular Dynamics* 1,400 15
Possis Medical* 22,600 472
Quest Medical* 9,000 70
Resound* 47,400 338
Spectranetics* 27,000 113
Urologix* 26,500 431
Value Health* 5,400 105
-------
3,410
-------
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
45
<PAGE>
STATEMENT OF NET ASSETS
AS OF DECEMBER 31, 1996
(UNAUDITED)
SPECIAL EQUITY FUND (CONCLUDED)
- -------------------------------------------------------------------
DESCRIPTION SHARES VALUE (000)
- -------------------------------------------------------------------
METALS & MINING - 1.6%
Potash of Saskatchewan 4,300 $366
UCAR International* 18,500 696
-------
1,062
-------
MISCELLANEOUS BUSINESS SERVICES - 0.9%
Mecon* 62,000 411
RMH Teleservices* 27,500 213
-------
624
-------
PETROLEUM & FUEL PRODUCTS - 1.6%
Tidewater 20,000 905
Union Pacific Resources Group 5,928 173
-------
1,078
-------
PETROLEUM REFINING - 0.7%
USX-U.S. Steel Group 14,000 439
-------
RAILROADS - 0.6%
Union Pacific 7,000 421
-------
REAL ESTATE - 3.3%
Agree Realty 9,400 201
Liberty Property Trust 25,800 664
Macerich 27,200 711
Pacific Gulf Properties 31,400 612
-------
2,188
-------
RESTAURANTS/FOOD SERVICES - 1.9%
Darden Restaurants 61,800 541
Uno Restaurant* 90,000 596
Vicorp Restaurants* 5,000 66
Vie de France* 21,000 39
-------
1,242
-------
RETAIL - 2.8%
Bon-Ton Stores* 46,300 284
Borders Group* 17,500 628
Chicos* 4,500 19
CML Group 92,200 311
Drug Emporium* 92,100 391
Hot Topic* 4,400 87
Sportmart* 14,400 49
Sportmart, Class A* 14,400 40
Strouds* 19,000 62
-------
1,871
-------
RUBBER & PLASTIC - 1.0%
Goodyear Tire & Rubber 4,000 206
O'Sullivan 45,000 495
-------
701
-------
- -------------------------------------------------------------------
DESCRIPTION SHARES/PAR (000) VALUE (000)
- -------------------------------------------------------------------
SEMI-CONDUCTORS/INSTRUMENTS - 2.3%
Ess Technology* 4,600 $ 129
Intel 9,000 1,178
Silicon Valley Group* 10,000 201
-------
1,508
-------
SPECIALTY CONSTRUCTION - 1.0%
Oakwood Homes 30,000 686
-------
TECHNOLOGY, SERVICES - 2.1%
Cabletron Systems* 20,000 665
Donelly Enterprise Solutions* 13,500 331
Ontrack Data International* 27,000 405
-------
1,401
-------
TELEPHONES & TELECOMMUNICATION - 11.8%
Aerial Communications* 92,000 748
Airtouch Communications* 41,500 1,048
Amnex* 171,500 525
Clearnet, Class A* 40,000 440
Intermedia Communications
of Florida* 25,000 644
Lucent Technologies 16,500 763
Mcleod, Class A* 25,000 638
Metrocall* 25,000 125
Qualcomm* 20,000 798
Rural Cellular* 92,000 886
Smartalk Teleservices* 45,000 765
Viatel* 59,200 533
-------
7,913
-------
TESTING LABORATORIES - 0.7%
Genome Therapeutics* 45,000 484
-------
TRUCKING & LEASING - 0.2%
PST Vans* 45,900 126
-------
TOTAL COMMON STOCKS
(Cost $63,714) 65,837
-------
RIGHTS - 0.0%
Kinark* 57,500 --
-------
TOTAL RIGHTS
(Cost $0) --
-------
REPURCHASE AGREEMENT - 1.4%
Hong Kong Shanghai Bank
6.625%, dated 12/31/96,
matures 01/02/97, repurchase
price $931,343 (collateralized
by U.S. Treasury Note, par value
$905,000, 7.750%, 12/31/99;
market value $940,386) $931 931
-------
TOTAL REPURCHASE AGREEMENT
(Cost $931) 931
-------
TOTAL INVESTMENTS - 99.9%
(Cost $64,645) 66,768
-------
OTHER ASSETS AND LIABILITIES,
NET - 0.1% 51
-------
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
46
<PAGE>
COREFUND EQUITY FUNDS
- -------------------------------------------------------------------
DESCRIPTION VALUE (000)
- -------------------------------------------------------------------
NET ASSETS:
Portfolio Shares - Class Y
($0.001 par value - 1 billion
authorized) based on
6,386,529 outstanding shares $62,268
Portfolio Shares - Class A
($0.001 par value - 1 billion
authorized) based on
161,468 outstanding shares 1,711
Accumulated Net Realized
Gain on Investments 717
Net Unrealized Appreciation
on Investments 2,123
-------
TOTAL NET ASSETS - 100.0% $66,819
=======
NET ASSET VALUE, OFFERING AND
REDEMPTION PRICE PER SHARE -
CLASS Y $10.20
=======
NET ASSET VALUE AND REDEMPTION
PRICE PER SHARE - CLASS A $10.19
=======
* NON-INCOME PRODUCING SECURITY
AMOUNTS DESIGNATED AS "-" ARE EITHER $0 OR HAVE BEEN ROUNDED TO $0.
(ADR) - AMERICAN DEPOSITORY RECEIPT
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
INTERNATIONAL GROWTH FUND
[Graphic]
Pie Chart
Data for pie chart as follows:
Cash Equivalents 3%
United Kingdom 16%
Europe 31%
Smaller Markets 7%
Other Pacific Rim 21%
Japan 22%
% OF TOTAL PORTFOLIO INVESTMENTS
- -------------------------------------------------------------------
DESCRIPTION SHARES VALUE (000)
- -------------------------------------------------------------------
FOREIGN STOCKS - 96.2%
ARGENTINA - 1.3%
Banco Frances ADR 4,025 $111
Irsa GDR 1,440 46
Perez Companc 75,000 527
Telefonica Argentina ADR 45,000 1,164
-------
1,848
-------
AUSTRALIA - 2.8%
Australian Gas Light 125,000 711
Broken Hill Proprietary 105,770 1,506
Lend Lease 25,000 485
Qantas Airways 313,000 522
QBE Insurance 125,000 658
-------
3,882
-------
AUSTRIA - 0.6%
VA Technologie 5,700 894
-------
BRAZIL - 1.6%
Centrais Electricas SA GDR* 750 70
Compania Vale Rio
Doce ADR 23,900 457
Electrobras ADR 38,500 689
Telebras ADR 12,950 991
-------
2,207
-------
CHILE - 0.2%
Compania de Telecom Chile ADR 500 51
Enersis ADR 6,500 180
Santa Isabel ADR 2,100 48
Sociedad Quimica y Minera ADR 100 5
-------
284
-------
COLUMBIA - 0.0%
Cementos Diamante GDS 2,500 31
-------
47
<PAGE>
STATEMENT OF NET ASSETS
AS OF DECEMBER 31, 1996
(UNAUDITED)
INTERNATIONAL GROWTH FUND (CONTINUED)
- -------------------------------------------------------------------
DESCRIPTION SHARES VALUE (000)
- -------------------------------------------------------------------
DENMARK - 0.6%
Coloplast, Series B 3,100 $353
Falck 1,800 538
-------
891
-------
FINLAND - 0.4%
Amer Group 20,000 413
Nokia, Class A 2,700 157
-------
570
-------
FRANCE - 6.2%
Air Liquide 8,750 1,367
AXA 25,395 1,616
Imetal SA 3,487 515
Michelin, Series B 23,200 1,253
Rhone Poulenc 38,000 1,296
Schneider 20,500 949
Seita 18,400 770
Societe Nationale Elf Aquitaine 7,266 662
Valeo 3,000 185
-------
8,613
-------
GERMANY - 8.5%
Deutsche Telekom* 13,446 280
Bayer 2,500 101
BMW 400 276
Deutsche Bank AG 31,400 1,465
Eurobike* 18,000 550
Fresenius 2,000 415
Fried Krupp 2,400 391
Hoechst 52,400 2,428
Leica Camera* 14,800 459
Mannesmann 4,300 1,850
Puma 9,000 310
SGL Carbon 9,900 1,249
Veba 28,749 1,653
Wella 700 373
-------
11,800
-------
HONG KONG - 7.6%
Amoy Properties 822,000 1,185
Cheung Kong Holdings 125,000 1,111
Citic Pacific 100,000 581
Giordano 600,000 512
Hong Kong
Telecommunications 600,000 966
HSBC Holdings 103,081 2,206
Hutchison Whampoa 170,000 1,335
New World Development 180,000 1,216
Swire Pacific, Series A 72,000 687
Swire Pacific, Series B 500,000 756
-------
10,555
-------
HUNGARY - 0.1%
Pannoplast RT 3,200 118
-------
INDIA - 1.1%
Himilayan Fund* 49,718 641
Icici GDR* 60,000 585
Indian Opportunities Fund* 41,981 326
-------
1,552
-------
- -------------------------------------------------------------------
DESCRIPTION SHARES VALUE (000)
- -------------------------------------------------------------------
INDONESIA - 2.0%
Bank Bali 300,000 $ 750
Indosat "F" 275,000 757
Indosat ADR 1,800 49
PT Telekom Indonesia 670,000 1,156
-------
2,712
-------
ISRAEL - 0.1%
Tadarin Limited* 25,000 114
-------
ITALY - 2.4%
Bulgari 22,000 446
ENI Spa 189,967 974
Gucci Group ADR 2,400 154
Industrie Natuzzi Spa ADR 10,000 233
Saes Getters 12,000 186
Telecom Italia 522,000 1,355
-------
3,348
-------
JAPAN - 21.0%
77th Bank 44,000 361
Amano 44,000 471
Amway Japan Limited 8,100 260
Asahi Diamond Industrial 42,000 381
Canon 86,000 1,902
Daifuku 40,000 504
DDI 145 959
Eiden Sakakiya 30,000 303
Hitachi 120,000 1,120
Hitachi Metals 67,000 533
Honda Motor 2,000 57
Hoya 8,000 314
Ito Yokado 25,000 1,088
Jusco 3,000 102
Kamigumi 95,000 624
Kao 35,000 408
Kirin Beverage 24,000 323
Komori 22,000 468
Kuraray Warrants* 360 108
Kyocera 24,000 1,497
Mabuchi Motor 8,000 403
Marui Company 41,000 740
Mitsubishi Heavy Industries 200,000 1,590
Mitsui Fudosan 71,000 711
Nippon Express 124,000 851
Nitto Denko 32,000 470
Nomura Securities 65,000 977
Omron 4,000 75
Riso Kagaku Corporation 5,100 328
Rohm Company 23,000 1,510
Secom 7,000 424
Sharp 18,000 257
Shimachu 17,000 436
Shin-Etsu Chemical 63,000 1,148
Sony Corporation 22,000 1,442
Sumitomo Electric 78,000 1,092
Sumitomo Forestry 53,000 646
Sumitomo Trust & Banking 87,000 872
Suzuki Motor 24,000 220
Taisho Pharmaceutical 25,000 590
Tokio Marine & Fire Insurance 102,000 960
Toyota Motor 55,000 1,582
-------
29,107
-------
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
48
<PAGE>
COREFUND EQUITY FUNDS
- -------------------------------------------------------------------
DESCRIPTION SHARES VALUE (000)
- -------------------------------------------------------------------
MALAYSIA - 3.5%
AMMB Holdings 272,000 $2,284
Edaran Otomobil 80,000 800
Resorts World Berhad 88,000 401
United Engineers 150,000 1,354
-------
4,839
-------
MEXICO - 1.8%
ALFA, Series A 61,945 285
Carso Global Telecom ADR* 2,500 12
Cemex, Series B 68,500 266
Cifra SA, Series B* 180,000 220
Empresas ICA Sociedad 18,300 268
Grupo Carso SA ADS* 2,500 26
Grupo Corvi SA UBL* 120,000 82
Grupo Financiero Banamex,
Series B* 165,000 349
Grupo Modelo, Series C 12,000 69
Grupo Radio Centro ADR* 7,200 50
Grupo Televisa SA GDR* 4,000 102
Industrias CH SA, Series B* 30,000 93
Invercorporacion ADR 34 1
Kimberly Clark ADR 3,500 136
Tubos de Acero ADR* 34,000 536
-------
2,495
-------
NETHERLANDS - 2.6%
Elsevier NV 94,750 1,601
Getronics 4,800 130
ING Groep 48,805 1,757
Wolters Kluwer 800 106
-------
3,594
-------
NORWAY - 0.3%
Nera AS 8,400 364
-------
PERU - 0.2%
Credicorp 3,525 64
Telefonica de Peru ADR 11,200 213
-------
277
-------
PHILIPPINES - 1.3%
Ayala Land, Series B 500,000 571
Philippine Long Distance
Telephone ADR 24,000 1,221
-------
1,792
-------
SINGAPORE - 1.4%
Development Bank of
Singapore 141,000 1,905
Jardine Matheson &
Company (U.S.) 166 1
-------
1,906
-------
SOUTH AFRICA - 0.2%
Safmarime & Rennies Holdings 93,000 209
-------
SOUTH KOREA - 0.9%
CITIC Seoul Excel Trust IDR* 18 192
Korea Electric Power ADR 35,000 718
Korea Preferred Share Fund* 41,000 229
- -------------------------------------------------------------------
DESCRIPTION SHARES VALUE (000)
- -------------------------------------------------------------------
Samsung Electronics* 2,463 $ 45
Samsung Electronics new 1/2*
Non-voting GDS 115 5
-------
1,189
-------
SPAIN - 1.8%
Banco de Santander 23,800 1,524
Corp Financiera Reunida 75,000 246
Continente 37,872 776
-------
2,546
-------
SWEDEN - 2.3%
Ericsson, Series B 48,008 1,486
Ericsson Telephone ADR 17,000 512
SSAB A 20,000 333
Stora Kopparbergs,
Series A Free 61,000 841
-------
3,172
-------
SWITZERLAND - 5.3%
Forbo Holdings 700 282
Nestle SA Registered 1,350 1,449
Novartis AG* 2,088 2,391
Roche Holding 246 1,913
Zurich Insurance 4,960 1,378
-------
7,413
-------
THAILAND - 0.7%
Ruam Pattana Fund II 1,250,000 512
Siam Cement "F" 15,000 470
-------
982
-------
UNITED KINGDOM - 16.3%
Argyll Group 140,144 969
Barclays Bank 10,200 175
Bass 10,700 150
British Aerospace 11,750 257
British Petroleum 17,300 207
British Sky Broadcasting 7,000 63
British Sky Broadcasting ADR 4,200 221
British Steel 35,000 96
British Telecommunications 126,000 851
Cable & Wireless 93,000 773
GKN 52,500 900
Glaxo Wellcome 67,000 1,087
Granada Group 60,750 896
Imperial Chemical 9,100 120
Ladbroke 272,000 1,076
Lasmo 240,318 979
Logica 13,000 204
Marks & Spencer 127,000 1,067
McKenchie 76,500 726
Next 20,500 199
NFC 263,000 840
Perpetual 4,500 176
Prudential 19,100 161
Reckitt & Coleman 85,500 1,058
Rentokil Group 20,700 156
Reuters Holdings 16,000 206
Royal Bank of Scotland 110,000 1,061
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
49
<PAGE>
STATEMENT OF NET ASSETS
AS OF DECEMBER 31, 1996
(UNAUDITED)
INTERNATIONAL GROWTH FUND (CONCLUDED)
- -------------------------------------------------------------------
DESCRIPTION SHARES VALUE (000)
- -------------------------------------------------------------------
RTZ 9,850 $ 158
Scottish Power 120,000 723
Shell Transportation & Trading 55,500 961
SmithKline Beecham Units 20,500 284
Smiths Industries 50,782 696
Standard Chartered Bank 16,600 204
Tesco 36,300 220
TSB Lloyds Group 170,500 1,256
Unilever 47,500 1,152
Wassall 152,250 826
Wolseley 136,000 1,076
Zeneca Group 12,250 345
-------
22,575
-------
UNITED STATES - 0.4%
Near East Opportunities Fund* 59,000 622
-------
VENEZUELA - 0.7%
Cia Anonima Telecom ADR* 33,000 928
-------
TOTAL FOREIGN STOCKS
(COST $118,025) 133,429
-------
FOREIGN PREFERRED STOCK - 0.7%
AUSTRALIA - 0.7%
Newscorp 220,000 979
-------
TOTAL FOREIGN PREFERRED STOCK
(COST $1,029) 979
-------
FOREIGN CONVERTIBLE BONDS - 0.9%
JAPAN - 0.5%
Mitsubishi Bank
3.000%, 11/30/02 $630 662
-------
THAILAND - 0.4%
Siam Commerical Bank
3.250%, 01/24/04 $600 532
-------
TOTAL FOREIGN CONVERTIBLE BONDS
(COST $1,288) 1,194
-------
DEMAND DEPOSIT - 3.5%
Morgan Stanley
4.15%, 01/02/97 $4,856 4,856
-------
TOTAL DEMAND DEPOSIT
(COST $4,856) 4,856
-------
TOTAL INVESTMENTS - 101.3%
(Cost $125,198) 140,458
-------
OTHER ASSETS AND LIABILITIES, NET - (1.3%)
Income Distibution Payable (3,855)
Other Assets and Liabilities 2,068
-------
TOTAL OTHER ASSETS AND LIABILITIES, NET (1,787)
-------
NET ASSETS:
Portfolio Shares - Class Y
($0.001 par value - 25
million authorized) based
on 10,375,133 outstanding shares $121,566
Portfolio Shares - Class A
($0.001 par value - 25
million authorized) based
on 162,792 outstanding shares 2,096
Distribution in excess of net
investment income (1,123)
Accumulated net realized gain
on investments 545
Net unrealized appreciation on forward
foreign currency contracts, foreign
currency and translation of
other assets and liabilities in
foreign currency 327
Net unrealized appreciation
on investments 15,260
-------
TOTAL NET ASSETS - 100.0% $138,671
=======
NET ASSET VALUE, OFFERING AND
REDEMPTION PRICE PER SHARE
CLASS Y $13.16
=======
NET ASSET VALUE AND REDEMPTION
PRICE PER SHARE - CLASS A $13.16
=======
*NON-INCOME PRODUCING SECURITY
"F" - FOREIGN SHARES
ADR - AMERICAN DEPOSITORY RECEIPTS
ADS - AMERICAN DEPOSITORY SHARES
GDR - GLOBAL DEPOSITORY RECEIPTS
GDS - GLOBAL DEPOSITORY SHARES
IDR - INTERNATIONAL DEPOSITORY RECEIPTS
UBL - UNITS OF "B" AND "L" SHARES
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
50
<PAGE>
* COREFUND EQUITY FUNDS
BALANCED FUND
[Graphic]
Pie Chart
Data for pie chart as follows:
Cash Equivalents 6%
U.S. Government Bonds 26%
Common Stock 60%
Corporate Bonds 8%
% OF TOTAL PORTFOLIO INVESTMENTS
- -------------------------------------------------------------------
DESCRIPTION SHARES VALUE (000)
- -------------------------------------------------------------------
COMMON STOCKS - 59.5%
AEROSPACE & DEFENSE - 0.9%
General Motors, Class H 18,900 $1,063
-----
AIR TRANSPORTATION - 0.7%
Southwest Airlines 36,500 808
-----
AIRCRAFT - 1.4%
Boeing 14,600 1,553
-----
BANKS - 0.9%
Citicorp 10,000 1,030
-----
BEAUTY PRODUCTS - 2.0%
Colgate Palmolive 15,500 1,430
Procter & Gamble 7,775 836
-----
2,266
-----
BROADCASTING, NEWSPAPERS & ADVERTISING - 0.5%
Tele-Communications,
Class A* 43,000 562
-----
CHEMICALS - 0.7%
Monsanto 21,750 846
-----
COMMUNICATIONS EQUIPMENT - 1.6%
Cascade Communications* 13,900 766
Cisco Systems* 16,600 1,056
-----
1,822
-----
COMPUTERS & SERVICES - 2.1%
Compaq Computer* 7,400 549
Microsoft* 14,000 1,157
Oracle Systems* 16,700 697
-----
2,403
-----
DRUGS - 8.6%
American Home Products 20,000 1,172
Amgen* 13,600 739
Bristol-Myers Squibb 6,000 652
Chiron* 15,068 281
- -------------------------------------------------------------------
DESCRIPTION SHARES VALUE (000)
- -------------------------------------------------------------------
Genzyme* 30,000 $ 652
Glaxo (ADR) 47,400 1,505
Merck 19,000 1,506
Schering Plough 10,000 647
SmithKline Beecham (ADR) 16,000 1,088
Warner Lambert 20,000 1,500
-----
9,742
-----
ELECTRICAL EQUIPMENT - 2.8%
Emerson Electric 11,450 1,108
General Electric 14,100 1,394
Westinghouse Electric 33,300 662
-----
3,164
-----
ENTERTAINMENT - 1.0%
International Game Technology 60,000 1,095
-----
FINANCIAL SERVICES - 1.1%
FNMA 32,600 1,214
-----
FOOD, BEVERAGE & TOBACCO - 3.0%
Coca Cola 29,750 1,566
Philip Morris 9,000 1,014
Sara Lee 21,400 797
-----
3,377
-----
HEALTHCARE SERVICES - 2.1%
HBO 19,500 1,158
Health Management Associates* 52,299 1,177
-----
2,335
-----
HOTELS & LODGING - 0.9%
Hilton Hotels 37,000 967
-----
HOUSEHOLD PRODUCTS - 2.3%
Gillette 20,100 1,563
Sunbeam Oster 40,500 1,043
-----
2,606
-----
INSURANCE - 1.3%
American International Group 6,000 649
General Re 5,000 789
-----
1,438
-----
MACHINERY - 2.2%
Caterpillar 17,900 1,347
Deere 28,600 1,162
-----
2,509
-----
MEASURING DEVICES - 1.0%
Honeywell 17,000 1,118
-----
MEDICAL PRODUCTS & SERVICES - 2.6%
Cardinal Health 25,050 1,459
Guidant 15,100 861
Johnson & Johnson 13,200 657
-----
2,977
-----
METALS & MINING - 1.3%
Aluminum Company of America 23,000 1,466
-----
SEE ACCOMPANYING NOTES TO FINANICAL STATEMENTS.
-51-
<PAGE>
STATEMENT
OF
NET ASSETS
AS OF DECEMBER 31, 1996
(UNAUDITIED)
BALANCED FUND (CONCLUDED)
- -------------------------------------------------------------------
DESCRIPTION SHARES/PAR (000) VALUE (000)
- -------------------------------------------------------------------
PAPER & PAPER PRODUCTS - 1.6%
Kimberly Clark 7,304 $ 696
Willamette Industries 16,000 1,114
-----
1,810
-----
PETROLEUM & FUEL PRODUCTS - 0.9%
Anadarko Petroleum 16,500 1,068
-----
PETROLEUM REFINING - 6.4%
Amoco 12,400 998
Atlantic Richfield 9,900 1,312
Chevron 17,100 1,111
Exxon 13,500 1,323
Mobil 10,200 1,247
Texaco 12,500 1,227
-----
7,218
-----
PETROLEUM SERVICES - 1.1%
Schlumberger 13,000 1,298
-----
PHOTOGRAPHIC EQUIPMENT & SUPPLIES - 0.8%
Eastman Kodak 10,600 851
-----
RETAIL - 1.7%
Gap 30,000 904
May Department Stores 22,500 1,052
-----
1,956
-----
SEMI-CONDUCTORS/INSTRUMENTS - 1.2%
Intel 10,000 1,309
-----
TECHNOLOGY, SERVICES - 1.2%
First Data 14,000 511
Paychex 17,100 880
-----
1,391
-----
TELEPHONES & TELECOMMUNICATION - 3.6%
Alltel 30,000 941
Brooks Fiber Properties* 23,467 598
LCI International* 31,700 682
McLeod, Class A* 23,300 594
MFS Communications* 19,000 1,035
Qualcomm* 4,500 179
TCI Satellite Entertainment* 4,300 42
-----
4,071
-----
TOTAL COMMON STOCKS
(Cost $53,083) 67,333
-----
U.S. TREASURY OBLIGATIONS - 14.6%
U.S. Treasury Notes
8.500%, 07/15/97 $1,215 1,235
8.125%, 02/15/98 1,670 1,713
6.125%, 05/15/98 1,000 1,005
9.250%, 08/15/98 1,620 1,704
8.875%, 11/15/98 1,105 1,163
8.875%, 02/15/99 110 116
6.000%, 10/15/99 500 500
7.750%, 11/30/99 700 731
6.375%, 01/15/00 500 505
7.500%, 11/15/01 3,235 3,406
7.500%, 02/15/05 600 641
6.500%, 08/15/05 500 503
6.875%, 05/15/06 500 515
- -------------------------------------------------------------------
DESCRIPTION PAR (000) VALUE (000)
- -------------------------------------------------------------------
U.S. Treasury Bonds
6.000%, 08/15/99 $1,500 $1,499
7.250%, 05/15/16 500 528
8.750%, 05/15/17 665 811
-----
TOTAL U.S. TREASURY OBLIGATIONS
(Cost $16,677) 16,575
-----
U.S.GOVERNMENT AGENCY OBLIGATIONS - 5.8%
FHLB
8.120%, 09/26/06 1,800 1,813
8.000%, 10/17/11 1,250 1,234
FHLMC
6.440%, 01/28/00 500 503
8.150%, 09/12/06 500 504
8.025%, 09/15/06 1,000 1,025
8.055%, 09/30/11 1,000 1,025
FNMA
5.940%, 12/12/05 500 477
-----
TOTAL U.S.GOVERNMENT AGENCY OBLIGATIONS
(Cost $6,548) 6,581
-----
U.S. GOVERNMENT MORTGAGE-BACKED
BONDS - 5.8%
FHLMC
6.000%, 05/01/08 697 672
5.500%, 11/01/08 725 683
FNMA
6.500%, 07/01/10 249 245
6.500%, 09/01/10 324 319
6.500%, 11/01/24 484 462
GNMA
7.500%, 10/15/11 2,408 2,454
9.000%, 10/15/19 171 180
7.500%, 03/15/26 1,510 1,511
-----
TOTAL U.S. GOVERNMENT
MORTGAGE-BACKED BONDS
(Cost $6,568) 6,526
-----
CORPORATE OBLIGATIONS - 7.7%
Arco Chemical
10.250%, 11/01/10 210 270
Bellsouth
7.000%, 02/01/05 500 507
Coastal
10.250%, 10/15/04 195 230
Coca Cola
6.000%, 07/15/03 1,000 961
CSR Finance
7.700%, 07/21/25 200 201
Dayton Hudson
8.500%, 12/01/22 500 509
Donaldson Lufkin & Jenrette
6.875%, 11/01/05 185 180
First Bank System
6.875%, 09/15/07 500 491
Ford Motor Credit
6.375%, 04/15/00 500 497
6.250%, 11/08/00 500 494
7.500%, 01/15/03 1,000 1,043
SEE ACCOMPANYING NOTES TO FINANICAL STATEMENTS.
-52-
<PAGE>
* COREFUND EQUITY FUNDS
- -------------------------------------------------------------------
DESCRIPTION PAR (000) VALUE (000)
- -------------------------------------------------------------------
ITT
7.375%, 11/15/15 $ 360 $ 344
Laidlaw
8.750%, 04/15/25 75 82
MacMillan Bloedel
7.700%, 02/15/26 215 201
MBNA
7.250%, 09/15/02 185 189
Merck
6.300%, 01/01/26 1,000 899
Merrill Lynch
7.000%, 04/27/08 250 248
Midland Bank
6.950%, 03/15/11 200 196
Nationsbank
6.500%, 03/15/06 200 192
Noranda
8.125%, 06/15/04 195 206
Provident Bank
6.125%, 12/15/00 25 25
Royal Bank of Scotland
6.375%, 02/01/11 205 189
Santander
7.250%, 11/01/15 100 97
U.S. Bancorp
6.750%, 10/15/05 500 490
--------
TOTAL CORPORATE OBLIGATIONS
(Cost $8,899) 8,741
--------
REPURCHASE AGREEMENTS - 5.7%
Aubrey Lanston
6.600%, dated 12/31/96,
matures 01/02/97, repurchase
price $1,622,595 (collateralized
by U.S. Treasury Note, par value
$1,540,000, 8.250%, 07/15/98;
market value $1,658,644) 1,622 1,622
Hong Kong Shanghai Bank
6.625%, dated 12/31/96,
matures 01/02/97, repurchase
price $1,621,597 (collateralized
by U.S. Treasury Note, par value
$1,670,000, 5.125%, 11/30/98;
market value $1,660,088) 1,621 1,621
- -------------------------------------------------------------------
DESCRIPTION PAR (000) VALUE (000)
- -------------------------------------------------------------------
Merrill Lynch
6.000%, dated 12/31/96,
matures 01/02/97, repurchase
price $1,622,541 (collateralized
by U.S. Treasury Note, par value
$1,640,000, 6.000%, 05/31/98;
market value $1,659,860) $1,622 $1,622
Swiss Bank
6.750%, dated 12/31/96,
matures 01/02/97, repurchase
price $1,621,608 (collateralized
by U.S. Treasury Note, par value
$1,630,000, 5.750%, 09/30/97;
market value $1,655,754) 1,621 1,621
--------
TOTAL REPURCHASE AGREEMENTS
(Cost $6,486) 6,486
--------
TOTAL INVESTMENTS - 99.1%
(Cost $98,261) 112,242
--------
OTHER ASSETS AND LIABILITIES,
NET - 0.9% 1,029
--------
NET ASSETS:
Portfolio Shares - Class Y
($0.001 par value - 100 million
authorized) based on 8,877,302
outstanding shares 95,979
Portfolio Shares - Class A
($0.001 par value - 100 million
authorized) based on 285,134
outstanding shares 3,083
Accumulated Net Realized
Gain on Investments 228
Net Unrealized Appreciation
on Investments 13,981
--------
TOTAL NET ASSETS - 100.0% $113,271
========
NET ASSET VALUE, OFFERING AND
REDEMPTION PRICE PER SHARE -
CLASS Y $12.36
========
NET ASSET VALUE AND REDEMPTION
PRICE PER SHARE - CLASS A $12.37
========
*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.
-53-
<PAGE>
STATEMENT
OF
NET ASSETS
AS OF
DECEMBER 31, 1996
(UNAUDITED)
SHORT TERM INCOME FUND
[Graphic]
Pie Chart
Data for pie chart as follows:
Cash Equivalent 19%
Corporate Bonds 27%
U.S. Treasury Obligations 54%
% OF TOTAL PORTFOLIO INVESTMENTS
- -------------------------------------------------------------------
DESCRIPTION PAR (000) VALUE (000)
- -------------------------------------------------------------------
CORPORATE BONDS - 18.2%
American General Finance
7.000%, 10/01/97 $ 985 $ 993
AT&T Capital
5.970%, 02/27/98 1,000 997
Lehman Brothers Holdings
6.375%, 06/01/98 500 501
Smith Barney
6.000%, 03/15/97 600 601
Time Warner
7.450%, 02/01/98 735 744
Transcont Gas
8.125%, 01/15/97 525 525
USX
6.650%, 10/09/97 1,200 1,205
--------
TOTAL CORPORATE BONDS
(Cost $5,557) 5,566
--------
U.S. TREASURY OBLIGATIONS - 53.9%
U.S. Treasury Notes
6.500%, 05/15/97 500 502
5.875%, 07/31/97 1,000 1,002
5.625%, 08/31/97 1,500 1,501
5.750%, 10/31/97 500 501
7.375%, 11/15/97 4,000 4,058
6.000%, 12/31/97 2,575 2,585
5.625%, 01/31/98 750 750
7.250%, 02/15/98 1,000 1,016
6.125%, 03/31/98 2,500 2,512
8.250%, 07/15/98 2,000 2,071
--------
TOTAL U.S. TREASURY OBLIGATIONS
(Cost $16,474) 16,498
--------
- -------------------------------------------------------------------
DESCRIPTION PAR (000) VALUE (000)
- -------------------------------------------------------------------
ASSET-BACKED SECURITIES - 8.3%
Independent National Mortgage,
Series 96-A, Class A1
6.710%, 09/25/26 $900 $ 907
Money Store Home Equity Loan
Trust, Series 93-B
5.400%, 08/15/05 421 417
Union Acceptance,
Series 96-A
5.400%, 04/07/03 737 731
WFS Financial Owner Trust
(CMO) Series 1996-B, Class A2
6.200%, 05/20/99 488 490
--------
TOTAL ASSET-BACKED SECURITIES
(Cost $2,546) 2,545
--------
REPURCHASE AGREEMENT - 18.6%
Hong Kong Shanghai Bank
6.625%, dated 12/31/96, matures
01/02/97, repurchase price
$5,673,087 (collateralized by
U.S. Treasury Note, par value
$5,850,000, 5.125%, 11/30/98;
market value $5,815,278) 5,671 5,671
--------
TOTAL REPURCHASE AGREEMENT
(Cost $5,671) 5,671
--------
TOTAL INVESTMENTS - 99.0%
(Cost $30,248) 30,280
--------
OTHER ASSETS AND LIABILITIES,
NET - 1.0% 314
--------
NET ASSETS:
Portfolio Shares - Class Y
($0.001 par value - 1 billion
authorized) based on 3,053,332
outstanding shares 30,505
Portfolio Shares - Class A
($0.001 par value - 1 billion
authorized) based on 14,570
outstanding shares 145
Accumulated Net Realized Loss
on Investments (88)
Net Unrealized Appreciation
on Investments 32
--------
TOTAL NET ASSETS - 100.0% $30,594
========
NET ASSET VALUE, OFFERING AND
REDEMPTION PRICE PER SHARE -
CLASS Y $9.97
========
NET ASSET VALUE AND REDEMPTION
PRICE PER SHARE - CLASS A $9.97
========
(CMO) - COLLATERALIZED MORTGAGE OBLIGATION
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
54
<PAGE>
* COREFUND FIXED INCOME FUNDS
SHORT-INTERMEDIATE BOND FUND
[Graphic]
Pie Chart
Data for pie chart as follows:
Cash Equivalent 3%
Corporate Bonds 35%
U.S. Agency
Backed Bonds 3%
U.S. Treasury
Obligations 59%
% OF TOTAL PORTFOLIO INVESTMENTS
- ---------------------------------------------------------------------------
DESCRIPTION PAR (000) VALUE (000)
- ---------------------------------------------------------------------------
U.S. TREASURY OBLIGATIONS - 59.4%
U.S. Treasury Notes
6.000%, 08/31/97 $1,500 $ 1,504
7.375%, 11/15/97 4,000 4,058
5.125%, 02/28/98 1,500 1,490
6.000%, 05/31/98 12,145 12,183
6.125%, 08/31/98 9,035 9,076
8.875%, 02/15/99 6,270 6,633
6.000%, 10/15/99 2,200 2,201
7.750%, 12/31/99 2,500 2,615
7.750%, 01/31/00 8 8
7.125%, 02/29/00 14,335 14,754
6.750%, 04/30/00 300 306
6.375%, 03/31/01 9,645 9,711
6.625%, 07/31/01 9,680 9,831
6.500%, 08/31/01 3,850 3,892
7.500%, 05/15/02 8,850 9,358
7.000%, 07/15/06 10,465 10,871
-------
TOTAL U.S. TREASURY OBLIGATIONS
(Cost $98,026) 98,491
-------
U.S. AGENCY MORTGAGE-BACKED BONDS - 2.7%
FHLMC
6.750%, 03/15/07 1,755 1,776
FNMA
6.500%, 07/01/10 1,568 1,540
6.500%, 10/01/10 1,201 1,179
-------
TOTAL U.S. AGENCY MORTGAGE-BACKED BONDS
(Cost $4,481) 4,495
-------
CORPORATE OBLIGATIONS - 20.6%
Associates Corporation of
North America
6.375%, 08/15/98 1,500 1,508
AT&T Capital
5.970%, 02/27/98 2,255 2,249
- ---------------------------------------------------------------------------
DESCRIPTION PAR (000) VALUE (000)
- ---------------------------------------------------------------------------
Boise Cascade
9.850%, 06/15/02 $1,705 $1,920
Coastal
8.125%, 09/15/02 1,370 1,454
Comdisco
6.375%, 11/30/01 2,285 2,245
CSR America
6.875%, 07/21/05 1,670 1,655
Ford Motor Credit
6.800%, 08/15/97 1,000 1,008
H.F. Ahmanson
6.000%, 03/27/97 1,500 1,501
Hanson Overseas
6.750%, 09/15/05 1,770 1,732
Lehman Brothers Holding
8.750%, 05/15/02 2,000 2,155
Nabisco
6.850%, 06/15/05 1,425 1,386
Noranda
8.125%, 06/15/04 1,350 1,424
Paine Webber Group
6.500%, 11/01/05 1,745 1,647
Penn Power and Light
7.750%, 05/01/02 1,280 1,347
Santander Financial Issuances
7.875%, 04/15/05 1,625 1,700
Security Pacific
11.500%, 11/15/00 1,955 2,275
Societe Generale
7.400%, 06/01/06 1,755 1,786
Transcont Gas
8.125%, 01/15/97 1,055 1,055
United Air Lines
6.750%, 12/01/97 2,435 2,445
USX
9.625%, 08/15/03 1,490 1,686
-------
TOTAL CORPORATE OBLIGATIONS
(Cost $34,130) 34,178
-------
ASSET-BACKED SECURITIES - 13.7%
Aames Mortgage Trust,
Ser 96-B A1B
7.275%, 05/15/20 2,100 2,133
Delta Funding Home Equity Loan
Trust, Ser 96-1 A4
7.230%, 06/25/11 1,520 1,536
Eqcc Series 1996-4, Class A5
6.710%, 07/15/11 1,875 1,875
Equivantage Home Loan Trust,
Ser 96-1 A1
6.550%, 10/25/25 1,101 1,087
Independent National Mortgage,
Ser 96-A A1
6.710%, 09/25/26 3,812 3,839
Money Store Home Equity Trust,
Ser 93-B
5.400%, 08/15/05 2,223 2,199
Money Store Home Equity Trust,
Ser 96-B A7
7.550%, 06/15/20 3,000 3,077
SEE ACCOMPANYING NOTES TO FINANICAL STATEMENTS.
55
<PAGE>
STATEMENT
OF
NET ASSETS
AS OF DECEMBER 31, 1996
(UNAUDITIED)
SHORT-TERM ITERMEDIATE BOND FUND (CONCLUDED)
- ----------------------------------------------------------------------------
DESCRIPTION PAR (000) VALUE (000)
- ----------------------------------------------------------------------------
Sears Credit Account Master
Trust, Ser 95-3 A
7.000%, 10/15/04 $3,000 $ 3,063
Standard Credit Card Master
Trust, Ser 95-6 A
6.750%, 06/07/00 2,000 2,021
Union Acceptance, Ser 96-A
5.400%, 04/07/03 1,931 1,915
-------
TOTAL ASSET-BACKED SECURITIES
(Cost $22,536) 22,745
-------
REPURCHASE AGREEMENT - 3.2%
Hong Kong Shanghai Bank
6.625%, dated 12/31/96,
matures 01/02/97, repurchase
price $5,248,931 (collateralized
by U.S. Treasury Note, par value
$5,415,000, 5.125%, 11/30/98;
market value $5,382,860) 5,247 5,247
-------
TOTAL REPURCHASE AGREEMENT
(Cost $5,247) 5,247
-------
TOTAL INVESTMENTS - 99.6%
(Cost $164,420) 165,156
-------
OTHER ASSETS AND LIABILITIES,
NET - 0.4% 664
-------
- ----------------------------------------------------------------------------
DESCRIPTION VALUE (000)
- ----------------------------------------------------------------------------
NET ASSETS:
Portfolio Shares - Class Y
($0.001 par value - 100 million
authorized) based on 16,500,050
outstanding shares $164,081
Portfolio Shares - Class A
($0.001 par value - 100 million
authorized) based on 309,984
outstanding shares 3,675
Accumulated Net Realized Loss
on Investments (2,672)
Net Unrealized Appreciation
on Investments 736
-------
TOTAL NET ASSETS - 100.0% $165,820
=======
NET ASSET VALUE, OFFERING AND
REDEMPTION PRICE PER SHARE -
CLASS Y $9.86
=======
NET ASSET VALUE AND REDEMPTION
PRICE PER SHARE - CLASS A $9.86
=======
FHLMC - FEDERAL HOME LOAN MORTGAGE CORPORATION
FNMA - FEDERAL NATIONAL MORTGAGE ASSOCIATION
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
-56-
<PAGE>
* COREFUND FIXED INCOME FUNDS
GOVERNMENT INCOME FUND
[Graphic]
Pie Chart
Data for pie chart as follows:
U.S. Agency Backed Bonds 5%
U.S. Treasury
Obligations 27%
U.S. Government Backed Bonds 68%
% OF TOTAL PORTFOLIO INVESTMENTS
- -------------------------------------------------------------------
DESCRIPTION PAR (000) VALUE (000)
- -------------------------------------------------------------------
U.S. GOVERNMENT MORTGAGE-BACKED
BONDS - 67.8%
FHLMC
7.000%, 06/01/26
FNMA
7.000%, 11/01/26 $ 420 $ 411
GNMA
8.000%, 09/15/09 685 708
8.000%, 02/15/22 357 365
8.000%, 09/15/22 59 61
8.000%, 10/15/22 270 276
8.000%, 11/15/22 471 481
7.000%, 04/15/23 350 343
7.500%, 08/15/23 1,216 1,217
6.500%, 11/15/23 459 438
7.000%, 01/15/24 888 868
8.000%, 05/15/25 843 860
6.500%, 12/15/25 998 952
7.500%, 02/15/26 489 490
8.000%, 05/15/26 985 1,005
8.000%, 06/15/26 696 711
8.000%, 08/15/26 2,980 3,042
8.000%, 09/15/26 2,000 2,041
-------
TOTAL U.S. GOVERNMENT
MORTGAGE-BACKED BONDS
(Cost $14,235) 14,269
-------
U.S. AGENCY MORTGAGE-BACKED BONDS - 5.1%
FHLMC
6.000%, 05/01/08 350 337
FNMA
7.000%, 10/01/22 742 726
-------
TOTAL U.S. AGENCY MORTGAGE-BACKED BONDS
(Cost $1,099) 1,063
-------
- -------------------------------------------------------------------
DESCRIPTION PAR (000) VALUE (000)
- -------------------------------------------------------------------
U.S. TREASURY OBLIGATIONS - 27.3%
U.S. Treasury Notes
6.375%, 05/15/99 $1,000 $1,009
6.500%, 05/31/01 320 324
6.500%, 08/31/01 1,500 1,516
7.000%, 07/15/06 1,800 1,870
U.S. Treasury Bond
6.875%, 08/15/25 1,000 1,019
-------
TOTAL U.S. TREASURY OBLIGATIONS
(Cost $5,753) 5,738
-------
REPURCHASE AGREEMENT - 0.4%
Hong Kong Shanghai Bank
6.625%, dated 12/31/96,
matures 01/02/97, repurchase
price $94,035 (collateralized
by U.S. Treasury Note, par value
$95,000, 5.125%, 11/30/98;
market value $94,436) 94 94
-------
TOTAL REPURCHASE AGREEMENT
(Cost $94) 94
-------
TOTAL INVESTMENTS - 100.6%
(Cost $21,181) 21,164
-------
OTHER ASSETS AND LIABILITIES,
NET - (0.6%) (118)
-------
NET ASSETS:
Portfolio Shares - Class Y
($0.001 par value - 100 million
authorized) based on 2,001,961
outstanding shares 19,811
Portfolio Shares - Class A
($0.001 par value - 100 million
authorized) based on 153,463
outstanding shares 1,564
Accumulated Net Realized Loss
on Investments (312)
Net Unrealized Depreciation
on Investments (17)
-------
TOTAL NET ASSETS - 100.0% $21,046
=======
NET ASSET VALUE, OFFERING AND
REDEMPTION PRICE PER SHARE -
CLASS Y $9.76
=======
NET ASSET VALUE AND REDEMPTION
PRICE PER SHARE - CLASS A $9.77
=======
FHLMC - FEDERAL HOME LOAN MORTGAGE CORPORATION
FNMA - FEDERAL NATIONAL MORTGAGE CORPORATION
GNMA - GOVERNMENT NATIONAL MORTGAGE CORPORATION
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
-57-
<PAGE>
STATEMENT
OF
NET ASSETS
AS OF
DECEMBER 31, 1996
(UNAUDITED)
BOND FUND
[Graphic]
Pie Chart
Data for pie chart as follows:
Corporate Bonds 34%
U.S. Treasury Obligations 39%
U.S. Government Backed Bonds 27%
% OF TOTAL PORTFOLIO INVESTMENTS
- ---------------------------------------------------------------------------
DESCRIPTION PAR (000) VALUE (000)
- ---------------------------------------------------------------------------
U.S. TREASURY OBLIGATIONS - 38.6%
U.S. Treasury Notes
6.125%, 08/31/98 $6,610 $ 6,640
5.625%, 11/30/98 4,075 4,056
8.875%, 02/15/99 12,755 13,494
7.750%, 01/31/00 503 526
7.125%, 02/29/00 8,475 8,723
6.750%, 04/30/00 5,585 5,690
6.625%, 07/31/01 7,705 7,825
7.500%, 05/15/02 4,360 4,610
7.000%, 07/15/06 15,100 15,685
U.S. Treasury Bonds
7.875%, 02/15/21 2,560 2,895
8.000%, 11/15/21 2,090 2,398
6.875%, 08/15/25 150 153
6.750%, 08/15/26 1,190 1,200
6.500%, 11/15/26 2,000 1,962
-------
TOTAL U.S. TREASURY OBLIGATIONS
(Cost $75,502) 75,857
-------
U.S. GOVERNMENT MORTGAGE-BACKED BONDS - 27.4%
FHLMC
6.750%, 03/15/07 2,355 2,384
7.500%, 10/01/10 2,806 2,847
8.000%, 07/01/25 3,592 3,662
FNMA
6.500%, 07/01/10 3,276 3,216
6.500%, 09/01/10 3,691 3,624
7.500%, 06/01/11 2,613 2,649
6.500%, 03/25/19 1,690 1,662
8.500%, 01/25/20 2,111 2,175
8.500%, 02/01/25 3,712 3,844
7.500%, 08/01/25 3,114 3,112
8.500%, 08/01/26 3,700 3,832
7.000%, 11/01/26 4,200 4,108
GNMA
7.750%, 06/16/20 1,780 1,834
7.500%, 12/15/25 7,850 7,853
- ---------------------------------------------------------------------------
DESCRIPTION PAR (000) VALUE (000)
- ---------------------------------------------------------------------------
7.500%, 06/15/26 $4,150 $ 4,152
8.000%, 08/15/26 2,877 2,936
-------
TOTAL U.S. GOVERNMENT
MORTGAGE-BACKED BONDS
(Cost $53,687) 53,890
-------
ASSET-BACKED SECURITIES - 9.5%
AAMES Mortgage Trust,
Ser 96-B A1B
7.275%, 05/15/20 2,489 2,528
Contimortgage Home Equity
Loan Trust, Ser 96-4 A7
6.990%, 03/15/21 2,200 2,173
Delta Funding Home Equity
Loan Trust, Ser 96-1 A4
7.230%, 06/25/11 3,200 3,234
EQCC Ser 96-4 A5
6.710%, 07/15/11 2,000 1,999
Equivantage Home Equity Loan
Trust, Ser 96-1 A1
6.550%, 10/25/25 1,954 1,929
Independent National Mortgage,
Ser 96-A A1
6.710%, 09/25/26 135 136
Money Store Home Equity Trust,
Ser 93-B A1
5.400%, 08/15/05 125 124
Money Store Home Equity Trust,
Ser 96-B A7
7.550%, 06/15/20 3,145 3,226
Money Store Home Equity Trust,
Ser 96-C A6
7.690%, 05/15/24 1,765 1,805
UCFC, Ser 96-D A2
6.381%, 07/15/10 1,480 1,481
-------
TOTAL ASSET-BACKED SECURITIES
(Cost $18,508) 18,635
-------
NON-AGENCY MORTGAGE-BACKED BONDS - 1.4%
GE Capital Mortgage Services,
Ser 94-2 A4 (CMO)
6.000%, 01/25/09 2,705 2,665
-------
TOTAL NON-AGENCY MORTGAGE-BACKED BONDS
(Cost $2,622) 2,665
-------
CORPORATE BONDS - 22.4%
American Stores
8.000%, 06/01/26 2,110 2,168
AT&T Capital
5.970%, 02/27/98 2,210 2,205
Banc One
7.750%, 07/15/25 2,235 2,291
Boise Cascade
7.350%, 02/01/16 2,450 2,315
Chase Manhattan
9.750%, 11/01/01 2,665 2,988
SEE ACCOMPANYING NOTES TO FINANICAL STATEMENTS.
-58-
<PAGE>
* COREFUND FIXED INCOME FUNDS
- ---------------------------------------------------------------------------
DESCRIPTION PAR (000) VALUE (000)
- ---------------------------------------------------------------------------
Coastal
10.250%, 10/15/04 $ 1,940 $ 2,292
CSR Finance
7.700%, 07/21/25 1,835 1,849
H.F. Ahmanson
6.000%, 03/27/97 1,900 1,901
Hanson Overseas
6.750%, 09/15/05 2,000 1,958
ITT
7.375%, 11/15/15 2,140 2,046
Lehman Brothers Holding
7.625%, 07/15/99 2,105 2,158
8.750%, 05/15/02 1,650 1,778
Nabisco
7.550%, 06/15/15 1,845 1,815
Nationsbank
7.800%, 09/15/16 2,000 2,068
Noranda
8.125%, 06/15/04 1,940 2,047
Paine Webber
7.625%, 10/15/09 2,775 2,796
Quebec Province
7.500%, 07/15/23 2,105 2,092
Santander Fin Issuances
6.375%, 02/15/11 1,955 1,806
Smurfit Capital Funding
7.500%, 11/20/25 1,975 1,889
Societe Generale
7.400%, 06/01/06 2,115 2,152
Tosco
7.625%, 05/15/06 1,410 1,442
-------
Total Corporate Bonds
(Cost $43,990) 44,056
-------
TOTAL INVESTMENTS - 99.3%
(Cost $194,309) 195,103
-------
OTHER ASSETS AND LIABILITIES,
NET - 0.7% 1,319
-------
- ---------------------------------------------------------------------------
DESCRIPTION VALUE (000)
- ---------------------------------------------------------------------------
NET ASSETS:
Portfolio Shares - Class Y
($.001 par value - 1 billion
authorized) based on 18,954,780
outstanding shares $195,219
Portfolio Shares - Class A
($.001 par value - 1 billion
authorized) based on 133,755
outstanding shares 1,415
Accumulated Net Realized Loss
on Investments (1,004)
Net Unrealized Appreciation
on Investments 794
Distributions in Excess of Net
Investment Income (2)
-------
TOTAL NET ASSETS - 100.0% $196,422
=======
NET ASSET VALUE, OFFERING AND
REDEMPTION PRICE PER SHARE -
CLASS Y $10.29
=======
NET ASSET VALUE AND REDEMPTION
PRICE PER SHARE - CLASS A $10.29
=======
(CMO) - COLLATERALIZED MORTGAGE OBLIGATION
FHLMC - FEDERAL HOME LOAN MORTGAGE CORPORATION
FNMA - FEDERAL NATIONAL MORTGAGE ASSOCIATION
GNMA - GOVERNMENT NATIONAL MORTGAGE ASSOCIATION
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
-59-
<PAGE>
STATEMENT
OF
NET ASSETS
AS OF
DECEMBER 31, 1996
(UNAUDITED)
GLOBAL BOND FUND
[Graphic]
Pie Chart
Data for pie chart as follows:
Australia 10%
Cash Equivalent 5%
Denmark 6%
France 8%
United States 31%
Germany 23%
Portugal 5%
Netherlands 4%
New Zealand 8%
% OF TOTAL PORTFOLIO INVESTMENTS
- -------------------------------------------------------------------
DESCRIPTION PAR (000)(1) VALUE (000)
- -------------------------------------------------------------------
FOREIGN BONDS - 48.0%
AUSTRALIA - 4.4%
New South Wales Treasury
12.000%, 12/01/01 $1,600 $ 1,529
-----
DENMARK - 5.7%
Kingdom of Denmark
8.000%, 05/15/03 5,478 1,032
8.000%, 03/15/06 5,015 937
-----
1,969
-----
FRANCE - 7.8%
Electric de France
7.500%, 05/11/12 3,950 858
Government of France
7.500%, 04/25/05 6,028 1,303
Kansai Electric Power
7.000%, 08/04/03 2,700 567
-----
2,728
-----
GERMANY - 16.8%
Bundesrepublic
7.375%, 01/03/05 5,765 4,157
6.250%, 01/04/24 450 277
World Bank
7.125%, 04/12/05 1,980 1,396
-----
5,830
-----
NETHERLANDS - 4.1%
LKB Baden-Wuerttenburg
5.750%, 02/10/04 2,420 1,422
-----
NEW ZEALAND - 4.9%
Government of New Zealand
8.000%, 02/15/01 2,336 1,706
-----
- -------------------------------------------------------------------
DESCRIPTION PAR (000)(1) VALUE (000)
- -------------------------------------------------------------------
PORTUGAL - 4.3%
Republic of Portugal
7.700%, 06/07/05 FRF 6,910 $ 1,511
-----
TOTAL FOREIGN BONDS
(Cost $16,030) 16,695
-----
U.S. TREASURY OBLIGATIONS - 27.2%
U.S. Treasury Notes
4.750%, 09/30/98 6,800 6,679
6.875%, 07/31/99 1,180 1,204
7.750%, 11/30/99 1,510 1,577
-----
TOTAL U.S. TREASURY OBLIGATIONS
(Cost $9,461) 9,460
-----
EURO COMMERCIAL PAPER - 17.1%
Depfa Bank Europe
5.470%, 03/03/97 $1,000 989
Ford Credit Europe
5.450%, 02/28/97 $1,000 989
Kommunekredit
5.520%, 01/31/97 $1,000 989
National Bank of Australia
5.440%, 02/21/97 $1,000 989
Societe Generale Australia
5.470%, 03/12/97 $1,000 989
Transpower New Zealand
5.470%, 03/04/97 $1,000 989
-----
TOTAL EURO COMMERCIAL PAPER
(Cost $5,950) 5,934
-----
DEMAND DEPOSIT - 4.9%
Morgan Stanley
4.15%, 01/02/97 1,693 1,693
-----
TOTAL DEMAND DEPOSIT
(Cost $1,693) 1,693
-----
DEBT OPTIONS - 0.2%
FRANCE - 0.1%
Government of France OAT
7.5% Put, strike @ 112.03* 23,000 25
GERMANY - 0.1%
Bundesrepublic 7.375% Put,
strike @ 110.00* 7,300 36
-----
TOTAL DEBT OPTIONS
(Cost $149) 61
-----
TOTAL INVESTMENTS - 97.4%
(Cost $33,283) 33,843
-----
OTHER ASSETS AND LIABILITIES - 2.6%
Income Distribution Payable (941)
Accrued Income 890
Capital Shares Sold 792
Other Assets and Liabilities 182
-----
TOTAL OTHER ASSETS AND LIABILITIES, NET 923
-----
SEE ACCOMPANYING NOTES TO FINANICAL STATEMENTS.
-60-
<PAGE>
*COREFUND FIXED INCOME FUNDS
- -------------------------------------------------------------------
DESCRIPTION VALUE (000)
- -------------------------------------------------------------------
NET ASSETS:
Portfolio Shares - Class Y
($0.001 par value - 25 million
authorized) based on 3,565,455
outstanding shares $35,412
Portfolio Shares - Class A
($0.001 par value - 25 million
authorized) based on 17,239
outstanding shares 172
Distribution in excess of net
investment income (54)
Accumulated net realized loss
on investments (1,499)
Net unrealized appreciation on forward
foreign currency contracts, foreign
currency and translation
of other assets and liabilities
in foreign currency 175
Net unrealized appreciation
on investments 560
-------
TOTAL NET ASSETS - 100.0% $34,766
=======
NET ASSET VALUE, OFFERING AND
REDEMPTION PRICE PER SHARE -
CLASS Y $9.70
=======
NET ASSET VALUE AND REDEMPTION
PRICE PER SHARE - CLASS A $9.69
=======
* NON-INCOME PRODUCING SECURITY
FRF - FRENCH FRANCS
(1) IN LOCAL CURRENCY UNLESS OTHERWISE INDICATED
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
INTERMEDIATE MUNICIPAL BOND FUND
[Graphic]
Pie Chart
Data for pie chart as follows:
Cash Equivalents 3%
General Obligations 42%
Revenue Bonds 45%
Pre-Refunded Securities 10%
% OF TOTAL PORTFOLIO INVESTMENTS
- -------------------------------------------------------------------
DESCRIPTION PAR (000) VALUE (000)
- -------------------------------------------------------------------
MUNICIPAL BONDS - 100.5%
COLORADO - 5.4%
El Paso County, Colorado GO
5.200%, 12/01/02 $ 100 $ 103
----
FLORIDA - 2.7%
Jacksonville, Florida Electric
Authority Revenue Bond,
Series 3-A
5.200%, 10/01/02 50 51
----
GEORGIA - 2.7%
De Kalb County, Georgia Health
Facilities GO
5.300%, 01/01/03 50 52
----
HAWAII - 2.7%
Hawaii State GO
5.200%, 06/01/04 50 51
----
ILLINOIS - 4.4%
Bloomingdale, Illinois GO
5.450%, 01/01/09 85 85
----
MARYLAND - 2.7%
Maryland State Health & Higher
Education Facilities Authority
Revenue Bond for Johns
Hopkins Project
5.125%, 07/01/03 50 52
----
MASSACHUSETTS - 2.7%
Massachusetts Bay Transportation
Authority Revenue Bond, Series A
5.300%, 03/01/05 50 52
----
MICHIGAN - 8.9%
Delta County, Michigan
Environmental Improvement
Revenue Bond for Mead Escambia
Paper Project, Series C (A) (B) (C)
5.000%, 01/02/97 70 70
-61-
<PAGE>
STATEMENT
OF
NET ASSETS
AS OF DECEMBER 31, 1996
(UNAUDITIED)
INTERMEDIATE MUNICIPAL BOND FUND (CONCLUDED)
- -------------------------------------------------------------------
DESCRIPTION PAR (000) VALUE (000)
- -------------------------------------------------------------------
Grand Haven, Michigan Electric
Revenue Bond (MBIA)
5.000%, 07/01/04 $ 100 $ 101
-----
171
-----
NEW JERSEY - 6.2%
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 - 56.9%
Allegheny County, Pennsylvania
Hospital Development Authority
Revenue Bond Pittsburgh Mercy
Hospital Project (AMBAC)
5.500%, 08/15/11 90 91
Allegheny County, Pennsylvania,
Series C-33, GO
7.450%, 02/15/98 50 52
Bethlehem, Pennsylvania School
District GO (FGIC)
4.800%, 09/01/01 50 50
Governor Mifflin, Pennsylvania
School District GO (AMBAC)
4.850%, 11/15/01 50 51
Lehigh County, Pennsylvania
GO (FGIC)
5.125%, 11/15/08 110 110
Luzerne County, Pennsylvania,
Series A, GO, Callable 09/15/00
at 100 (FGIC)
5.850%, 09/15/02 50 53
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 90
Pennsylvania State Industrial
Development Authority Revenue
Bond (AMBAC)
5.000%, 07/01/04 100 102
Pennsylvania State Infrastructure
Authority Revenue Bond for
Pennvest Loan Pool Project
(MBIA)
6.000%, 09/01/03 65 70
- -------------------------------------------------------------------
DESCRIPTION PAR (000) VALUE (000)
- -------------------------------------------------------------------
Pennsylvania State Turnpike
Commission Revenue Bond,
Series 1, Pre-Refunded 12/01/01
at 102 (FGIC)
7.150%, 12/01/11 $ 50 $ 57
Pennsylvania State Turnpike
Commission Revenue Bond,
Series F, Pre-Refunded 12/01/99
at 102 (AMBAC)
7.250%, 12/01/17 50 55
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
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
-----
1,094
-----
WYOMING - 5.2%
Lincoln County, Wyoming
Pollution Control Revenue
Bond For Exxon Project,
Series D (A)
5.000%, 01/02/97 100 100
-----
TOTAL MUNICIPAL BONDS
(Cost $1,909) 1,931
-----
CASH EQUIVALENT - 3.2%
SEI Institutional Tax Free Portfolio 61 61
-----
TOTAL CASH EQUIVALENT
(Cost $61) 61
-----
TOTAL INVESTMENTS - 103.7%
(Cost $1,970) 1,992
-----
OTHER ASSETS AND LIABILITIES,
NET - (3.7%) (71)
-----
SEE ACCOMPANYING NOTES TO FINANICAL STATEMENTS.
-62-
<PAGE>
*COREFUND FIXED INCOME FUNDS
- -------------------------------------------------------------------
DESCRIPTION VALUE (000)
- -------------------------------------------------------------------
NET ASSETS:
Portfolio Shares - Class Y
($0.001 par value - 100 million
authorized) based on 94,917
outstanding shares $ 983
Portfolio Shares - Class A
($0.001 par value - 100
million authorized) based on
96,069 outstanding shares 995
Accumulated Net Realized Loss
on Investments (79)
Net Unrealized Appreciation
on Investments 22
------
TOTAL NET ASSETS - 100.0% $1,921
======
NET ASSET VALUE, OFFERING AND
REDEMPTION PRICE PER SHARE -
CLASS Y $10.06
======
NET ASSET VALUE AND REDEMPTION
PRICE PER SHARE - CLASS A $10.06
======
(A) VARIABLE RATE SECURITY - THE RATE REFLECTED ON THE STATEMENT OF NET
ASSETS IS THE RATE IN EFFECT ON DECEMBER 31, 1996.
(B) PUT OR DEMAND FEATURES EXIST REQUIRING THE ISSUER TO REPURCHASE THE
INSTRUMENT PRIOR TO MATURITY. THE MATURITY DATE SHOWN IS THE LESSOR OF THE
PUT DEMAND 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
GO - GENERAL OBLIGATION
(MBIA) - MUNICIPAL BOND INVESTORS ASSURANCE
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
PENNSYLVANIA MUNICIPAL BOND FUND
[Graphic]
Pie Chart
Data for pie chart as follows:
Cash Equivalents 1%
General Obligations 21%
Pre-Refunded Securities 1%
Revenue Bonds 77%
% OF TOTAL PORTFOLIO INVESTMENTS
- -----------------------------------------------------------------------
DESCRIPTION PAR (000) VALUE (000)
- -----------------------------------------------------------------------
MUNICIPAL BONDS - 97.5%
GEORGIA - 0.3%
Hapeville, Georgia Industrial
Development Authority
Revenue Bond for Hapeville
Hotel Project (A) (B) (C)
5.000%, 11/01/15 $ 30 $ 30
-----
MICHIGAN - 0.3%
Delta County, Michigan
Environmental Improvement
Revenue Bond for Mead
Escambia Paper Project,
Series C (A) (B) (C)
5.000%, 12/01/23 30 30
-----
PENNSYLVANIA - 94.3%
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%, 04/01/01 200 215
Allegheny County, Pennsylvania
Hospital Development Authority
Revenue Bond for Montefiore
Hospital Association
5.800%, 10/01/03 125 127
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 15 15
-63-
<PAGE>
STATEMENT
OF
NET ASSETS
AS OF DECEMBER 31, 1996
(UNAUDITIED)
PENNSYLVANIA MUNICIPAL BOND FUND (CONCLUDED)
- -------------------------------------------------------------------
DESCRIPTION PAR (000) VALUE (000)
- -------------------------------------------------------------------
Allegheny County, Pennsylvania
Sanitation Authority Sewer
Revenue Bond, Series B,
Callable 06/01/99 at 100 (FGIC)
7.450%, 12/01/09 $ 130 $ 140
Allegheny County, Pennsylvania
GO, Series C-43, Callable
09/15/04 at 100 (MBIA)
5.875%, 09/15/13 100 102
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
Bethlehem, Pennsylvania Penn
Forest Dam Project
4.400%, 03/01/00 300 301
Center City District, Pennsylvania
Business Improvement
Assessment Bond, Callable
12/01/07 at 100 (AMBAC)
5.600%, 12/01/08 60 62
Central Bucks, Pennsylvania
School District GO, Callable
02/01/01 at 100
6.600%, 02/01/03 175 188
Chester County, Pennsylvania
GO, Series B
5.625%, 11/15/16 100 101
Crawford, Pennsylvania Central
School District GO (FGIC)
7.000%, 02/15/05 100 115
Delaware County, Pennsylvania
Revenue Bond for Villanova
University (AMBAC)
5.400%, 08/01/08 200 204
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 21
Hampden Township, Pennsylvania
Sewer Authority Special
Obligation Bond, Callable
10/01/96 at 100
5.350%, 04/01/03 120 122
Hempfield, Pennsylvania School
District GO
5.300%, 10/15/14 250 245
Lower Burrell, Pennsylvania City
Municipal Sewer Authority
Revenue Bond (AMBAC)
5.125%, 02/01/16 250 237
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
- -------------------------------------------------------------------
DESCRIPTION PAR (000) VALUE (000)
- -------------------------------------------------------------------
Millcreek Township, Pennsylvania
Sewer Authority Revenue Bond,
Callable 11/01/99 at 100 (MBIA)
6.000%, 11/01/06 $ 150 $ 157
Montgomery County, Pennsylvania
GO, Callable 10/15/03 at 100
5.750%, 10/15/11 175 178
Montgomery County, Pennsylvania
Higher Education and Health
Authority Revenue Bond for
Abington Memorial Hospital,
Series A (AMBAC)
5.125%, 06/01/14 250 236
Nazareth, Pennsylvania Area School
District GO, Callable 05/15/02
at 100 (AMBAC)
5.500%, 11/15/12 200 199
North Wales, Pennsylvania Water
Authority Revenue Bond
6.750%, 11/01/10 100 113
Northampton County, Pennsylvania
Higher Education Authority
Revenue Bond for Lehigh
University, Series A (MBIA)
5.750%, 11/15/18 150 152
Pennsylvania State Convention
Center Authority Revenue Bond,
Series A (FGIC)
6.700%, 09/01/16 75 86
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
Health Services Revenue Bond
for Allegheny/Delaware Valley,
Series A (MBIA)
5.500%, 11/15/08 400 412
Pennsylvania State Higher Education
Facilities Authority Revenue Bond
Callable 12/15/02 at 100 (AMBAC)
6.000%, 12/15/09 225 236
Pennsylvania State Higher Education
Facilities Authority Revenue Bond
for Allegheny General Hospital,
Series A
6.300%, 09/01/97 200 202
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
5.700%, 01/01/11 150 153
5.850%, 09/01/13 100 102
SEE ACCOMPANYING NOTES TO FINANICAL STATEMENTS.
-64-
<PAGE>
*COREFUND FIXED INCOME FUNDS
- -------------------------------------------------------------------
DESCRIPTION PAR (000) VALUE (000)
- -------------------------------------------------------------------
Pennsylvania State Housing
Finance Agency Revenue
Bond, Series C
6.400%, 07/01/12 $300 $ 309
Pennsylvania State Industrial
Development Authority
Revenue Bond (AMBAC)
5.800%, 07/01/09 250 264
6.000%, 07/01/09 305 325
6.000%, 01/01/12 100 104
Pennsylvania State Industrial
Development Authority
Revenue Bond (A Pennsylvania
State Infrastructure Investment
Authority Revenue Bond for
Pennvest Loan Pool (MBIA)
6.000%, 09/01/04 400 433
Pennsylvania State Industrial
Development Authority
Revenue Bond Economic
Development (AMBAC)
6.000%, 07/01/08 600 646
Pennsylvania State Turnpike
Commission Revenue Bond,
Series O, Callable 12/01/02
at 102 (FGIC)
5.900%, 12/01/08 125 131
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, Callable
03/01/04 at 100
6.150%, 03/01/05 185 199
Pennsylvania State University
Revenue Bond
5.200%, 03/01/98 250 253
Philadelphia Pennsylvania, Industrial
Authority, Revenue Bond
5.250%, 11/15/09 500 499
Philadelphia, Pennsylvania
Hospitals and Higher Education
Facilities Authority Revenue
Bond for Pennsylvania Hospital,
Series A (FGIC)
5.250%, 02/15/14 250 239
Pittsburgh, Pennsylvania GO,
Series D, Callable 09/01/02
at 102 (AMBAC)
6.125%, 09/01/17 25 26
- -------------------------------------------------------------------
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 $ 120
Radnor Township, Pennsylvania
GO, Callable 05/01/06 at 100
5.250%, 11/01/16 200 193
Rose Tree/Media, Pennsylvania
School District GO (FGIC)
5.350%, 02/15/10 150 149
Scranton-Lackawana, Pennsylvania
Health and Welfare Authority
Revenue Bond Mercy Health
Project, Series B (MBIA)
5.000%, 01/01/06 250 250
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
Wayne County, Pennsylvania
Housing Authority Revenue
Bond for Section 8 Assisted
Project (MBIA)
5.350%, 10/01/07 190 188
York, Pennsylvania City School
District GO, Callable 03/01/03
at 100 (FGIC)
5.600%, 03/01/07 75 77
------
10,286
------
PUERTO RICO - 2.6%
University of Puerto Rico, Series M,
Revenue Bond, (MBIA)
5.250%, 06/01/25 300 291
------
TOTAL MUNICIPAL BONDS
(Cost $10,430) 10,637
------
CASH EQUIVALENT - 1.3%
SEI Institutional Tax Free Portfolio 139 139
------
TOTAL CASH EQUIVALENT
(Cost $139) 139
------
TOTAL INVESTMENTS - 98.8%
(Cost $10,569) 10,776
------
OTHER ASSETS AND LIABILITIES,
NET - 1.2% 133
------
SEE ACCOMPANYING NOTES TO FINANICAL STATEMENTS.
-65-
<PAGE>
STATEMENT
OF
NET ASSETS
AS OF DECEMBER 31, 1996
(UNAUDITIED)
PENNSYLVANIA MUNICIPAL BOND FUND (CONCLUDED)
- -------------------------------------------------------------------
DESCRIPTION VALUE (000)
- -------------------------------------------------------------------
NET ASSETS:
Portfolio Shares - Class Y
($0.001 par value - 100 million
authorized) based on
948,383 outstanding shares $ 9,789
Portfolio Shares - Class A
($0.001 par value - 100 million
authorized) based on
97,881 outstanding shares 1,007
Accumulated Net Realized Loss
on Investments (96)
Net Unrealized Appreciation
on Investments 207
Undistributed Net
Investment Income 2
-------
TOTAL NET ASSETS - 100.0% $10,909
=======
NET ASSET VALUE, OFFERING AND
REDEMPTION PRICE PER SHARE -
CLASS Y $10.43
=======
NET ASSET VALUE AND REDEMPTION
PRICE PER SHARE - CLASS A $10.43
=======
(A) VARIABLE RATE SECURITY - THE RATE REFLECTED ON THE STATEMENT OF NET
ASSETS IS THE RATE IN EFFECT ON DECEMBER 31, 1996.
(B) PUT OR DEMAND FEATURES EXIST REQUIRING THE ISSUER TO REPURCHASE THE
INSTRUMENT PRIOR TO MATURITY. THE MATURITY DATE SHOWN IS THE LESSOR OF THE
PUT DEMAND 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
(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
[Graphic]
Pie Chart
Data for pie chart as follows:
Cash Equivalents 1%
General Obligations 57%
Revenue Bonds 42%
% OF TOTAL PORTFOLIO INVESTMENTS
- -------------------------------------------------------------------
DESCRIPTION PAR (000) VALUE (000)
- -------------------------------------------------------------------
MUNICIPAL BONDS - 107.0%
GEORGIA - 4.2%
Hapeville, Georgia Industrial
Development Authority
Revenue Bond for Hapeville
Hotel Project (A) (B) (C)
5.000%, 11/01/15 $ 70 $ 70
-----
MICHIGAN - 5.9%
Delta County, Michigan
Environmental Improvement
Revenue Bond for Mead
Escambia Paper Project,
Series C (A) (B) (C)
5.000%, 12/01/23 100 100
-----
NEW JERSEY - 96.9%
Bayonne, New Jersey GO (FGIC)
5.900%, 05/01/08 150 157
Burlington County, New Jersey GO
5.200%, 10/01/05 80 82
Cherry Hill Township,
New Jersey GO
5.900%, 06/01/05 50 54
Evesham Twp New Jersey Board
of Education GO
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
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
-66-
<PAGE>
*COREFUND FIXED INCOME FUNDS
- -------------------------------------------------------------------
DESCRIPTION PAR (000) VALUE (000)
- -------------------------------------------------------------------
Morris County, New Jersey
5.000%, 07/15/13 $ 75 $ 71
New Jersey Health Care
Facilities Finance Authority
Revenue Bond for Bridgeton
Hospital Association, 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 51
New Jersey State Economic
Development Authority
Revenue Bond for Rutgers
State University (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 59
New Jersey State Educational
Facilities Reveune Bond,
Series A Princeton
University Project
5.500%, 07/01/04 100 106
New York & New Jersey States
Port Authority Revenue Bond,
Eighty-First Series
5.700%, 08/01/07 50 52
North Brunswick Township,
New Jersey GO,
Callable 02/01/05 at 100
6.300%, 02/01/12 150 160
North Brunswick Township,
New Jersey GO
6.125%, 05/15/04 24 26
Ocean County, New Jersey GO
5.650%, 07/01/03 75 79
Secaucus, New Jersey Sewer
Authority Revenue Bond,
Series A
6.100%, 12/01/10 60 65
- -------------------------------------------------------------------
DESCRIPTION PAR (000) VALUE (000)
- -------------------------------------------------------------------
South Brunswick Township,
New Jersey GO
5.950%, 08/01/14 $ 100 $ 103
South Monmouth, New Jersey
Sewer Authority Revenue
Bond (MBIA)
5.550%, 01/15/06 50 52
West Windsor Township,
New Jersey Parking Authority
Revenue Bond
6.100%, 12/01/12 50 53
-----
1,625
-----
TOTAL MUNICIPAL BONDS
(Cost $1,752) 1,795
-----
CASH EQUIVALENT - 1.6%
SEI Institutional Tax Free Portfolio 27 27
-----
TOTAL CASH EQUIVALENT
(Cost $27) 27
-----
TOTAL INVESTMENTS - 108.6%
(Cost $1,779) 1,822
-----
OTHER ASSETS AND LIABILITIES - (8.6%)
Payable -Investment securities purchased (164)
Other Assets 19
-----
OTHER ASSETS AND LIABILITIES, NET (145)
-----
NET ASSETS:
Portfolio Shares - Class Y
($0.001 par value - 100 million
authorized) based on 132,660
outstanding shares 1,299
Portfolio Shares - Class A
($0.001 par value - 100 million
authorized) based on 32,658
outstanding shares 335
Net Unrealized Appreciation
on Investments 43
-----
TOTAL NET ASSETS - 100.0% $1,677
=====
NET ASSET VALUE, OFFERING AND
REDEMPTION PRICE PER SHARE -
CLASS Y $10.14
=====
NET ASSET VALUE AND REDEMPTION
PRICE PER SHARE - CLASS A $10.14
=====
(A) VARIABLE RATE SECURITY - THE RATE REFLECTED ON THE STATEMENT OF NET
ASSETS IS THE RATE IN EFFECT ON DECEMBER 31, 1996.
(B) PUT OR DEMAND FEATURES EXIST REQUIRING THE ISSUER TO REPURCHASE THE
INSTRUMENT PRIOR TO MATURITY. THE MATURITY DATE SHOWN IS THE LESSOR OF THE
PUT DEMAND 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
GO - GENERAL OBLIGATION
(MBIA) - MUNICIPAL BOND INVESTORS ASSURANCE
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
-67-
<PAGE>
STATEMENT
OF
NET ASSETS
AS OF
DECEMBER 31, 1996
(UNAUDITED)
TREASURY RESERVE
[Graphic]
Pie Chart
Data for pie chart as follows:
Cash Equivalents 59%
U.S. Treasury Securities 41%
% OF TOTAL PORTFOLIO INVESTMENTS
- --------------------------------------------------------------------------
DESCRIPTION PAR (000) VALUE (000)
- --------------------------------------------------------------------------
U.S. TREASURY OBLIGATIONS - 41.5%
U.S. Treasury Bills
5.060%, 01/09/97 $5,000 $4,994
5.200%, 01/09/97 10,000 9,988
5.270%, 01/16/97 10,000 9,978
5.295%, 01/23/97 15,000 14,951
5.250%, 01/30/97 15,000 14,937
5.090%, 02/06/97 5,000 4,974
5.120%, 02/06/97 10,000 9,949
5.110%, 02/13/97 10,000 9,939
5.070%, 02/20/97 20,000 19,859
5.140%, 03/06/97 6,000 5,945
5.340%, 03/06/97 10,000 9,905
5.250%, 03/13/97 15,000 14,845
5.175%, 04/03/97 10,000 9,868
5.350%, 04/03/97 5,000 4,932
5.115%, 04/10/97 10,000 9,859
5.105%, 04/17/97 20,000 19,699
5.345%, 05/01/97 5,000 4,911
5.075%, 05/08/97 20,000 19,642
5.085%, 05/22/97 20,000 19,602
5.433%, 05/29/97 4,000 3,911
5.080%, 06/19/97 20,000 19,523
5.620%, 06/26/97 5,000 4,863
5.590%, 07/24/97 7,000 6,778
5.358%, 08/21/97 10,000 9,655
5.585%, 08/21/97 10,000 9,640
5.235%, 11/13/97 10,000 9,540
U.S. Treasury Notes
5.625%, 06/30/97 10,000 10,004
5.500%, 07/31/97 8,500 8,494
5.250%, 12/31/97 12,000 11,971
U.S. Treasury STRIPS
5.430%, 02/15/97 10,000 9,932
5.320%, 05/15/97 15,000 14,702
5.250%, 08/15/97 20,000 19,351
------
TOTAL U.S. TREASURY OBLIGATIONS
(Cost $357,141) 357,141
------
- --------------------------------------------------------------------------
DESCRIPTION PAR (000) VALUE (000)
- --------------------------------------------------------------------------
Repurchase Agreements - 58.9%
Aubrey Lanston
5.750%, dated 12/31/96,
matures 01/02/97, repurchase
price $27,136,666 (collateralized
by U.S. Treasury Note, par value
$27,810,000, 5.875%, 11/30/01;
market value $27,575,857) $ 27,128 $27,128
Aubrey Lanston
6.600%, dated 12/31/96,
matures 01/02/97, repurchase
price $15,005,500 (collateralized
by U.S. Treasury Note, par value
$14,855,000, 6.500%, 08/15/97;
market value $15,662,741) 15,000 15,000
Goldman Sachs
6.520%, dated 12/31/96,
matures 01/02/97, repurchase
price $15,005,433 (collateralized
by various U.S. Treasury Notes
ranging in par value $1,330,000-
$13,975,000, 5.000%-6.875%,
02/15/99-03/31/00; total
market value $15,553,372) 15,000 15,000
Hong Kong Shanghai Bank
6.625%, dated 12/31/96,
matures 01/02/97, repurchase
price $15,005,521 (collateralized
by U.S. Treasury Note, par value
$14,930,000, 5.875%, 07/31/97;
market value $15,691,817) 15,000 15,000
Merrill Lynch
6.000%, dated 12/31/96,
matures 01/02/97, repurchase
price $15,005,000 (collateralized
by various U.S. Treasury Notes
ranging in par value $6,640,000-
$7,835,000, 5.875%-8.875%,
07/31/97-02/15/99; total
market value $15,682,752) 15,000 15,000
Morgan Stanley
6.250%, dated 12/31/96,
matures 01/02/97, repurchase
price $20,006,944 (collateralized
by U.S. Treasury Note, par value
$19,485,000, 7.750%, 12/31/99;
market value $20,246,864) 20,000 20,000
Sanwa Bank
6.750%, dated 12/31/96,
matures 01/02/97, repurchase
price $200,075,000 (collateralized
by various U.S. Treasury Notes
ranging in par value $1,330,000-
$50,000,000, 5.000%-8.250%,
06/30/97-05/31/01; total
market value $216,248,081) 200,000 200,000
SEE ACCOMPANYING NOTES TO FINANICAL STATEMENTS.
-68-
<PAGE>
*CORERFUND MONEY MARKET FUNDS
- --------------------------------------------------------------------------
DESCRIPTION PAR (000) VALUE (000)
- --------------------------------------------------------------------------
Swiss Bank
6.750%, dated 12/31/96,
matures 01/02/97, repurchase
price $200,075,000 (collateralized
by various U.S. Treasury Notes
ranging in par value $2,165,000-
$50,000,000, 5.750%-8.875%,
07/31/97-09/30/97; total
market value $219,843,315 $200,000 $200,000
--------
TOTAL REPURCHASE AGREEMENTS
(Cost $507,128) 507,128
--------
TOTAL INVESTMENTS - 100.4%
(Cost $864,269) 864,269
--------
OTHER ASSETS AND LIABILITIES,
NET - (0.4%) (3,145)
--------
NET ASSETS:
Portfolio Shares - Class Y
($0.001 par value - 1,250
million authorized) based
on 847,092,728 outstanding shares 847,093
Portfolio Shares - Class C
($0.001 par value - 1,250
million authorized) based on
14,010,652 outstanding shares 14,011
Accumulated Net Realized
Gain on Investments 20
--------
TOTAL NET ASSETS - 100.0% $861,124
========
NET ASSET VALUE AND
REDEMPTION PRICE PER SHARE -
CLASS Y & CLASS C $1.00
========
+ YIELD TO MATURITY
STRIPS - SEPARATELY TRADED REGISTERED INTEREST AND PRINCIPAL SECURITIES
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
CASH RESERVE
[Graphic]
Pie Chart
Data for pie chart as follows:
Cash Equivalents 2%
U.S.Government Securities 12%
Corporate Securities 86%
% OF TOTAL PORTFOLIO INVESTMENTS
- ----------------------------------------------------------------------
DESCRIPTION PAR (000) VALUE (000)
- ----------------------------------------------------------------------
COMMERCIAL PAPER - 74.1%
Abbey National Bank
5.371%, 03/03/97 $10,000 $ 9,910
American Express
5.454%, 06/24/97 7,500 7,309
Ameritech Capital Funding
5.614%, 01/08/97 10,000 9,989
5.498%, 01/23/97 10,000 9,967
5.450%, 02/18/97 10,000 9,928
Asset Securitization
5.371%, 01/29/97 15,000 14,938
5.380%, 02/19/97 5,000 4,964
5.457%, 02/24/97 7,500 7,439
5.438%, 03/11/97 7,500 7,423
Banc One Funding
5.519%, 01/07/97 10,750 10,740
5.553%, 02/06/97 10,000 9,945
5.514%, 02/20/97 10,000 9,924
5.417%, 05/12/97 10,000 9,807
Bayerische Landesbank
5.465%, 03/24/97 10,000 9,877
Bell Atlantic Network Funding
5.505%, 01/30/97 10,000 9,956
Cafco
5.345%, 01/15/97 5,000 4,990
Caisse de Depots En
Consignations
5.456%, 01/06/97 10,000 9,992
5.350%, 01/24/97 10,000 9,966
5.365%, 02/12/97 10,000 9,938
Campbell Soup
5.617%, 07/15/97 11,900 11,553
Commonwealth Bank
of Australia
5.397%, 01/16/97 15,000 14,967
5.470%, 02/18/97 10,000 9,928
-69-
<PAGE>
STATEMENT
OF
NET ASSETS
AS OF DECEMBER 31, 1996
(UNAUDITIED)
CASH RESERVE (CONCLUDED)
- --------------------------------------------------------------------
DESCRIPTION PAR (000) VALUE (000)
- --------------------------------------------------------------------
Credit Suisse
5.545%, 03/18/97 $ 2,000 $ 1,977
Ford Motor Credit
5.508%, 01/09/97 10,000 9,988
5.436%, 01/30/97 10,000 9,957
5.537%, 01/31/97 10,000 9,955
5.560%, 03/26/97 10,000 9,874
General Electric Capital
5.675%, 01/15/97 10,000 9,978
5.546%, 08/26/97 10,000 9,648
Goldman Sachs
5.477%, 01/08/97 5,000 4,995
5.392%, 03/18/97 10,000 9,888
5.402%, 04/16/97 10,000 9,845
Merrill Lynch
5.390%, 01/22/97 5,000 4,984
5.402%, 01/28/97 10,000 9,960
5.393%, 02/12/97 10,000 9,938
5.370%, 02/18/97 10,000 9,929
Met Life Funding
5.344%, 02/25/97 10,000 9,919
5.437%, 03/12/97 9,501 9,402
5.409%, 03/25/97 12,666 12,510
Mitsubishi International
5.366%, 02/04/97 15,000 14,925
5.385%, 02/04/97 10,018 9,968
5.392%, 03/03/97 10,000 9,910
Morgan Stanley
5.428%, 01/07/97 10,000 9,991
5.435%, 01/14/97 5,000 4,990
5.420%, 02/10/97 10,000 9,940
5.411%, 03/11/97 10,000 9,898
National Australia Bank Funding
5.435%, 01/03/97 10,000 9,997
5.377%, 02/03/97 10,000 9,951
New Center Asset Trust
5.426%, 02/07/97 20,000 19,890
Paccar Financial
5.625%, 01/16/97 10,400 10,376
Pitney Bowes Credit
5.670%, 01/10/97 10,000 9,986
5.477%, 04/07/97 10,000 9,858
Province of Alberta
5.332%, 01/14/97 24,882 24,835
Schering-Plough
5.381%, 05/20/97 9,000 8,818
Southwestern Bell
5.357%, 01/31/97 10,000 9,956
Swedish Export Credit
5.402%, 01/13/97 10,000 9,982
5.571%, 04/01/97 10,000 9,865
Walt Disney
5.210%, 02/03/97 10,000 9,952
5.385%, 02/05/97 10,000 9,949
Weyerhauser
5.325%, 01/23/97 10,000 9,968
-------
TOTAL COMMERCIAL PAPER
(Cost $599,202) 599,202
-------
- --------------------------------------------------------------------------
DESCRIPTION PAR (000) VALUE (000)
- --------------------------------------------------------------------------
U.S. GOVERNMENT AGENCY OBLIGATIONS - 11.8%
FHLB
5.307%, 01/27/97 $14,000 $13,947
6.000%, 09/24/97 6,500 6,524
5.810%, 11/04/97 10,000 10,000
5.800%, 11/07/97 5,000 5,000
Federal Home Loan Mortgage
Discount Note
5.340%, 02/24/97 22,123 21,945
FNMA
4.780%, 02/14/97 10,000 9,998
5.306%, 01/13/97 10,000 9,982
5.410%, 12/10/97 18,350 18,343
------
TOTAL U.S. GOVERNMENT AGENCY OBLIGATIONS
(Cost $95,739) 95,739
------
CORPORATE OBLIGATIONS - 9.2%
American Express
Centurion Bank (A)
5.568%, 06/10/97 12,000 12,000
Associates of North America
6.625%, 11/15/97 10,000 10,066
Capital Equipment Receivable Trust
5.600%, 10/15/97 8,495 8,495
E.I. DuPont de Nemours
8.650%, 12/01/97 5,000 5,134
General Electric Capital (A)
5.170%, 01/21/97 14,500 14,500
Procter and Gamble
6.850%, 06/01/97 2,000 2,011
Province of Ontario
5.700%, 10/01/97 10,000 10,011
Toyota Motor Credit (A)
4.930%, 09/26/97 10,000 10,000
Wachovia Bank of
North Carolina
6.600%, 05/12/97 2,000 2,008
------
TOTAL CORPORATE OBLIGATIONS
(Cost $74,225) 74,225
------
MASTER NOTES - 0.0%
SLMA (A)
5.345%, 309 309
------
TOTAL MASTER NOTES
(Cost $309) 309
------
CERTIFICATES OF DEPOSIT - 3.1%
Banque Nationale de Paris
5.370%, 02/11/97 15,000 15,000
5.380%, 03/05/97 10,000 10,000
------
TOTAL CERTIFICATES OF DEPOSIT
(Cost $25,000) 25,000
------
SEE ACCOMPANYING NOTES TO FINANICAL STATEMENTS.
-70-
<PAGE>
* COREFUND MONEY MARKET FUNDS
- --------------------------------------------------------------------------
DESCRIPTION PAR (000) VALUE (000)
- --------------------------------------------------------------------------
U.S. TREASURY OBLIGATIONS - 0.3%
U.S. Treasury STRIPS
5.430%, 02/15/97 $ 2,500 $ 2,484
-------
TOTAL U.S. TREASURY OBLIGATIONS
(Cost $2,484) 2,484
-------
REPURCHASE AGREEMENT - 1.8%
Aubrey Lanston
5.750%, dated 12/31/96,
matures 01/02/97, repurchase
price $14,840,739 (collateralized
by U.S. Treasury Note, par value
$15,210,000, 5.875%, 11/30/01;
market value $15,081,941) 14,836 14,836
-------
TOTAL REPURCHASE AGREEMENT
(Cost $14,836) 14,836
-------
TOTAL INVESTMENTS - 100.3%
(Cost $811,795) 811,795
-------
OTHER ASSETS AND LIABILITIES,
NET - (0.3%) (2,717)
-------
NET ASSETS:
Portfolio Shares - Class Y
($0.001 par value - 1 billion
authorized) based on 787,696,353
outstanding shares 787,696
Portfolio Shares - Class C
($0.001 par value - 1 billion
authorized) based on 21,521,593
outstanding shares 21,522
Accumulated Net Realized
Loss on Investments (139)
Distributions in Excess of
Net Investment Income (1)
-------
TOTAL NET ASSETS - 100.0% $809,078
=======
NET ASSET VALUE AND
REDEMPTION PRICE PER SHARE -
CLASS Y & CLASS C $1.00
=======
+ YIELD TO MATURITY
(A) VARIABLE RATE SECURITIES - THE RATE REFLECTED ON THE STATEMENT OF NET
ASSETS IS THE RATE IN EFFECT ON DECEMBER 31, 1996.
FHLB - FEDERAL HOME LOAN BANK
FNMA - FEDERAL NATIONAL MORTGAGE ASSOCIATION
SLMA - STUDENT LOAN MARKETING ASSOCIATION
STRIPS - SEPARATELY TRADED REGISTERED INTEREST AND PRINCIPAL SECURITIES
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
TAX-FREE RESERVE
[Graphic]
Pie Chart
Data for pie chart as follows:
Anticipation Notes 8%
General Obligations 2%
Tax-Exempt
Commercial Paper 38%
Revenue Bonds 52%
% OF TOTAL PORTFOLIO INVESTMENTS
- ------------------------------------------------------------------------
DESCRIPTION PAR (000) VALUE (000)
- ------------------------------------------------------------------------
MUNICIPAL BONDS - 98.8%
ALABAMA - 1.9%
Montgomery, Alabama TECP
3.650%, 01/07/97 $2,000 $ 2,000
Stevenson, Alabama, Industrial
Development Authority
for Environmental
Improvement Mead Project (A)
4.950%, 01/02/97 300 300
-----
2,300
-----
ALASKA - 3.2%
Valdez, Alaska TECP
3.500%, 02/25/97 1,250 1,250
3.450%, 03/28/97 2,600 2,600
-----
3,850
-----
ARIZONA - 0.6%
Flagstaff, Arizona TECP
3.650%, 02/19/97 750 750
-----
CALIFORNIA - 0.3%
Santa Clara, California Electric
Revenue Bond, Series A
(A) (B) (C)
3.950%, 01/07/97 340 340
-----
DELAWARE - 0.1%
Wilmington, Delaware Hospital
Revenue Bond for Franciscan
Health Systems Project,
Series B (A) (B) (C)
4.950%, 01/02/97 100 100
-----
-71-
<PAGE>
STATEMENT
OF
NET ASSETS
AS OF DECEMBER 31, 1996
(UNAUDITIED)
TAX-FREE RESERVE (CONTINUED)
- ----------------------------------------------------------------------
DESCRIPTION PAR (000) VALUE (000)
- ----------------------------------------------------------------------
FLORIDA - 4.3%
Dade County, Florida Capital
Asset Revenue Bond,
Series 1990 (A) (B) (C)
4.450%, 01/07/97 $1,000 $1,000
Sunshine State, Florida TECP
3.600%, 02/25/97 1,500 1,500
3.500%, 04/04/97 2,800 2,800
-----
5,300
-----
GEORGIA - 2.7%
Burke County, Georgia TECP
3.550%, 01/06/97 2,000 2,000
Hapeville, Georgia Industrial
Development Authority
Revenue Bond for Hapeville
Hotel Project (A) (B) (C)
5.000%, 01/02/97 1,300 1,300
-----
3,300
-----
HAWAII - 1.2%
Honolulu County, Hawaii TECP
3.450%, 02/10/97 1,500 1,500
-----
ILLINOIS - 6.7%
Chicago, Illinois O'Hare
International Airport Revenue
Bond for Industrial Lien,
Series C (A) (B) (C)
4.150%, 01/07/97 1,500 1,500
Illinois State Development
Finance Authority
Revenue Bond
4.000%, 01/07/97 1,800 1,800
Illinois State Development
Finance Authority Revenue
Bond for Illinois Power
Company Project,
Series B (A) (B) (C)
4.150%, 01/07/97 1,400 1,400
Illinois State Toll Highway
Authority Revenue Bond,
Series B (A) (B) (C)
4.000%, 01/07/97 1,000 1,000
Lisle, Illinois Housing Authority
Revenue Bond for Ashley of
Lisle Project (A) (B) (C)
4.000%, 01/07/97 1,200 1,200
St. Charles, Illinois Industrial
Development Authority
Revenue Bond for Pier One
Imports Project (A) (B) (C)
4.150%, 01/07/97 1,300 1,300
-----
8,200
-----
Indiana - 7.0%
Chesapeake, Indiana TECP
3.600%, 04/04/97 1,000 1,000
- ----------------------------------------------------------------------
DESCRIPTION PAR (000) VALUE (000)
- ----------------------------------------------------------------------
Gary, Indiana Industrial
Development Authority
Revenue Bond for U.S. Steel
Project (A) (B) (C)
3.700%, 01/15/97 $1,600 $1,600
Mt. Vernon, Indiana TECP
3.600%, 01/29/97 3,900 3,900
Sullivan, Indiana TECP
3.600%, 02/18/97 810 810
3.500%, 04/08/97 1,235 1,235
-----
8,545
-----
IOWA - 0.3%
Des Moines, Iowa Commercial
Development Revenue Bond
for Capital Center III Project
(A) (B) (C)
4.100%, 01/07/97 400 400
-----
KANSAS - 4.1%
Burlington, Kansas TECP
3.750%, 01/03/97 2,000 2,000
3.600%, 02/12/97 1,450 1,450
3.650%, 02/12/97 1,500 1,500
Wichita, Kansas Health Facilities
Revenue Bond for Wichita
Health Systems Project,
Series XXV (A) (B) (C)
4.300%, 01/07/97 100 100
-----
5,050
-----
KENTUCKY - 3.4%
Jefferson County, Kentucky
TECP
3.500%, 02/20/97 2,200 2,200
Mayfield, Kentucky Multi-City
Lease Revenue Bond for
Kentucky League of Cities
Funding Project (A) (B) (C)
4.300%, 01/07/97 2,000 2,000
-----
4,200
-----
LOUISIANA - 6.7%
De Soto Parish, Louisiana
Pollution Control Revenue
Bond for Central Louisiana
Electric Company Project
(A) (B) (C)
4.050%, 01/07/97 700 700
Jefferson Parish, Louisiana
Industrial Development
Authority Revenue Bond
for George J. Ackel, Sr.
Project (A) (B) (C)
4.150%, 01/07/97 3,800 3,800
Lake Charles, Louisiana
District Port Facility
Revenue Bond for
Conoco Project,
Series 84 (A) (B)
4.950%, 01/02/97 600 600
SEE ACCOMPANYING NOTES TO FINANICAL STATEMENTS.
-72-
<PAGE>
* COREFUND MONEY MARKET FUNDS
- --------------------------------------------------------------------------
DESCRIPTION PAR (000) VALUE (000)
- --------------------------------------------------------------------------
Louisiana State Public
Facilities Authority
Revenue Bond for Kenner
Hotel Project (A) (B) (C)
5.000%, 01/02/97 $1,100 $1,100
South Louisiana Port Common
Marine Terminal Facilities
Revenue Bond for Occidental
Petroleum Project (A) (B) (C)
4.150%, 01/07/97 2,000 2,000
-----
8,200
-----
MICHIGAN - 1.0%
Delta County, Michigan
Environmental Improvement
Revenue Bond for Mead
Escambia Paper Project,
Series C (A) (B) (C)
5.000%, 01/02/97 700 700
Michigan State Industrial
Development Authority
Revenue Bond for
Consumer Power
Project (A) (B) (C)
4.950%, 01/02/97 500 500
-----
1,200
-----
MINNESOTA - 1.2%
Rochester, Minnesota TECP
3.450%, 02/12/97 1,500 1,500
-----
MISSISSIPPI - 1.6%
Claiborne County,
Mississippi TECP
3.600%, 01/14/97 1,000 1,000
3.600%, 03/10/97 1,000 1,000
-----
2,000
-----
MISSOURI - 4.8%
Missouri State Health and
Educational Facilities
Authority Revenue Bond
for Washington University,
Series A (A)
4.950%, 01/02/97 1,700 1,700
Missouri State TECP
3.550%, 01/08/97 1,200 1,200
University of Missouri Capital
Project Note, Series FY
4.750%, 06/30/97 3,000 3,012
-----
5,912
-----
MONTANA - 0.3%
Forsyth, Montana Pollution
Control Revenue Bond for
Portland General Electric
Project (A) (B) (C)
4.150%, 01/07/97 200 200
- --------------------------------------------------------------------------
DESCRIPTION PAR (000) VALUE (000)
- --------------------------------------------------------------------------
Forsyth, Montana Pollution
Control Revenue Bond for
Portland General Electric
Project, Series B (A) (B) (C)
4.150%, 01/07/97 $100 $100
-----
300
-----
NEVADA - 1.2%
Nevada State Housing Facilities
Revenue Bond for Multi-Unit
Park Project,
Series A (A) (B) (C)
4.300%, 01/07/97 1,500 1,500
-----
NEW MEXICO - 0.8%
Albuquerque, New Mexico Gross
Receipts Revenue Bond
(A) (B) (C)
4.100%, 01/07/97 1,000 1,000
-----
NEW YORK - 2.5%
New York City, New York TECP
3.550%, 02/12/97 3,000 3,000
-----
NORTH CAROLINA - 1.9%
North Carolina TECP
3.350%, 03/13/97 1,500 1,500
Wake County, North Carolina
Industrial Development
Authority Revenue Bond
for Carolina Power & Light
Company Project,
Series A (A) (B) (C)
4.150%, 01/07/97 800 800
-----
2,300
-----
OHIO - 0.6%
Ohio State Air Quality Revenue
Bond, Series B (A) (B)
4.700%, 01/02/97 700 700
-----
OREGON - 1.1%
Port of Portland, Oregon Pollution
Control Revenue Bond for
Reynold Metals Project
(A) (B) (C)
4.950%, 01/02/97 800 800
Port of St. Helens, Oregon
Pollution Control Revenue
Bond (A) (B) (C)
4.950%, 01/02/97 500 500
-----
1,300
-----
PENNSYLVANIA - 14.1%
Allegheny County, Pennsylvania
Hospital Development Revenue
Bond for Presbyterian University
Hospital Project, Series B1
(A) (B) (C)
3.900%, 01/02/97 400 400
SEE ACCOMPANYING NOTES TO FINANICAL STATEMENTS.
-73-
<PAGE>
STATEMENT
OF
NET ASSETS
AS OF DECEMBER 31, 1996
(UNAUDITIED)
TAX-FREE RESERVE (CONCLUDED)
- ----------------------------------------------------------------------
DESCRIPTION PAR (000) VALUE (000)
- ----------------------------------------------------------------------
Allegheny County, Pennsylvania
Hospital Development Revenue
Bond for Presbyterian
University Hospital Project,
Series B2 (A) (B) (C)
3.900%, 01/02/97 $ 830 $ 830
Allegheny County, Pennsylvania,
Series C-33, GO
7.300%, 02/15/97 1,000 1,004
Beaver County, Pennsylvania
Industrial Development
Authority Revenue Bond for
Duquesne Light Company
Project, Series B (A) (B) (C)
4.100%, 01/07/97 100 100
Langhorne, Pennsylvania Hospital
Authority Revenue Bond for
St. Mary's Hospital,
Series A (A) (B) (C)
4.850%, 01/02/97 200 200
Langhorne, Pennsylvania Hospital
Authority Revenue Bond for
St. Mary's Hospital,
Series C (A) (B) (C)
4.850%, 01/02/97 600 600
Lehigh County, Pennsylvania
Industrial Development
Authority Revenue Bond
for Allegheny Electric
Corporation Project (A) (B) (C)
3.650%, 01/02/97 300 300
Montgomery County,
Pennsylvania TECP
3.500%, 01/16/97 600 600
3.550%, 01/16/97 2,400 2,400
3.500%, 03/07/97 2,000 2,000
Pennsylvania State Higher
Education Facilities
Authority Revenue Bond
for Carnegie Mellon
University Project,
Series B (A) (B)
5.000%, 01/02/97 1,700 1,700
Pittsburgh, Pennsylvania
Water and Sewer Authority
Revenue Bond, Series A (FGIC)
3.750%, 09/01/97 1,500 1,497
Washington County, Pennsylvania
Lease Revenue Bond (A) (B) (C)
4.150%, 01/07/97 2,440 2,440
Wissahickon, Pennsylvania
School District GO
4.500%, 11/15/97 1,125 1,132
York, Pennsylvania General
Authority Pooled Revenue
Bond (A) (B) (C)
4.150%, 01/02/97 2,000 2,000
-----
17,203
-----
- ----------------------------------------------------------------------
DESCRIPTION PAR (000) VALUE (000)
- ---------------------------------------------------------------------
PUERTO RICO - 1.6%
Puerto Rico Commonwealth
TRAN, Series A
4.000%, 07/30/97 $2,000 $2,007
-----
SOUTH CAROLINA - 1.3%
Berkley County, South Carolina
Pollution Control Revenue
Bond for Amoco Chemical
Project (A) (B) (C)
4.900%, 01/02/97 700 700
Richland County, South Carolina
Hospital Facilities Revenue
Bond for Sunhealth-Orangeburg
Project, Series C2 (A) (B) (C)
4.450%, 01/07/97 450 450
York County, South Carolina
Pollution Control Revenue
Bond, Series NRU-84N-2
(A) (B) (C)
4.150%, 01/07/97 400 400
-----
1,550
-----
TENNESSEE - 1.2%
Sullivan County, Tennessee
Industrial Development
Authority Pollution Control
Revenue Bond for Mead
Project (A) (B) (C)
4.950%, 01/02/97 1,400 1,400
-----
TEXAS - 12.7%
Camp County, Texas Industrial
Development Authority
Revenue Bond for Texas
Oil & Gas Project (A) (B) (C)
4.300%, 01/07/97 500 500
Grapevine, Texas Industrial
Development Authority
Revenue Bond for American
Airlines Project,
Series A2 (A) (B) (C)
4.950%, 01/02/97 300 300
Grapevine, Texas Industrial
Development Authority
Revenue Bond for American
Airlines Project,
Series A4 (A) (B) (C)
4.950%, 01/02/97 600 600
Grapevine, Texas Industrial
Development Authority
Revenue Bond for American
Airlines Project,
Series B2 (A) (B) (C)
4.950%, 01/02/97 500 500
Grapevine, Texas Industrial
Development Authority
Revenue Bond for American
Airlines Project,
Series B4 (A) (B) (C)
4.950%, 01/02/97 700 700
SEE ACCOMPANYING NOTES TO FINANICAL STATEMENTS.
-74-
<PAGE>
COREFUND MONEY MARKET FUNDS
- ----------------------------------------------------------------------
DESCRIPTION PAR (000) VALUE (000)
- ----------------------------------------------------------------------
Harris County, Texas Industrial
Development Authority
Pollution Control Revenue
Bond (A) (B)
5.000%, 01/02/97 $ 200 $ 200
Houston, Texas TRAN
4.500%, 06/30/97 2,000 2,006
Hunt County, Texas Industrial
Development Authority
Revenue Bond for Trico
Industries Incorporated
Project (A) (B) (C)
4.000%, 01/07/97 1,600 1,600
Nueces County, Texas Health
Facilities Authority Revenue
Bond for Driscoll Children's
Foundation Project (A) (B) (C)
4.150%, 01/07/97 1,675 1,675
Texas State Higher Education
Authority Revenue Bond,
Series B (A) (B) (C)
4.100%, 01/07/97 1,450 1,450
Texas State Southwest Higher
Education Authority Revenue
Bond for Southern Methodist
University (A) (B) (C)
4.950%, 01/02/97 1,000 1,000
Texas State TRAN
4.750%, 08/29/97 5,000 5,025
-----
15,556
-----
VERMONT - 1.1%
Vermont State Student Loan
Revenue Bond for Student
Loan Assistance Corporation
Project (A) (B) (C)
3.650%, 01/02/97 1,335 1,335
-----
VIRGINIA - 2.5%
Virginia State Peninsula Port
Authority Revenue Bond for
Dominion Terminal Project,
Series D (A)
4.950%, 01/02/97 1,500 1,500
Virginia State Peninsula Port
Authority TECP
3.550%, 01/02/97 1,500 1,500
-----
3,000
-----
WEST VIRGINIA - 0.3%
West Virginia State Hospital
Finance Authority Revenue
Bond for St. Mary's Hospital
Project (A) (B) (C)
4.150%, 01/07/97 400 400
-----
- ----------------------------------------------------------------------
DESCRIPTION PAR (000) VALUE (000)
- ----------------------------------------------------------------------
WISCONSIN - 0.5%
Lac Du Flambeau, Wisconsin
Lake Superior Chippewa
Indians Special Obligation for
Simpson Electric Project
(A) (B) (C)
4.150%, 01/02/97 $ 600 $ 600
-------
WYOMING - 4.0%
Converse, Wyoming TECP
3.500%, 03/06/97 1,000 1,000
Gillette County, Wyoming TECP
3.450%, 03/14/97 1,200 1,200
Lincoln County, Wyoming
Pollution Control Revenue
Bond, Series 1984 B (A)
5.000%, 01/02/97 900 900
Lincoln County, Wyoming
Resource Recovery Revenue
Bond for Exxon Project,
Series C (A) (B) (C)
5.000%, 01/02/97 1,300 1,300
Platte County, Wyoming
Pollution Control Revenue
Bond, Series B (A) (B) (C)
5.050%, 01/02/97 500 500
-------
4,900
-------
TOTAL MUNICIPAL BONDS
(Cost $120,698) 120,698
-------
TOTAL INVESTMENTS - 98.8%
(Cost $120,698) 120,698
-------
OTHER ASSETS AND LIABILITIES,
NET - 1.2% 1,411
-------
SEE ACCOMPANYING NOTES TO FINANICAL STATEMENTS.
-75-
<PAGE>
STATEMENT
OF
NET ASSETS
AS OF DECEMBER 31, 1996
(UNAUDITIED)
TAX-FREE RESERVE (CONCLUDED)
- -----------------------------------------------------------------------
DESCRIPTION VALUE (000)
- -----------------------------------------------------------------------
NET ASSETS:
Portfolio Shares - Class Y
($0.001 par value - 250
million authorized) based
on 119,266,706 outstanding shares $119,267
Portfolio Shares - Class C
($0.001 par value - 250
million authorized) based
on 2,895,839 outstanding shares 2,896
Accumulated Net Realized
Loss on Investments (53)
Distributions in Excess of
Net Investment Income (1)
--------
TOTAL NET ASSETS - 100.0% $122,109
========
NET ASSET VALUE AND REDEMPTION
PRICE PER SHARE -
CLASS Y & CLASS C $1.00
========
(A) VARIABLE RATE SECURITY - THE RATE REFLECTED ON THE STATEMENT OF NET
ASSETS IS THE RATE IN EFFECT ON DECEMBER 31, 1996.
(B) PUT OR DEMAND FEATURES EXIST REQUIRING THE ISSUER TO REPURCHASE THE
INSTRUMENT PRIOR TO MATURITY. THE MATURITY DATE SHOWN IS THE LESSOR OF THE
PUT DEMAND DATE OR MATURITY DATE.
(C) SECURITIES ARE HELD IN CONNECTION WITH A LETTER OF CREDIT
ISSUED BY A MAJOR COMMERCIAL BANK OR FINANCIAL INSTITUTION.
(FGIC) - FINANCIAL GUARANTY INSURANCE COMPANY
GO - GENERAL OBLIGATION
TECP - TAX EXEMPT COMMERICAL PAPER
TRAN - TAX AND REVENUE ANTICIPATION NOTE
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
-76-
<PAGE>
[THIS PAGE INTENTIONALLY LEFT BLANK.]
<PAGE>
<PAGE>
STATEMENT
OF
OPERATIONS
(000)
AS OF
DECEMBER 31, 1996
(UNAUDITED)
COREFUND EQUITY FUNDS
<TABLE>
<CAPTION>
---------- ----------- ----------- ----------- ------------- --------
EQUITY CORE EQUITY GROWTH SPECIAL INTERNATIONAL BALANCED
INDEX FUND FUND(3) EQUITY FUND EQUITY FUND GROWTH FUND FUND
---------- ----------- ----------- ----------- ------------- --------
<S> <C> <C> <C> <C> <C> <C>
INVESTMENT INCOME
Dividends $1,953 $3,673 $724 $283 $994 $578
Interest 15 408 158 87 114 1,476
Less: Foreign
taxes withheld -- -- -- -- (79) --
------- ------- ------ ------ ------ ------
Total investment
income 1,968 4,081 882 370 1,029 2,054
------- ------- ------ ------ ------ ------
EXPENSES:
Investment
advisory fees 364 1,648 494 497 548 395
Waiver of investment
advisory fees (255) -- (20) (388) (6) (79)
Administrative fees 228 557 165 83 171 141
Waiver of
administrative fees (76) (200) (56) (28) (61) (49)
Transfer agent fees
& expenses 21 34 15 (2) 22 9
Custodian fees -- -- -- 13 73 --
Professional fees 10 25 7 7 5 4
Registration &
filing fees 3 15 5 (2) (2) 2
12b-1 fees -- 15 4 2 3 4
Taxes--other than income 21 4 11 -- -- 2
Printing fees 8 17 5 2 15 4
Organizational costs -- -- -- 4 -- --
Miscellaneous 19 18 4 3 (3) 4
------- ------- ------ ------ ------ ------
Total expenses 343 2,133 634 191 765 437
------- ------- ------ ------ ------ ------
NET INVESTMENT
INCOME 1,625 1,948 248 179 264 1,617
NET REALIZED AND
UNREALIZED GAIN
(LOSS) ON INVESTMENTS:
Net realized gain
(loss) from security
transactions 693 32,360 8,427 5,083 (30) 2,729
Net realized gain
on forward foreign
currency contracts and
foreign currency
transactions -- -- -- -- 1,270 --
Net unrealized
depreciation on
forward foreign
currency contracts
and translation of
assets and liabilities
in foreign currencies -- -- -- -- (562) --
Net change in unrealized
appreciation
(depreciation)
on investments 18,608 24,568 (1,114) (794) 3,325 1,383
------- ------- ------ ------ ------ ------
NET INCREASE IN
NET ASSETS
RESULTING FROM
OPERATIONS $20,926 $58,876 $7,561 $4,468 $4,267 $5,729
======= ======= ====== ====== ====== ======
COMPUTATION OF
NET ASSET VALUE
AND OFFERING PRICE
DECEMBER 31, 1996:
CLASS Y
1 Net asset value,
offer and
redemption price $ 31.29 $18.09 $13.44 $10.20 $13.16 $12.36
======= ======= ====== ====== ====== ======
CLASS A
1 Net asset
value, redemption
price 31.28 18.11 13.42 10.19 13.16 12.37
Maximum sales
charge of 5.50% 1.82 1.05 0.78 0.59 0.77 0.72
------- ------- ------ ------ ------ ------
2 Offering price $33.10 $19.16 $14.20 $10.78 $13.93 $13.09
======= ======= ====== ====== ====== ======
</TABLE>
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.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
78 & 79
<PAGE>
STATEMENT
OF
OPERATIONS
(000)
AS OF
DECEMBER 31, 1996
(UNAUDITED)
COREFUND FIXED INCOME FUNDS
<TABLE>
<CAPTION>
---------- ------------ ----------- ----
SHORT TERM SHORT-
INCOME INTERMEDIATE GOVERNMENT BOND
FUND BOND FUND INCOME FUND FUND
---------- ------------ ----------- ----
<S> <C> <C> <C> <C>
INVESTMENT INCOME
Interest $879 $5,440 $679 $6,890
------ ------ ------ ------
Total Investment income 879 5,440 679 6,890
------ ------ ------ ------
EXPENSES
Investment advisory fees 111 417 48 746
Waiver of investment
advisory fees (74) (209) (12) (393)
Administrative fees 38 209 24 252
Waiver of administrative fees (13) (69) (7) (90)
Transfer agent fees & expenses 2 13 3 29
Custodian fees (2) - - (24)
Professional fees 4 9 2 23
Registration & filing fees - 6 - 7
12b-1 fees - 4 2 2
Taxes-other than income - 4 - -
Printing fees 1 7 1 8
Organizational costs 1 - 3 -
Miscellaneous 2 6 1 9
------ ------ ------ ------
Total expenses 70 397 65 569
------ ------ ------ ------
NET INVESTMENT INCOME 809 5,043 614 6,321
NET REALIZED AND
UNREALIZED GAIN
(LOSS) ON INVESTMENTS:
Net realized
gain (loss) from:
Security transactions (7) 253 (83) 18
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
on investments 110 1,432 367 2,908
------ ------ ------ ------
NET INCREASE IN
NET ASSETS RESULTING
FROM OPERATIONS $912 $6,728 $898 $9,247
====== ====== ====== ======
COMPUTATION OF NET
ASSET VALUE AND
OFFERING
PRICE - DECEMBER 31, 1996:
CLASS Y
1 Net asset value,
offer and redemption
price $9.97 $9.86 $9.76 $10.29
====== ====== ====== ======
CLASS A
1 Net asset value,
redemption price 9.97 9.86 9.77 10.29
Maximum sales charge of
3.25% or 4.75% 0.33 0.33 0.33 0.51
------ ------ ------ ------
2 Offering price $10.30 $10.19 $10.10 $10.80
====== ====== ====== ======
</TABLE>
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.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS
-80-
<PAGE>
STATEMENT
OF
OPERATIONS
(000)
AS OF
DECEMBER 31, 1996
(UNAUDITED)
COREFUND FIXED INCOME FUNDS
<TABLE>
<CAPTION>
------ ------------ ------------ ----------
GLOBAL INTERMEDIATE PENNSYLVANIA NEW JERSEY
BOND MUNICIPAL MUNICIPAL MUNICIPAL
FUND BOND FUND BOND FUND BOND FUND
------ ------------ ------------ ----------
<S> <C> <C> <C> <C>
INVESTMENT INCOME
Interest $ 1,091 $ 37 $ 285 $ 39
------- ------- ------- -------
Total Investment income 1,091 37 285 39
------- ------- ------- -------
EXPENSES
Investment advisory fees 104 4 27 4
Waiver of investment
advisory fees (15) (2) (27) (4)
Administrative fees 43 2 13 2
Waiver of administrative fees (16) (1) (13) (2)
Transfer agent fees & expenses 9 -- 1 1
Custodian fees 4 -- -- --
Professional fees (1) -- 1 --
Registration & filing fees 2 (4) 1 --
12b-1 fees -- 1 1 --
Taxes-other than income -- -- 1 --
Printing fees 3 -- 1 --
Organizational costs 4 3 -- 1
Miscellaneous (2) 2 -- --
------- ------- ------- -------
Total expenses 135 5 6 2
------- ------- ------- -------
NET INVESTMENT INCOME 956 32 279 37
NET REALIZED AND UNREALIZED
GAIN (LOSS) ON INVESTMENTS:
Net realized gain (loss) from:
Security transactions 422 (2) 21 --
Option transactions (931) -- -- --
Net realized gain on
forward foreign
currency contracts and
foreign currency transactions 459 -- -- --
Net unrealized appreciation on
forward foreign currency
contracts and translation
of other assets and
liabilities
in foreign currencies 102 -- -- --
Net change in
unrealized appreciation
on investments 510 26 189 20
------- ------- ------- -------
NET INCREASE IN
NET ASSETS RESULTING
FROM OPERATIONS $ 1,518 $ 56 $ 489 $ 57
======= ======= ======= =======
COMPUTATION OF NET
ASSET VALUE AND
OFFERING PRICE -
DECEMBER 31, 1996:
CLASS Y
1 Net asset value,
offer and redemption price $ 9.70 $ 10.06 $ 10.43 $ 10.14
======= ======= ======= =======
CLASS A
1 Net asset value,
redemption price 9.69 10.06 10.43 10.14
Maximum sales charge of
3.25% or 4.75% 0.48 0.34 0.52 0.51
------- ------- ------- -------
2 Offering price $ 10.17 $ 10.40 $ 10.95 $ 10.65
======= ======= ======= =======
</TABLE>
-81-
<PAGE>
STATEMENT
OF
OPERATIONS
AS OF
DECEMBER 31, 1996
(UNAUDITED)
COREFUND MONEY MARKET FUNDS
<TABLE>
<CAPTION>
-------- -------- --------
TREASURY CASH TAX-FREE
RESERVE RESERVE RESERVE
-------- -------- --------
<S> <C> <C> <C>
INVESTMENT INCOME:
Interest $ 24,610 $ 23,261 $ 2,180
-------- -------- --------
Total investment income 24,610 23,261 2,180
-------- -------- --------
EXPENSES:
Investment advisory fees 1,840 1,715 248
Waiver of investment
advisory fees (552) (515) (54)
Administrative fees 1,150 1,072 155
Waiver of administrative
fees (401) (373) (74)
Transfer agent fees & expenses 71 67 9
Custodian -- -- --
Professional fees 39 45 5
Registration & filing fees 32 26 (3)
12b-1 fees 21 27 4
Taxes--other than income 13 13 1
Printing 41 34 6
Organization costs -- -- --
Miscellaneous 68 26 10
-------- -------- --------
Total expenses 2,322 2,137 307
-------- -------- --------
NET INVESTMENT INCOME 22,288 21,124 1,873
-------- -------- --------
NET REALIZED GAIN
ON INVESTMENTS:
Net realized gain
from security
transactions 22 3 --
-------- -------- --------
NET INCREASE IN
NET ASSETS RESULTING
FROM OPERATIONS $ 22,310 $ 21,127 $ 1,873
======== ======== ========
</TABLE>
See accompanying notes to finanical statements.
-82-
<PAGE>
[THIS PAGE INTENTIONALLY LEFT BLANK.]
<PAGE>
STATEMENT
OF CHANGES
IN NET ASSETS
(000)
AS OF
DECEMBER 31, 1996
(UNAUDITED)
COREFUND EQUITY FUNDS
<TABLE>
<CAPTION>
---------------- ---------------- ---------------- ---------------- --------------- ----------------
EQUITY CORE EQUITY GROWTH SPECIAL INTERNATIONAL BALANCED
INDEX FUND(3) FUND(4) EQUITY FUND EQUITY FUND GROWTH FUND FUND
---------------- ---------------- ---------------- ---------------- --------------- ----------------
7/1/96 7/1/95 7/1/96 7/1/95(1) 7/1/96 7/1/95 7/1/96 7/1/95(1) 7/1/96 7/1/95 7/1/96 7/1/95
TO TO TO TO TO TO TO TO TO TO TO TO
12/31/96 6/30/96 12/31/96 6/30/96 12/31/96 6/30/96 12/31/96 6/30/96 12/31/96 6/30/96 12/31/96 6/30/96
-------- ------- -------- ------- -------- ------- -------- ------- -------- ------- -------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
OPERATIONS:
Net investment income $1,625 $2,673 $ 1,948 $ 3,058 $ 248 $ 695 $ 179 $ 378 $ 264 $ 1,286 $1,617 $2,183
Net realized gain
from security
transactions and
foreign currency
transactions 693 4,702 32,360 43,129 8,427 10,837 5,083 9,147 1,240 11,844 2,729 4,822
Net unrealized
appreciation
(depreciation)
on investments,
forward foreign
currency contracts
and translation
of assets and
liabilites in
foreign currencies 18,608 23,222 24,568 23,229 (1,114) 17,962 (794) 2,372 2,763 5,712 1,383 6,379
-------- ------- -------- -------- -------- -------- ------- ------- -------- -------- -------- --------
Net increase in net
assets resulting
from operations 20,926 30,597 58,876 69,416 7,561 29,494 4,468 11,897 4,267 18,842 5,729 13,384
-------- ------- -------- -------- -------- -------- ------- ------- -------- -------- -------- --------
DIVIDENDS DISTRIBUTED
FROM:
Net investment income:
Retail Class (a) -- -- -- (35) -- -- -- -- -- -- -- --
Institutional Class (a) -- -- -- (2,133) -- -- -- -- -- -- -- --
Class Y (b) (1,618) (2,677) (1,892) (1,001) (241) (691) (177) (388) (3,802) (2,440) (1,582) (2,108)
Class A (b) (4) -- (38) (21) (3) (11) (2) (6) (53) (38) (44) (69)
Net realized gains:
Retail Class (a) -- -- -- (1,150) -- -- -- -- -- -- -- --
Institutional Class (a) -- -- -- (57,348) -- -- -- -- -- -- -- --
Class Y (b) (1,484) (3,835) (35,253) -- (13,864) (2,808) (13,011) (8,564) (8,375) (548) (5,885) (840)
Class A (b) (6) -- (977) -- (403) (63) (308) (113) (130) (10) (184) (32)
-------- ------- -------- -------- -------- -------- ------- ------- -------- -------- -------- --------
Total dividends
distributed (3,112) (6,512) (38,160) (61,688) (14,511) (3,573) (13,498) (9,071) (12,360) (3,036) (7,695) (3,049)
-------- ------- -------- -------- -------- -------- ------- ------- -------- -------- -------- --------
CAPITAL TRANSACTIONS (2):
Retail Class (a):
Exchanged for Class
A Shares -- -- -- -- -- -- -- (984) -- -- -- --
Proceeds from shares
issued -- -- -- 1,033 -- -- -- 166 -- -- -- --
Reinvestment of cash
distributions -- -- -- 1,168 -- -- -- 115 -- -- -- --
Cost of shares redeemed -- -- -- (674) -- -- -- (29) -- -- -- --
-------- ------- -------- -------- -------- -------- ------- ------- -------- -------- -------- --------
Increase (decrease)
in net assets
from Retail Class
transactions -- -- -- 1,527 -- -- -- (732) -- -- -- --
-------- ------- -------- -------- -------- -------- ------- ------- -------- -------- -------- --------
Institutional
Class (a):
Exchanged for
Class Y Shares -- -- -- -- -- -- -- (58,929) -- -- -- --
Proceeds from shares
issued -- -- -- 35,302 -- -- -- 6,660 -- -- -- --
Reinvestment of cash
distributions -- -- -- 58,151 -- -- -- 8,821 -- -- -- --
Cost of shares redeemed -- -- -- (92,405) -- -- -- (12,704) -- -- -- --
-------- ------- -------- -------- -------- -------- ------- ------- -------- -------- -------- --------
Increase (decrease)
in net assets from
Institutional Class
transactions -- -- -- 1,048 -- -- -- (56,152) -- -- -- --
-------- ------- -------- -------- -------- -------- ------- ------- -------- -------- -------- --------
Class Y (b):
Proceeds from
shares issued in
merger (c) -- -- -- 34,310 -- -- -- 58,929 -- 16,130 -- 38,306
Proceeds from
shares issued 19,369 50,936 29,521 16,834 21,382 24,852 6,813 2,827 7,053 17,623 13,427 17,797
Reinvestment of
cash distributions 3,511 6,064 37,189 -- 12,621 3,081 13,201 -- 11,015 2,732 7,448 2,494
Cost of shares
redeemed (10,714) (27,288) (43,651) (23,221) (15,889) (24,528) (9,710) (2,083) (12,841) (23,593) (11,756) (27,174)
-------- ------- -------- -------- -------- -------- ------- ------- -------- -------- -------- --------
Increase in net
assets from Class
Y transactions 12,166 29,712 23,059 27,923 18,114 3,405 10,304 59,673 5,227 12,892 9,119 31,423
-------- ------- -------- -------- -------- -------- ------- ------- -------- -------- -------- --------
Class A (b):
Proceeds from shares
issued in merger (c) -- -- -- 2,807 -- -- -- 984 -- 59 -- 95
Proceeds from shares
issued 922 -- 1,106 575 727 980 475 98 214 421 585 678
Reinvestment of cash
distributions 10 -- 1,026 -- 409 71 310 -- 178 46 246 96
Cost of shares redeemed (1) -- (812) (549) (193) (530) (64) (3) (268) (592) (416) (360)
-------- ------- -------- -------- -------- -------- ------- ------- -------- -------- -------- --------
Increase (decrease)
in net assets from
Class A transactions 931 -- 1,320 2,833 943 521 721 1,079 124 (66) 415 509
-------- ------- -------- -------- -------- -------- ------- ------- -------- -------- -------- --------
Increase in net
assets derived from
capital share
transactions 13,097 29,712 24,379 33,331 19,057 3,926 11,025 3,868 5,351 12,826 9,534 31,932
-------- ------- -------- -------- -------- -------- ------- ------- -------- -------- -------- --------
Net increase
(decrease)
in net assets 30,911 53,797 45,095 41,059 12,107 29,847 1,995 6,694 (2,742) 28,632 7,568 42,267
-------- ------- -------- -------- -------- -------- ------- ------- -------- -------- -------- --------
NET ASSETS:
Beginning of period 166,350 112,553 426,002 384,943 123,235 93,388 64,824 58,130 141,413 112,781 105,703 63,436
-------- ------- -------- -------- -------- -------- ------- ------- -------- -------- -------- --------
End of period $197,261 $166,350 $471,097 $426,002 $135,342 $123,235 $66,819 $64,824 $138,671 $141,413 $113,271 $105,703
======== ======== ======== ======== ======== ======== ======= ======= ======== ======== ======== ========
</TABLE>
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.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
84 & 85
<PAGE>
<PAGE>
STATEMENT
OF CHANGES
IN NET ASSETS
(000)
AS OF
DECEMBER 31, 1996
(UNAUDITED)
COREFUND
COREFUND FIXED INCOME FUNDS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
-------------------- -------------------- ------------------ ---------------------
SHORT-
SHORT TERM INTERMEDIATE GOVERNMENT BOND
INCOME FUND BOND FUND INCOME FUND FUND
-------------------- -------------------- ------------------- ---------------------
7/1/96 7/1/95(1) 7/1/96 7/1/95 7/1/96 7/1/95 7/1/96 7/1/95(1)
to to to to to to to to
12/31/96 6/30/96 12/31/96 6/30/96 12/31/96 6/30/96 12/31/96 6/30/96
-------- -------- --------- -------- -------- -------- --------- ---------
OPERATIONS:
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Net investment income $ 809 $ 1,174 $ 5,043 $ 4,696 $ 614 $ 892 $ 6,321 $ 8,196
Net realized gain (loss) from
security transactions and
foreign currency transactions (7) (81) 253 (987) (83) 31 18 (1,252)
Net unrealized appreciation
(depreciation) on
investments, forward
foreign currency
contracts and translation
of assets and
liabilites in foreign currencies 110 (170) 1,432 156 367 (414) 2,908 (4,687)
-------- -------- --------- --------- -------- -------- --------- ---------
Net increase in
net assets resulting
from operations 912 923 6,728 3,865 898 509 9,247 2,257
-------- -------- --------- --------- -------- -------- --------- ---------
DIVIDENDS DISTRIBUTED FROM:
Net investment income:
Class Y (b) (807) (1,238) (4,955) (4,567) (573) (812) (6,283) (8,523)
Class A (b) (2) -- (88) (123) (41) (78) (40) (56)
Net realized gains:
Retail Class (a) -- -- -- -- -- -- -- (10)
Institutional Class (a) -- (32) -- -- -- -- -- (1,458)
Class Y (b) -- -- -- -- -- -- -- --
Class A (b) -- -- -- -- -- -- -- --
-------- -------- --------- --------- -------- -------- --------- ---------
Total dividends distributed (809) (1,270) (5,043) (4,690) (614) (890) (6,323) (10,047)
-------- -------- --------- --------- -------- -------- --------- ---------
CAPITAL TRANSACTIONS (2):
Retail Class (a):
Exchanged for Class A Shares -- (1) -- -- -- -- -- (1,294)
Proceeds from shares issued -- -- -- -- -- -- -- 122
Reinvestment of cash
distributions -- -- -- -- -- -- -- 44
Cost of shares redeemed -- (11) -- -- -- -- -- (198)
-------- -------- --------- --------- -------- -------- --------- ---------
Decrease in net assets
from Retail
Class transactions -- (12) -- -- -- -- -- (1,326)
-------- -------- --------- --------- -------- -------- --------- ---------
Institutional Class (a):
Exchanged for Class Y Shares -- (29,918) -- -- -- -- -- (194,533)
Proceeds from shares issued -- 5,788 -- -- -- -- -- 28,200
Reinvestment of cash
distributions -- 931 -- -- -- -- -- 7,057
Cost of shares redeemed -- (12,577) -- -- -- -- -- (28,354)
-------- -------- --------- --------- -------- -------- --------- ---------
Decrease in net assets
from Institutional
Class transactions -- (35,776) -- -- -- -- -- (187,630)
-------- -------- --------- --------- -------- -------- --------- ---------
Class Y (b):
Proceeds from shares
issued in merger (c) -- 29,918 -- 113,422 -- -- -- 194,533
Proceeds from shares
issued 4,164 2,116 19,368 16,680 5,786 5,296 9,320 13,215
Reinvestment of
cash distributions 942 203 5,047 3,735 304 412 6,815 1,409
Cost of shares redeemed (4,892) (2,040) (23,147) (28,327) (753) (2,718) (22,600) (9,632)
-------- -------- --------- --------- -------- -------- --------- ---------
Increase (decrease)
in net assets
from Class Y transactions 214 30,197 1,268 105,510 5,337 2,990 (6,465) 199,525
-------- -------- --------- --------- -------- -------- --------- ---------
Class A (b):
Proceeds from shares
issued in merger (c) -- 1 -- 1,207 -- -- -- 1,294
Proceeds from shares issued 142 -- 112 282 285 157 226 65
Reinvestment of cash
distributions 2 -- 80 85 42 70 40 13
Cost of shares redeemed -- -- (228) (445) (132) (285) (181) (88)
-------- -------- --------- --------- -------- -------- --------- ---------
Increase (decrease)
in net assets
from Class A transactions 144 1 (36) 1,129 195 (58) 85 1,284
-------- -------- --------- --------- -------- -------- --------- ---------
Increase (decrease)
in net assets derived
from capital share transactions 358 (5,590) 1,232 106,639 5,532 2,932 (6,380) 11,853
-------- -------- --------- --------- -------- -------- --------- ---------
Net increase (decrease)
in net assets 461 (5,937) 2,917 105,814 5,816 2,551 (3,456) 4,063
-------- -------- --------- --------- -------- -------- --------- ---------
NET ASSETS:
Beginning of period 30,133 36,070 162,903 57,089 15,230 12,679 199,878 195,815
-------- -------- --------- --------- -------- -------- --------- ---------
End of period $ 30,594 $ 30,133 $ 165,820 $ 162,903 $ 21,046 $ 15,230 $196,422 $ 199,878
======== ======== ========= ========= ======== ======== ========= =========
AMOUNTS DESIGNATED AS "--" ARE EITHER $0 OR HAVE BEEN ROUNDED TO $0.
</TABLE>
86
<PAGE>
<TABLE>
<CAPTION>
------------------- ------------------ ------------------ -----------------
INTERMEDIATE PENNSYLVANIA NEW JERSEY
GLOBAL MUNICIPAL MUNICIPAL MUNICIPAL
BOND FUND BOND FUND BOND FUND BOND FUND
------------------- ------------------ ------------------ -----------------
7/1/96 7/1/95 7/1/96 7/1/95 7/1/96 7/1/95 7/1/96 7/1/95
TO TO TO TO TO TO TO TO
6/30/96 12/31/96 6/30/96 12/31/96 6/30/96 12/31/96 6/30/96 12/31/96
------- -------- ------ -------- ------- --------- ------- -------
OPERATIONS:
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Net investment income $ 956 $ 1,851 $ 32 $ 46 $ 279 $ 234 $ 37 $ 77
Net realized gain (loss) from security
transactions and foreign currency transactions (50) 1,197 (2) -- 21 (30) -- 16
Net unrealized appreciation (depreciation)
on investments, forward foreign currency
contracts and translation of assets and
liabilites in foreign currencies 612 (638) 26 13 189 36 20 (8)
-------- -------- ------- ------- -------- ------- ------- ------
Net increase in net assets resulting from 1,518 2,410 56 59 489 240 57 85
operations -------- -------- ------- ------- -------- ------- ------- ------
DIVIDENDS DISTRIBUTED FROM:
Net investment income:
Class Y (b) (1,494) (2,254) (14) (10) (253) (212) (31) (72)
Class A (b) (7) (11) (18) (35) (24) (21) (6) (5)
Net realized gains:
Retail Class (a) -- -- -- -- -- -- -- --
Institutional Class (a) -- -- -- -- -- -- -- --
Class Y (b) -- -- -- -- -- -- (8) (9)
Class A (b) -- -- -- -- -- -- (2) (1)
-------- -------- ------- ------- -------- ------- ------- ------
Total dividends distributed (1,501) (2,265) (32) (45) (277) (233) (47) (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 86 5,150 586 193 2,007 1,175 215 438
Reinvestment of cash distributions 1,717 1,604 6 8 166 134 8 39
Cost of shares redeemed (220) (797) (50) (167) (1,366) (397) (202) (625)
-------- -------- ------- ------- -------- ------- ------- ------
Increase (decrease) in net assets
from Class Y transactions 1,583 5,957 542 34 807 6,615 21 (148)
-------- -------- ------- ------- -------- ------- ------- ------
Class A (b):
Proceeds from shares issued in merger (c) -- -- -- -- -- 684 -- --
Proceeds from shares issued 14 2 26 126 308 124 19 196
Reinvestment of cash distributions 10 10 20 31 25 17 8 4
Cost of shares redeemed (8) (32) (109) (179) (326) (153) (2) (3)
-------- -------- ------- ------- -------- ------- ------- ------
Increase (decrease) in net assets
from Class A transactions 16 (20) (63) (22) 7 672 25 197
-------- -------- ------- ------- -------- ------- ------- ------
Increase (decrease) in net assets derived
from capital share transactions 1,599 5,937 479 12 814 7,287 46 49
-------- -------- ------- ------- -------- ------- ------- ------
Net increase (decrease) in net assets 1,616 6,082 503 26 1,026 7,294 56 47
-------- -------- ------- ------- -------- ------- ------- ------
NET ASSETS:
Beginning of period 33,150 27,068 1,418 1,392 9,883 2,589 1,621 1,574
-------- -------- ------- ------- -------- ------- ------- ------
End of period $ 34,766 $33,150 $ 1,921 $ 1,418 $ 10,909 $ 9,883 $ 1,677 $1,621
======== ======== ======= ======= ======== ======= ======= ======
</TABLE>
-87-
<PAGE>
OF CHANGES
IN NET ASSETS
(000)
AS OF
DECEMBER 31, 1996 COREFUND
(UNAUDITED)
COREFUND MONEY MARKET FUNDS
<TABLE>
<CAPTION>
------------------------- ------------------------ ----------------------
TREASURY CASH TAX-FREE
RESERVE RESERVE RESERVE
------------------------- ------------------------ ----------------------
7/1/96 7/1/95 7/1/96 7/1/95 7/1/96 7/1/95
to to to to to to
12/31/96 6/30/96 12/31/96 6/30/96 12/31/96 6/30/96
---------- ------------ ------------ ---------- ---------- ---------
<S> <C> <C> <C> <C> <C> <C>
OPERATIONS:
Net investment income $ 22,288 $ 29,926 $ 21,124 $ 31,873 $ 1,873 $ 2,300
Net realized gain (loss) on
securities transactions 22 (4) 3 (2) -- --
----------- ---------- ---------- ----------- --------- ---------
Net increase in net assets
resulting from operations 22,310 29,922 21,127 32,974 1,873 2,300
----------- ---------- ---------- ----------- --------- ---------
DIVIDENDS DISTRIBUTED FROM:
Net investment income:
Class Y (a) (21,911) (28,940) (20,627) (32,056) (1,829) (2,245)
Class C (a) (377) (986) (498) (920) (45) (55)
Net realized gain:
Class Y (a) -- -- -- -- -- --
Class C (a) -- -- -- -- -- --
----------- ---------- ---------- ----------- --------- ---------
Total dividends distributed (22,288) (29,926) (21,125) (32,976) (1,874) (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 1,550,124 2,291,733 1,044,829 1,319,098 211,812 223,212
Reinvestment of cash
distributions 3,003 5,323 1,619 3,471 128 216
Cost of shares redeemed (1,598,599) (2,280,888) (1,049,102) (1,262,885) (196,921) (233,363)
----------- ---------- ---------- ----------- --------- ---------
Increase (decrease) in net
assets from Class Y (a)
transactions (45,472) 413,361 (2,654) 279,874 15,019 41,440
----------- ---------- ---------- ----------- --------- ---------
Class C (a)
Proceeds from shares issued
in merger (b) -- 744 -- 2,038 -- 1,258
Proceeds from shares issued 6,047 32,271 19,114 34,793 2,118 2,753
Reinvestment of cash
distributions 152 440 472 905 41 53
Cost of shares redeemed (11,573) (35,682) (17,804) (35,584) (2,114) (2,738)
----------- ---------- ---------- ----------- --------- ---------
Increase (decrease) in net assets
from Class C transactions (5,374) (2,227) 1,782 2,152 45 1,326
----------- ---------- ---------- ----------- --------- ---------
Increase (decrease) in net
assets derived from
capital share transactions (50,846) 411,134 (872) 282,026 15,064 42,766
----------- ---------- ---------- ----------- --------- ---------
Net increase (decrease)
in net assets (50,824) 411,130 (870) 282,024 15,063 42,766
----------- ---------- ---------- ----------- --------- ---------
NET ASSETS:
Beginning of period 911,948 500,818 809,948 527,924 107,046 64,280
----------- ---------- ---------- ----------- --------- ---------
End of period $ 861,124 $ 911,948 $ 809,078 $ 809,948 $ 122,109 $ 107,046
=========== ========== ========== ========== ========= =========
-88-
</TABLE>
<PAGE>
[THIS PAGE INTENTIONALLY LEFT BLANK.]
<PAGE>
FINANCIAL
HIGHLIGHTS
AS OF
DECEMBER 31, 1996
(UNAUDITED)
COREFUND EQUITY FUNDS
FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD
<TABLE>
<CAPTION>
--------- ---------- ---------------- ------------- -------------
NET ASSET REALIZED AND DISTRIBUTIONS DISTRIBUTIONS
VALUE NET UNREALIZED FROM NET FROM
BEGINNING INVESTMENT GAINS OR (LOSSES) INVESTMENT CAPITAL
OF PERIOD INCOME ON SECURITIES INCOME GAINS
--------- ---------- ---------------- ------------- -------------
<S> <C> <C> <C> <C> <C>
- ------------------
EQUITY INDEX FUND
- ------------------
CLASS Y**
1996 (a) $28.47 $ 0.26 $3.06 $(0.26) $(0.24)
1996 23.79 0.51 5.47 (0.51) (0.79)
1995 20.54 0.52 4.24 (0.52) (0.99)
1994 20.97 0.55 (0.43) (0.55) --
1993 19.22 0.52 1.84 (0.52) (0.09)
1992 18.46 0.52 1.80 (0.48) (1.08)
1991 1 19.48 0.03 (0.94) (0.02) (0.09)
CLASS A
1996 (a)10 $29.62 $0.06 $1.97 $(0.13) $(0.24)
- ------------------
CORE EQUITY FUND(9)
- ------------------
CLASS Y*
1996 (a) $17.26 $0.08 $2.30 $(0.08) $(1.47)
1996 17.07 0.14 1.49 (0.14) (1.30)
INSTITUTIONAL CLASS*
1995 15.00 0.19 2.87 (0.19) (0.80)
CLASS A*
1996 (a) $17.28 $0.05 $2.31 $(0.06) $(1.47)
1996 17.08 0.12 1.49 (0.11) (1.30)
RETAIL CLASS*
1995 15.00 0.18 2.87 (0.17) (0.80)
PRIOR CLASS
1994 $15.39 $0.11 $0.22 $(0.11) $(0.61)
1993 13.93 0.14 1.89 (0.14) (0.43)
1992 13.08 0.19 1.02 (0.19) (0.17)
1991 8.95 0.26 4.13 (0.26) --
1990 2 10.00 0.14 (1.05) (0.14) --
- ------------------
GROWTH EQUITY FUND
- ------------------
CLASS Y**
1996 (a) $14.19 $0.03 $0.82 $(0.03) $(1.57)
1996 11.18 0.08 3.36 (0.08) (0.35)
1995 9.11 0.08 2.07 (0.08) --
1994 9.95 0.05 (0.84) (0.05) --
1993 8.74 0.08 1.21 (0.08) --
19923 10.00 0.05 (1.26) (0.05) --
CLASS A**
1996 (a) $14.17 $0.01 $0.82 $(0.01) $(1.57)
1996 11.17 0.05 3.35 (0.05) (0.35)
1995 9.10 0.06 2.07 (0.06) --
1994 9.95 0.04 (0.85) (0.04) --
19934 9.80 0.03 0.15 (0.03) --
- ----------------------
SPECIAL EQUITY FUND(9)
- ----------------------
CLASS Y*
1996 (a) $11.86 $0.03 $0.73 $(0.03) $(2.39)
1996 11.42 0.07 2.13 (0.07) (1.69)
INSTITUTIONAL CLASS*
1995 9.37 0.12 2.12 (0.12) (0.07)
CLASS A*
1996 (a) $11.85 $0.02 0.73 (0.02) (2.39)
1996 11.42 0.08 2.11 (0.07) (1.69)
RETAIL CLASS*
1995 9.37 0.12 2.12 (0.12) (0.07)
PRIOR CLASS
1994 5 $10.00 $0.06 $(0.63) $(0.06) $ --
----------- -------- --------- ------------
NET
NET ASSETS RATIO
ASSET VALUE END OF EXPENSES
END TOTAL OF PERIOD TO AVERAGE
OF PERIOD RETURN 8 (000) NET ASSETS
----------- -------- --------- ------------
<S> <C> <C> <C> <C>
- -----------------
EQUITY INDEX FUND
- -----------------
CLASS Y**
1996 (a) $31.29 $11.70%+ $196,329 0.37%
1996 28.47 25.69 166,350 0.35
1995 23.79 24.45 112,533 0.37
1994 20.54 0.55 72,552 0.35
1993 20.97 12.39 50,551 0.49
1992 19.22 12.59 20,166 0.57
1991 1 18.46 (4.64)+ 12,117 0.97
CLASS A
1996(a)10 $31.28 6.85%+ $932 0.37%
- -------------------
CORE EQUITY FUND(9)
- -------------------
CLASS Y*
1996 (a) $18.09 $13.82%+ $458,064 0.95%
1996 17.26 19.24 414,824 0.97
INSTITUTIONAL CLASS*
1995 17.07 22.00 378,352 1.05
CLASS A*
1996 (a) $18.11 $13.68%+ $13,033 0.12%
1996 17.28 19.11 11,178 1.22
RETAIL CLASS*
1995 17.08 21.94 6,591 1.34
PRIOR CLASS
1994 $15.00 2.21% $50,128 1.49%
1993 15.39 14.90 45,677 1.20
1992 13.93 9.27 28,103 0.92
1991 13.08 49.37 12,830 0.54
1990 2 8.95 (9.22) 5,982 0.65
- ------------------
GROWTH EQUITY FUND
- ------------------
CLASS Y**
1996 (a) $13.44 5.86%+ $131,447 0.95%
1996 14.19 31.36 120,073 0.89
1995 11.18 23.71 91,345 0.76
1994 9.11 (8.01) 64,877 0.69
1993 9.95 14.76 63,777 0.43
1992 3 8.74 (12.05)%+ 33,418 0.14
CLASS A**
1996 (a) $13.42 5.76%+ $3,895 1.20%
1996 14.17 31.00 3,162 1.14
1995 11.17 23.44 2,043 1.01
1994 9.10 (8.13) 1,730 0.94
1993 4 9.95 1.80+ 5,224 0.80
- ----------------------
SPECIAL EQUITY FUND(9)
- ----------------------
CLASS Y*
1996 (a) $10.20 6.75%+ $65,173 0.57%
1996 11.86 22.27 63,680 0.34
INSTITUTIONAL CLASS*
1995 11.42 24.44 57,396 0.32
CLASS A*
1996 (a) $10.19 6.63%+ $1,646 0.85%
1996 11.85 22.14 1,144 0.37
RETAIL CLASS*
1995 11.42 24.44 734 0.27
PRIOR CLASS
1994 5 9.37 (5.72)% $10,069 0.15%
---------- ----------- ------------- --------- -------
RATIO RATIO OF NET
RATIO OF EXPENSES INCOME (LOSS)
OF NET TO AVERAGE TO AVERAGE
INCOME NET ASSETS NET ASSETS PORTFOLIO AVG.
TO AVERAGE (EXCLUDING (EXCLUDING TURNOVER COMM.
NET ASSETS WAIVERS) WAIVERS) RATE *** RATE 11
---------- ----------- ------------- --------- -------
<S> <C> <C> <C> <C> <C>
- ------------------
EQUITY INDEX FUND
- ------------------
CLASS Y**
1996 (a) 1.78% 0.73% 1.42% 4% $0.0646
1996 1.94 0.71 1.59 13 0.0641
1995 2.48 0.76 2.09 27 n/a
1994 2.63 0.75 2.23 13 n/a
1993 2.82 0.88 2.43 4 n/a
1992 2.66 1.06 2.17 27 n/a
19911 1.79 1.20 1.56 -- n/a
CLASS A
1996(a)10 1.73% 0.71% 1.39% 4% $0.0646
- ------------------
CORE EQUITY FUND(9)
- ------------------
CLASS Y*
1996 (a) 0.88% 1.04% 0.79% 46% $0.0631
1996 1.15 1.01 1.11 114 0.0636
INSTITUTIONAL CLASS*
1995 1.44 1.10 1.44 119 n/a
CLASS A*
1996 (a) 0.63% 1.29% 0.54% 46% $0.0631
1996 0.89 1.26 0.85 114 0.0636
RETAIL CLASS*
1995 1.23 1.53 1.04 119 n/a
PRIOR CLASS
1994 0.75% 1.51% 0.73% 35% n/a
1993 0.94 1.41 0.73 24 n/a
1992 1.47 1.23 1.17 39 n/a
1991 2.30 1.48 1.36 68 n/a
1990 2 2.29 1.59 1.35 43 n/a
- ------------------
GROWTH EQUITY FUND
- ------------------
CLASS Y**
1996 (a) 0.39% 1.07% 0.27% 30% $0.0600
1996 0.64 1.05 0.48 81 0.0601
1995 0.84 1.10 0.50 113 n/a
1994 0.48 1.11 0.06 127 n/a
1993 0.85 1.11 0.17 103 n/a
1992 3 1.38 1.12 0.40 66 n/a
CLASS A**
1996 (a) 0.13% 1.32% 0.01% 30% $0.0600
1996 0.40 1.30 0.23 81 0.0601
1995 0.59 1.35 0.25 113 n/a
1994 0.23 1.36 (0.19) 127 n/a
1993 4 0.39 1.48 (0.29) 103 n/a
- ----------------------
SPECIAL EQUITY FUND(9)
- ----------------------
CLASS Y*
1996 (a) 0.54% 1.82% (0.71)% 44% $0.0594
1996 0.94 1.79 (0.51) 72 0.0539
INSTITUTIONAL CLASS*
1995 1.14 1.97 (0.51) 129 n/a
CLASS A*
1996 (a) 0.28% 2.07% (0.94)% 44% $0.0594
1996 0.91 1.82 (0.55) 72 0.0539
RETAIL CLASS*
1995 1.29 2.24 (0.68) 129 n/a
PRIOR CLASS
1994 5 1.06% 2.10% (0.89)% 39% n/a
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
-90-
<PAGE>
<TABLE>
<CAPTION>
For a Share Outstanding Throughout the Period
--------- ---------- ---------------- ------------- -------------
NET ASSET REALIZED AND DISTRIBUTIONS DISTRIBUTIONS
VALUE NET UNREALIZED FROM NET FROM
BEGINNING INVESTMENT GAINS OR (LOSSES) INVESTMENT CAPITAL
OF PERIOD INCOME ON SECURITIES INCOME GAINS
--------- ---------- ---------------- ------------- -------------
<S> <C> <C> <C> <C> <C>
- -------------------------
INTERNATIONAL GROWTH FUND
- -------------------------
CLASS Y**
1996 (a) $13.97 $0.03 $0.39 $(0.37) $(0.86)
1996 12.29 0.16 1.86 (0.28) (0.06)
1995 13.18 0.12 (0.17) (0.04) (0.80)
1994 11.71 0.12 1.78 (0.12) (0.31)
1993 10.52 0.10 1.16 (0.07) --
1992 10.10 0.17 0.31 -- (0.06)
1991 10.75 0.19 (0.44) (0.27) (0.13)
1990 6 10.00 0.11 0.86 (0.09) (0.13)
CLASS A**
1996 (a) $13.96 $0.02 $0.38 $(0.34) $(0.86)
1996 12.27 0.11 1.89 (0.25) (0.06)
1995 13.17 0.09 (0.17) (0.02) (0.80)
1994 11.71 0.06 1.82 (0.11) (0.31)
1993 4 10.07 0.05 1.59 -- --
- -------------
BALANCED FUND
- -------------
CLASS Y**
1996 (a) $12.59 $0.18 $0.45 $(0.18) $(0.68)
1996 11.06 0.33 1.68 (0.33) (0.15)
1995 9.88 0.35 1.21 (0.35) (0.03)
1994 10.39 0.35 (0.51) (0.35) --
1993 4 10.00 0.16 0.39 (0.16) --
CLASS A**
1996 (a) $12.59 $0.16 $0.47 $(0.17) $(0.68)
1996 11.06 0.30 1.68 (0.30) (0.15)
1995 9.89 0.34 1.19 (0.33) (0.03)
1994 10.38 0.31 (0.49) (0.31) --
1993 7 10.00 0.16 0.38 (0.16) --
<CAPTION>
----------- -------- --------- ----------- ----------
NET RATIO
NET ASSETS RATIO OF NET
ASSET VALUE END OF EXPENSES INCOME
END TOTAL OF PERIOD TO AVERAGE TO AVERAGE
OF PERIOD RETURN 8 (000) NET ASSETS NET ASSETS
----------- -------- --------- ----------- ----------
<S> <C> <C> <C> <C> <C>
- -------------------------
INTERNATIONAL GROWTH FUND
- -------------------------
CLASS Y**
1996 (a) $13.16 3.20%+ $136,532 1.11% 0.39%
1996 13.97 16.72 139,275 1.14 1.05
1995 12.29 (0.21) 110,838 1.05 0.98
1994 13.18 16.28 108,911 0.99 0.23
1993 11.71 12.06 61,655 0.99 1.22
1992 10.52 4.90 42,594 0.96 1.67
1991 10.10 (2.71) 20,582 0.99 1.80
1990 6 10.75 9.74+ 13,513 1.22 2.57
CLASS A**
1996 (a) $13.16 3.04%+ $2,139 1.36% 0.14%
1996 13.96 16.54 2,138 1.39 0.80
1995 12.27 (0.48) 1,943 1.30 0.73
1994 13.17 16.08 2,019 1.24 0.05
1993 4 11.71 16.29+ 344 1.15 1.51
- -------------
BALANCED FUND
- -------------
CLASS Y**
1996 (a) $12.36 5.01%+ $109,744 0.77% 2.86%
1996 12.59 18.41 102,515 0.81 2.79
1995 11.06 16.21 61,092 0.73 3.51
1994 9.88 (1.62) 42,429 0.62 3.46
1993 4 10.39 5.52+ 29,434 0.45 3.38
CLASS A**
1996 (a) $12.37 4.97%+ $3,527 1.02% 2.61%
1996 12.59 18.13 3,188 1.06 2.53
1995 11.06 15.84 2,344 0.98 3.27
1994 9.89 (1.86) 2,222 0.87 3.21
1993 7 10.38 2.50+ 701 0.55 5.76
<CAPTION>
----------- ------------- --------- -------
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 *** RATE 11
----------- ------------- --------- -------
<S> <C> <C> <C> <C>
- -------------------------
INTERNATIONAL GROWTH FUND
- -------------------------
CLASS Y**
1996 (a) 1.21% 0.29% 29% $0.0223
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
1990 6 1.99 1.80 20 n/a
CLASS A**
1996 (a) 1.46% 0.04% 29% $0.0223
1996 1.50 0.69 41 0.0270
1995 1.44 0.59 59 n/a
1994 1.43 (0.14) 67 n/a
1993 4 1.44 1.22 59 n/a
- -------------
BALANCED FUND
- -------------
CLASS Y**
1996 (a) 0.99% 2.64% 28% $0.0610
1996 1.03 2.57 74 0.0621
1995 1.07 3.17 46 n/a
1994 1.08 3.00 56 n/a
1993 4 1.39 2.45 21 n/a
CLASS A**
1996 (a) 1.24% 2.39% 28% $0.0610
1996 1.27 2.32 74 0.0621
1995 1.32 2.93 46 n/a
1994 1.33 2.75 56 n/a
1993 7 1.48 4.83 21 n/a
</TABLE>
AMOUNTS DESIGNATED AS "-" ARE EITHER $0 OR HAVE BEEN ROUNDED TO $0.
* ON FEBRUARY 21, 1995 THE SHARES OF THE FUNDS WERE REDESIGNATED AS EITHER
RETAIL OR INSTITUTIONAL SHARES. FOR THE YEAR ENDED OCTOBER 31, 1995, THE
FINANCIAL HIGHLIGHTS' RATIOS OF EXPENSES, NET INVESTMENT INCOME, TOTAL
RETURN, AND THE PER SHARE INVESTMENT ACTIVITIES AND DISTRIBUTIONS ARE
PRESENTED ON A BASIS WHEREBY THE FUND'S NET INVESTMENT INCOME, EXPENSES,
AND DISTRIBUTIONS FOR THE PERIOD NOVEMBER 1, 1994 THROUGH FEBRUARY 20, 1995
WERE ALLOCATED TO EACH CLASS OF SHARES BASED UPON THE RELATIVE NET ASSETS OF
EACH CLASS OF SHARES AS OF FEBRUARY 21, 1995 AND THE RESULTS COMBINED
THEREWITH THE RESULTS OF OPERATIONS AND DISTRIBUTIONS FOR EACH APPLICABLE
CLASS FOR THE PERIOD FEBRUARY 21, 1995 THROUGH OCTOBER 31, 1995.
ADDITIONALLY, ON APRIL 15 & 22, 1996 THE CONESTOGA EQUITY AND SPECIAL EQUITY
FUNDS WERE ACQUIRED BY COREFUNDS, INC.; AT WHICH TIME THE INSTITUTIONAL
CLASS OF SHARES OF THESE FUNDS WERE EXCHANGED FOR CLASS Y SHARES AND THE
RETAIL CLASS OF SHARES OF THESE FUNDS WERE EXCHANGED FOR CLASS A SHARES.
** ON APRIL 22, 1996 THE SERIES A SHARES OF EACH FUND WERE REDESIGNATED CLASS Y
AND THE SERIES B SHARES OF EACH FUND WERE REDESIGNATED CLASS A.
*** FOR 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.
(A) RATIOS FOR THIS SIX-MONTH PERIOD ENDED DECEMBER 31, 1996, HAVE 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 DECEMBER 31, 1996.
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.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
-91-
<PAGE>
FINANCIAL
HIGHLIGHTS
AS OF
DECEMBER 31, 1996
(UNAUDITED)
COREFUND FIXED INCOME FUNDS
For a Share Outstanding Throughout the Period
<TABLE>
<CAPTION>
---------- --------- ------------ ---------- ----------
NET REALIZED AND
ASSET UNREALIZED DISTRIBUTIONS DISTRIBUTIONS
VALUE NET GAINS FROM NET FROM CAPITAL
BEGINNING INVESTMENT OR(LOSSES) INVESTMENT GAINS
OF PERIOD INCOME ON SECURITIES INCOME
---------- --------- ------------ ---------- ----------
<C> <C> <C> <C> <C> <C>
- -------------------------
SHORT TERM INCOME FUND 11
- -------------------------
CLASS Y*
1996 (a) $ 9.94 $0.27 $ 0.03 $(0.27) $ --
1996 10.05 0.36 (0.08) (0.38) (0.01)
INSTITUTIONAL CLASS*
19951 10.00 0.25 0.03 (0.23) --
CLASS A*
1996 (a) $ 9.93 $0.26 $ 0.04 $(0.26) $ --
1996 10.04 0.35 (0.10) (0.35) (0.01)
RETAIL CLASS*
1995 2 10.01 0.23 0.02 (0.22) --
- ----------------------------
SHORT-INTERMEDIATE BOND FUND
- ----------------------------
CLASS Y**
1996 (a) $ 9.76 $0.30 $ 0.10 $(0.30) $ --
1996 9.84 0.57 (0.08) (0.57) --
1995 9.63 0.53 0.21 (0.53) --
1994 10.18 0.43 (0.53) (0.43) (0.02)
1993 10.01 0.47 0.31 (0.47) (0.14)
1992 3 10.00 0.23 0.01 (0.23) --
CLASS A**
1996 (a) $ 9.76 $0.29 $ 0.10 $(0.29) $ --
1996 9.84 0.54 (0.08) (0.54) --
1995 9.63 0.54 0.20 (0.53) --
1994 10.18 0.41 (0.53) (0.41) (0.02)
1993 4 10.01 0.20 0.17 (0.20) --
- ----------------------
GOVERNMENT INCOME FUND
- ----------------------
CLASS Y**
1996 (a) $ 9.62 $0.31 $ 0.14 $(0.31) $ --
1996 9.83 0.61 (0.21) (0.61) --
1995 9.52 0.62 0.31 (0.62) --
1994 10.18 0.50 (0.62) (0.50) (0.04)
19935 10.00 0.13 0.18 (0.13) --
CLASS A**
1996 (a) $ 9.62 $0.30 $ 0.15 $(0.30) $ --
1996 9.84 0.58 (0.22) (0.58) --
1995 9.51 0.61 0.33 (0.61) --
1994 10.17 0.47 (0.62) (0.47) (0.04)
1993 4 10.00 0.07 0.17 (0.07) --
- ------------
BOND FUND 11
- ------------
CLASS Y*
1996 (a) $10.15 $0.32 $ 0.14 $(0.32) $ --
1996 10.55 0.43 (0.30) (0.45) (0.08)
INSTITUTIONAL CLASS*
1995 9.81 0.61 0.71 (0.58) --
CLASS A*
1996 (a) $10.15 $0.31 $ 0.14 $(0.31) $ --
1996 10.56 0.44 (0.33) (0.44) (0.08)
RETAIL CLASS*
1995 9.81 0.60 0.72 (0.57) --
PRIOR CLASS
1994 $11.18 $0.53 $(1.04) $(0.52) $(0.34)
1993 10.89 0.56 0.54 (0.56) (0.25)
1992 10.65 0.70 0.32 (0.68) (0.10)
1991 9.96 0.78 0.69 (0.78) --
1990 6 10.00 0.50 (0.04) (0.50) --
<CAPTION>
--------- ------- --------- ------------ ---------- --------- ---------- --------
RATIO RATIO OF
NET RATIO OF EXPENSES NET INCOME
NET ASSETS RATIO OF NET TO AVERAGETO TO AVERAGE
ASSET VALUE END OF EXPENSES INCOME NET ASSETS NET ASSETS PORTFOLIO
END TOTAL OF PERIOD TO AVERAGE TO AVERAGE (EXCLUDING (EXCLUDING TURNOVER
OF PERIOD RETURN 10 (000) NET ASSETS NET ASSETS WAIVERS) WAIVERS) RATE***
--------- ------- --------- ------------ ---------- --------- ---------- --------
<C> <C> <C> <C> <C> <C> <C> <C> <C>
- ------------------------
SHORT TERM INCOME FUND 11
- ------------------------
CLASS Y*
1996 (a) $ 9.97 3.05%+ $ 30,449 0.46% 5.38% 1.04% 4.80% 25%
1996 9.94 2.78 30,132 0.51 5.31 1.03 4.79 102
INSTITUTIONAL CLASS*
19951 10.05 2.57%+ 36,059 0.63 5.43 1.08 4.98 40
CLASS A*
1996 (a) $ 9.97 3.05%+ $ 145 0.72% 5.16% 1.30% 4.58% 25%
1996 9.93 2.55 1 0.76 5.05 1.25 4.56 102
RETAIL CLASS*
1995 2 10.04 2.87%+ 11 0.88 5.05 1.33 4.60 40
- ----------------------------
SHORT-INTERMEDIATE BOND FUND
- ----------------------------
CLASS Y**
1996 (a) $ 9.86 4.14%+ $162,763 0.47% 6.03% 0.73% 5.77% 83%
1996 9.76 5.05 159,841 0.55 5.80 0.81 5.54 257
1995 9.84 8.22 55,128 0.60 5.76 0.84 5.52 405
1994 9.63 (0.32) 48,379 0.58 4.30 0.86 4.02 299
1993 10.18 7.90 44,692 0.42 4.62 0.86 4.18 188
1992 3 10.01 2.49+ 22,623 0.11 5.73 0.84 5.00 51
CLASS A**
1996 (a) $ 9.86 4.01%+ $ 3,057 0.72% 5.78% 0.98% 5.52% 83%
1996 9.76 4.79 3,062 0.81 5.51 1.06 5.27 257
1995 9.84 7.95 1,961 0.85 5.27 1.09 5.03 405
1994 9.63 (0.56) 9,365 0.83 4.05 1.11 3.77 299
1993 4 10.18 3.95+ 5,752 0.75 3.78 1.19 3.34 188
- ----------------------
GOVERNMENT INCOME FUND
- ----------------------
CLASS Y**
1996 (a) $ 9.76 4.77%+ $ 19,547 0.66% 6.38% 0.86% 6.18% 80%
1996 9.62 4.09 13,943 0.64 6.17 0.89 5.92 131
1995 9.83 10.26 11,305 0.59 6.53 0.98 6.14 368
1994 9.52 (1.34) 9,089 0.50 4.93 1.00 4.43 157
1993 5 10.18 3.12+ 6,323 0.44 5.41 1.10 4.75 93
CLASS A**
1996 (a) $ 9.77 4.74%+ $ 1,499 0.91% 6.13% 1.11% 5.93% 80%
1996 9.62 3.73 1,287 0.88 5.93 1.14 5.67 131
1995 9.84 10.23 1,374 0.85 6.25 1.24 5.86 368
1994 9.51 (1.57) 1,536 0.75 4.68 1.25 4.18 157
1993 4 10.17 1.71+ 201 0.63 5.35 1.29 4.69 93
- ------------
BOND FUND 11
- ------------
CLASS Y*
1996 (a) $10.29 4.63%+ $195,046 0.56% 6.27% 1.04% 5.79% 114%
1996 10.15 1.23 198,605 0.55 6.28 0.97 5.86 190
INSTITUTIONAL CLASS*
1995 10.55 13.87 194,442 0.71 6.09 1.12 5.68 352
CLASS A*
1996 (a) $10.29 4.49%+ $ 1,376 0.81% 6.02% 1.29% 5.54% 114%
1996 10.15 0.98 1,273 0.80 6.02 1.22 5.61 190
RETAIL CLASS*
1995 10.56 13.83 1,373 0.97 6.02 1.44 5.55 352
PRIOR CLASS
1994 $ 9.81 (4.75)% $ 23,377 1.01% 5.07% 1.60% 4.48% 232%
1993 11.18 10.63 27,346 0.88 5.16 1.49 4.55 158
1992 10.89 9.82 15,180 0.46 6.78 1.24 6.01 99
1991 10.65 15.16 7,255 0.47 7.71 1.41 6.78 47
1990 6 9.96 4.64+ 4,593 0.68 7.75 1.62 6.81 23
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS
92
<PAGE>
<TABLE>
<CAPTION>
COREFUND
For a Share Outstanding Throughout the Period
---------- --------- ------------ ---------- ---------- ---------- --------
NET REALIZED AND
ASSET UNREALIZED DISTRIBUTIONS DISTRIBUTIONS NET
VALUE NET GAINS FROM NET FROM ASSET VALUE TOTAL
BEGINNING INVESTMENT OR(LOSSES) INVESTMENT CAPITAL END OF RETURN10
OF PERIOD INCOME ON SECURITIES INCOME GAINS PERIOD
---------- --------- ------------ ---------- ---------- ---------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
- ----------------
GLOBAL BOND FUND
- ----------------
CLASS Y**
1996 (a) $ 9.70 $0.26 $ 0.17 $(0.43) $ -- $ 9.70 4.48%+
1996 9.62 0.47 0.30 (0.69) -- 9.70 8.00
1995 9.06 0.62 0.24 (0.30) -- 9.62 9.70
1994 7 10.00 0.25 (1.15) (0.04) -- 9.06 (9.00)+
CLASS A**
1996 (a) $ 9.68 $0.23 $ 0.20 $(0.42) $ -- $ 9.69 4.47%+
1996 9.61 0.61 0.12 (0.66) -- 9.68 7.74
1995 9.04 0.61 0.24 (0.28) -- 9.61 9.57
1994 7 10.00 0.19 (1.11) (0.04) -- 9.04 (9.22)+
- --------------------------------
INTERMEDIATE MUNICIPAL BOND FUND
- --------------------------------
CLASS Y**
1996 (a) $ 9.92 $0.21 $ 0.14 $(0.21) $ -- $10.06 3.54%+
1996 9.83 0.37 0.09 (0.37) -- 9.92 4.74
1995 9.68 0.38 0.15 (0.38) -- 9.83 5.58
1994 10.09 0.39 (0.41) (0.39) -- 9.68 (0.27)
1993 8 10.00 0.04 0.09 (0.04) -- 10.09 1.33+
CLASS A**
1996 (a) $ 9.92 $0.20 $ 0.14 $(0.20) $ -- $10.06 3.41%+
1996 9.83 0.35 0.09 (0.35) -- 9.92 4.48
1995 9.67 0.35 0.16 (0.35) -- 9.83 5.42
1994 10.08 0.37 (0.41) (0.37) -- 9.67 (0.52)
1993 4 10.00 0.03 0.08 (0.03) -- 10.08 1.19+
- --------------------------------
PENNSYLVANIA MUNICIPAL BOND FUND
- --------------------------------
CLASS Y**
1996 (a) $10.22 $0.27 $ 0.21 $(0.27) $ -- $10.43 4.75%+
1996 10.16 0.55 0.06 (0.55) -- 10.22 6.02
1995 9.95 0.51 0.21 (0.51) -- 10.16 7.50
1994 9 10.00 0.06 (0.05) (0.06) -- 9.95 0.14+
CLASS A**
1996 (a) $10.22 $0.26 $ 0.21 $(0.26) $ -- $10.43 4.62%+
1996 10.16 0.52 0.06 (0.52) -- 10.22 5.76
1995 9.95 0.49 0.21 (0.49) -- 10.16 7.25
1994 9 10.00 0.06 (0.05) (0.06) -- 9.95 0.09+
- ------------------------------
NEW JERSEY MUNICIPAL BOND FUND
- ------------------------------
CLASS Y**
1996 (a) $10.08 $0.25 $ 0.13 $(0.25) $(0.07) $10.14 3.83%+
1996 10.12 0.51 0.02 (0.51) (0.06) 10.08 5.28
1995 9.94 0.52 0.18 (0.52) -- 10.12 7.25
1994 9 10.00 0.06 (0.06) (0.06) -- 9.94 0.01+
CLASS A**
1996 (a) $10.07 $0.24 $ 0.14 $(0.24) $(0.07) $10.14 3.80%+
1996 10.12 0.48 0.01 (0.48) (0.06) 10.07 4.93
1995 9.95 0.49 0.17 (0.49) -- 10.12 6.84
1994 9 10.00 0.06 (0.05) (0.06) -- 9.95 0.08+
<CAPTION>
------------ ---------- ------------- ------------ ---------- ---------
RATIO RATIO OF
NET RATIO OF EXPENSES NET INCOME
ASSETS RATIO OF NET TO AVERAGETO TO AVERAGE
END OF EXPENSES INCOME NET ASSETS NET ASSETS PORTFOLIO
OF PERIOD TO AVERAGE TO AVERAGE (EXCLUDING (EXCLUDING TURNOVER
(000) NET ASSETS NET ASSETS WAIVERS) WAIVERS) RATE***
------------ ---------- ------------- ------------ ---------- ---------
<S> <C> <C> <C> <C> <C> <C>
- ----------------
GLOBAL BOND FUND
- ----------------
CLASS Y**
1996 (a) $34,599 0.78% 5.53% 0.96% 5.35% 13%
1996 32,998 0.71 5.81 0.95 5.57 67
1995 26,898 0.64 6.84 1.03 6.45 133
1994 7 24,957 0.73 5.04 1.12 4.65 161
CLASS A**
1996 (a) $ 167 1.03% 5.28% 1.21% 5.10% 13%
1996 152 0.96 5.56 1.20 5.32 67
1995 170 0.89 6.59 1.28 6.20 133
1994 7 167 0.98 4.79 1.37 4.40 161
- --------------------------------
INTERMEDIATE MUNICIPAL BOND FUND
- --------------------------------
CLASS Y**
1996 (a) $ 955 0.53% 4.17% 0.91% 3.79% 8%
1996 403 0.81 3.73 1.31 3.23 10
1995 365 0.82 3.91 1.26 3.47 9
1994 1,088 0.63 3.91 1.17 3.37 43
1993 8 2,009 0.58 2.74 1.45 1.87 10
CLASS A**
1996 (a) $ 966 0.77% 3.88% 1.12% 3.53% 8%
1996 1,015 1.08 3.47 1.61 2.94 10
1995 1,027 1.08 3.65 1.52 3.21 9
1994 1,311 0.88 3.66 1.42 3.12 43
1993 4 166 0.81 2.51 1.68 1.64 10
- --------------------------------
PENNSYLVANIA MUNICIPAL BOND FUND
- --------------------------------
CLASS Y**
1996 (a) $ 9,888 0.09% 5.25% 0.84% 4.50% 23%
1996 8,864 0.21 5.25 0.96 4.50 92
1995 2,272 0.39 5.26 1.14 4.51 18
1994 9 434 0.42 5.09 1.17 4.34 3
CLASS A**
1996 (a) $ 1,021 0.34% 5.00% 1.09% 4.25% 23%
1996 994 0.46 4.93 1.21 4.18 92
1995 317 0.64 4.95 1.39 4.20 18
1994 9 163 0.67 4.84 1.42 4.09 3
- --------------------------------
NEW JERSEY MUNICIPAL BOND FUND
- --------------------------------
CLASS Y**
1996 (a) $ 1,346 0.31% 4.91% 1.06% 4.16% 9%
1996 1,317 0.37 4.93 1.12 4.18 21
1995 1,550 0.42 5.21 1.17 4.46 32
1994 9 1,432 0.43 5.07 1.35 4.15 13
CLASS A**
1996 (a) $ 331 0.54% 4.71% 1.29% 3.96% 9%
1996 304 0.60 4.65 1.35 3.90 21
1995 24 0.68 4.97 1.44 4.21 32
1994 9 2 0.68 4.82 1.60 3.90 13
</TABLE>
AMOUNTS DESIGNATED AS "--" ARE EITHER $0 OR HAVE BEEN ROUNDED TO $0.
* ON FEBRUARY 21, 1995 THE SHARES OF THE FUNDS WERE REDESIGNATED AS
EITHER RETAIL OR INSTITUTIONAL SHARES. FOR THE YEAR ENDED OCTOBER 31,
1995, THE FINANCIAL HIGHLIGHTS' RATIOS OF EXPENSES, NET INVESTMENT
INCOME, TOTAL RETURN, AND THE PER SHARE INVESTMENT ACTIVITIES AND
DISTRIBUTIONS ARE PRESENTED ON A BASIS WHEREBY THE FUND'S NET
INVESTMENT INCOME, EXPENSES, AND DISTRIBUTIONS FOR THE PERIOD NOVEMBER
1, 1994 THROUGH FEBRUARY 20, 1995 WERE ALLOCATED TO EACH CLASS OF
SHARES BASED UPON THE RELATIVE NET ASSETS OF EACH CLASS OF SHARES AS
OF FEBRUARY 21, 1995 AND THE RESULTS COMBINED THEREWITH THE RESULTS OF
OPERATIONS AND DISTRIBUTIONS FOR EACH APPLICABLE CLASS FOR THE PERIOD
FEBRUARY 21, 1995 THROUGH OCTOBER 31, 1995. ADDITIONALLY, ON APRIL 22,
1996 THE CONESTOGA SHORT-TERM INCOME AND BOND FUNDS WERE ACQUIRED BY
COREFUNDS, INC. AT WHICH TIME THE INSTITUTIONAL CLASS OF SHARES OF
THESE FUNDS WERE REDESIGNATED CLASS Y AND THE RETAIL CLASS OF 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.
(A) RATIOS FOR THIS SIX-MONTH PERIOD ENDED DECEMBER 31, 1996, HAVE BEEN
ANNUALIZED.
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.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
93
<PAGE>
FINANCIAL
HIGHLIGHTS
AS OF
DECEMBER 31, 1996
(UNAUDITED)
COREFUND MONEY MARKET FUNDS
For a Share Outstanding Throughout the Period
<TABLE>
<CAPTION>
--------- ---------- ------------- ----------- ------
NET
ASSET DISTRIBUTIONS NET
VALUE NET FROM NET ASSET VALUE
- ---------------- BEGINNING INVESTMENT INVESTMENT END TOTAL
TREASURY RESERVE OF PERIOD INCOME INCOME OF PERIOD RETURN
- ---------------- --------- ---------- ------------- ----------- ------
<S> <C> <C> <C> <C> <C>
CLASS Y*
1996 (a) $1.00 $0.02 $(0.02) $1.00 2.46%+
1996 1.00 0.05 (0.05) 1.00 5.20
1995 1.00 0.05 (0.05) 1.00 4.98
1994 1.00 0.03 (0.03) 1.00 2.91
1993 1.00 0.03 (0.03) 1.00 2.96
1992 1.00 0.05 (0.05) 1.00 4.73
1991 1.00 0.07 (0.07) 1.00 7.11
1990 1.00 0.08 (0.08) 1.00 8.38
1989 2 1.00 0.06 (0.06) 1.00 4.66+
CLASS C*
1996 (a) $1.00 $0.02 $(0.02) $1.00 2.34%+
1996 1.00 0.05 (0.05) 1.00 4.94
1995 1.00 0.05 (0.05) 1.00 4.72
1994 1.00 0.03 (0.03) 1.00 2.65
1993 1 1.00 0.01 (0.01) 1.00 1.21+
- ------------
CASH RESERVE
- ------------
CLASS Y*
1996 (a) $1.00 $0.02 $(0.02) $1.00 2.51%+
1996 1.00 0.05 (0.05) 1.00 5.26
1995 1.00 0.05 (0.05) 1.00 5.15
1994 1.00 0.03 (0.03) 1.00 3.00
1993 1.00 0.03 (0.03) 1.00 2.99
1992 1.00 0.05 (0.05) 1.00 4.83
1991 1.00 0.07 (0.07) 1.00 7.28
1990 1.00 0.08 (0.08) 1.00 8.65
1989 1.00 0.09 (0.09) 1.00 8.87
1988 1.00 0.07 (0.07) 1.00 6.70
1987 1.00 0.06 (0.06) 1.00 5.85
CLASS C*
1996 (a) $1.00 $0.02 $(0.02) $1.00 2.38%+
1996 1.00 0.05 (0.05) 1.00 5.00
1995 1.00 0.05 (0.05) 1.00 4.89
1994 1.00 0.03 (0.03) 1.00 2.74
1993 1 1.00 0.01 (0.01) 1.00 1.23+
- ----------------
TAX-FREE RESERVE
- ----------------
CLASS Y*
1996 (a) $1.00 $0.02 $(0.02) $1.00 1.53%+
1996 1.00 0.03 (0.03) 1.00 3.20
1995 1.00 0.03 (0.03) 1.00 3.12
1994 1.00 0.02 (0.02) 1.00 2.03
1993 1.00 0.02 (0.02) 1.00 2.23
1992 1.00 0.03 (0.03) 1.00 3.56
1991 3 1.00 0.01 (0.01) 1.00 1.07+
CLASS C*
1996 (a) $1.00 $0.01 $(0.01) $1.00 1.41%+
1996 1.00 0.03 (0.03) 1.00 2.95
1995 1.00 0.03 (0.03) 1.00 2.86
1994 1.00 0.02 (0.02) 1.00 1.78
1993 1 1.00 0.01 (0.01) 1.00 0.85+
-------- ----------- ---------- ----------- ----------
RATIO RATIO OF
NET RATIO OF EXPENSES NET INCOME
ASSETS RATIO OF NET TO AVERAGE TO AVERAGE
END OF EXPENSES INCOME NET ASSETS NET ASSETS
- ---------------- OF PERIOD TO AVERAGE TO AVERAGE (EXCLUDING (EXCLUDING
TREASURY RESERVE (000) NET ASSETS NET ASSETS WAIVERS) WAIVERS)
- ---------------- -------- ----------- ---------- ----------- ----------
<S> <C> <C> <C> <C> <C>
CLASS Y*
1996 (a) $847,112 0.50% 4.84% 0.71% 4.63%
1996 892,562 0.50 5.02 0.77 4.75
1995 479,206 0.48 4.91 0.85 4.54
1994 484,974 0.48 2.87 0.86 2.49
1993 446,788 0.46 2.89 0.85 2.50
1992 444,388 0.38 4.58 0.82 4.14
1991 427,439 0.37 6.80 0.82 6.35
1990 270,524 0.37 8.03 0.84 7.56
1989 2 220,479 0.20 9.26 0.84 8.62
CLASS C*
1996 (a) $14,012 0.75% 4.58% 0.96% 4.37%
1996 19,386 0.75 4.81 1.03 4.53
1995 21,612 0.73 4.81 1.10 4.44
1994 7,573 0.73 2.62 1.11 2.24
1993 1 7,672 0.75 2.46 1.14 2.07
- ------------
CASH RESERVE
- ------------
CLASS Y*
1996 (a) $787,560 0.49% 4.92% 0.70% 4.71%
1996 790,211 0.50 5.09 0.78 4.81
1995 510,341 0.48 5.04 0.85 4.67
1994 505,273 0.47 2.95 0.85 2.57
1993 460,832 0.46 2.97 0.85 2.58
1992 568,672 0.38 4.68 0.82 4.24
1991 473,187 0.37 6.94 0.82 6.49
1990 316,290 0.34 8.28 0.80 7.82
1989 186,151 0.37 8.62 0.90 8.05
1988 82,399 0.55 6.54 1.14 5.96
1987 35,054 0.54 5.60 1.01 5.13
CLASS C*
1996 (a) $21,518 0.74% 4.67% 0.95% 4.46%
1996 19,736 0.75 4.86 1.03 4.58
1995 17,583 0.73 4.86 1.10 4.49
1994 11,451 0.72 2.70 1.10 2.32
1993 1 15,330 0.76 2.52 1.15 2.13
- ----------------
TAX-FREE RESERVE
- ----------------
CLASS Y*
1996 (a) $119,214 0.49% 3.03% 0.70% 2.82%
1996 104,196 0.48 3.14 0.76 2.86
1995 62,756 0.48 3.09 0.85 2.72
1994 79,384 0.49 2.00 0.87 1.62
1993 72,255 0.51 2.20 0.89 1.82
1992 80,147 0.37 3.39 0.88 2.88
1991 3 42,573 0.06 4.20 0.81 3.45
CLASS C*
1996 (a) $2,895 0.74% 2.78% 0.95% 2.57%
1996 2,850 0.73 2.94 1.02 2.65
1995 1,524 0.73 2.80 1.10 2.43
1994 2,708 0.74 1.75 1.12 1.37
1993 1 1,795 0.76 1.71 1.14 1.33
</TABLE>
* 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.
(A) RATIOS FOR THIS SIX-MONTH PERIOD ENDED DECEMBER 31, 1996, HAVE 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.
94
<PAGE>
NOTES TO
FINANCIAL
STATEMENTS
AS OF
DECEMBER 31, 1996
(UNAUDITED)
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, Intermediate Municipal Bond Fund, Global Bond Fund,
Pennsylvania Municipal Bond Fund, New Jersey Municipal Bond Fund (the Fixed
Income Funds), Cash Reserve, Treasury Reserve, and Tax-Free Reserve (the Money
Market Funds) are portfolios offered by CoreFunds, Inc. (The Company), an
open-end investment company registered under the Investment Company Act of 1940,
as amended. The Company is presently authorized to offer 20 separate portfolios
(the Portfolios):
EQUITY PORTFOLIOS: MONEY MARKET PORTFOLIOS:
Equity Index Fund Treasury Reserve
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 Intermediate Municipal Bond Fund
Global 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 which are listed on a securities exchange for which market quotations are
available are valued by an independent pricing service at the last quoted sales
price for such securities on each business day. If there is no such reported
sale, these securities and unlisted securities for which market quotations are
readily available are valued at the most recent quoted bid price using
procedures determined in good faith by the Board of Trustees. Debt obligations
with sixty days or less remaining until maturity may be valued at their
amortized cost. Under this valuation method, purchase discounts and premiums are
accreted and amortized ratably to maturity and are included in interest income.
Investment securities of the Money Market Funds are stated at amortized
cost which approximates market value. Under this valuation method, 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:
(I) market value of investment securities, assets and liabilities at the
current rate of exchange; and
(II) purchases and sales of investment securities, income and expenses at
the relevant rates of exchange prevailing on the respective dates of
such transactions.
The International 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 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.
95
<PAGE>
NOTES TO
FINANCIAL
STATEMENTS
(CONTINUED)
AS OF
DECEMBER 31, 1996
(UNAUDITED) COREFUND
FORWARD FOREIGN CURRENCY CONTRACTS--The International Growth Fund and
Global Bond Fund enter into forward foreign currency contracts as hedges against
either specific transactions or portfolio positions. The aggregate principal
amounts of the contracts are not recorded as the funds intend to settle the
contracts prior to delivery. All commitments are "marked-to-market" daily at the
applicable foreign exchange rate and any resulting unrealized gains or losses
are recorded currently. The funds realize gains or losses at the time forward
contracts are extinguished. Financial future contracts are valued at the
settlement price established each day by the board of trade on exchange on which
they are traded.
SECURITY TRANSACTIONS AND INVESTMENT INCOME--Security transactions are
accounted for on the trade date of the security purchase or sale. Cost used in
determining net realized capital gains and losses on the sale of securities are
those of the specific securities sold, adjusted for the accretion and
amortization of purchase discounts or premiums during the respective holding
period, which is calculated using the effective interest method. Interest income
is recorded on the accrual basis. Dividend income is recorded on ex-dividend
date.
REPURCHASE AGREEMENTS--Securities pledged as collateral for Repurchase
Agreements are held by each Portfolio's custodian bank until maturity of the
Repurchase Agreements. Provisions of the Agreements and procedures adopted by
the 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 Portfolios are
charged directly to that Portfolio. Other operating expenses of the Company are
pro-rated to the Portfolios on the basis of relative net assets. Class specific
expenses, such as the 12b-1 fees, are borne by that class. Income, other
expenses and accumulated realized and unrealized gains and losses of a
Portfolio are allocated to the respective class on the basis of the relative net
asset value each day.
DISTRIBUTION TO SHAREHOLDERS--The Equity Index 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 Portfolio are distributed to its shareholders at least
annually.
Distributions from net investment income and net realized capital gains are
determined in accordance with U.S. Federal income tax regulations, which may
differ from those amounts determined under generally accepted accounting
principles. These book/tax differences are either temporary or permanent in
nature. To the extent these differences are permanent, they are charged or
credited to paid in capital in the period that the difference arises.
FEDERAL INCOME TAXES--It is each Portfolio's intention to continue to
qualify as a regulated investment company and distribute all of its taxable
income. Accordingly, no provision for Federal income tax is required.
OTHER--Organizational costs incurred with the start up of the Balanced
Fund, Government Income Fund, Short Term Income Fund, Intermediate Municipal
Bond Fund, Global Bond Fund, Pennsylvania Municipal Bond Fund and New Jersey
Municipal Bond Fund are being amortized on a straight line basis over a maximum
period of sixty months. If any or all of the shares representing initial capital
of each fund are redeemed by any holder thereof prior to the end of the
amortization period, the proceeds will be reduced by the unamortized
organizational cost balance in the same proportion as the number of shares
redeemed bears to the initial shares outstanding immediately preceding the
redemption.
96
<PAGE>
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>
ADVISER INVESTMENT ADVISORY ADVISER INVESTMENT ADVISORY
FUND FEE AGREEMENT DATE FUND FEE AGREEMENT DATE
- ------------------ ------------- -------------------- ------------- ---------- -------------------
<S> <C> <C> <C> <C> <C>
Equity Index 0.40% March 25, 1991 Short Term Income 0.74% April 12, 1996
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
Bond 0.50 May 15, 1994
Cash Reserve 0.40 April 12, 1996 New Jersey Municipal
Tax-Free Reserve 0.40 April 12, 1996 Bond 0.50 May 15, 1994
</TABLE>
This fee is computed daily and paid monthly for all Funds. Additionally,
for the year ended December 31, 1996, CSIA has voluntarily waived a portion of
their fees in order to assist the Funds in maintaining competitive expense
ratios.
CoreStates Bank serves as Custodian to the Company. 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 Portfolio's Administrator.
Under the terms of such agreement, SFR is entitled to receive an annual fee of
0.25% on the average net assets of the Portfolios. SFR voluntarily waives a
portion of their fees in order to assist the Funds in maintaining competitive
expense ratios.
Effective for the period July 1, 1995 to November 16, 1995, SEI Financial
Management Corporation acted as the Transfer Agent of the Trust. Pursuant to a
Transfer Agency agreement dated November 16, 1995, Boston Financial Data
Services ("BFDS"), a wholly owned subsidiary of State Street Bank and Trust
Company acts as the Portfolio's Transfer Agent. As such, BFDS provides transfer
agency, dividend disbursing and shareholder servicing for the Portfolios.
On November 2, 1992, SEI Financial Services ("SFS"), a wholly owned
subsidiary of SEI, became the Portfolios exclusive Distributor pursuant to a
distribution agreement dated October 30, 1992.
The Company has adopted a Distribution Plan (the Plan) for those Portfolios
offering Class A shares. The Plan provides for the payment by the Company to the
Distributor of up to 0.25% of the daily net assets of each Class A and C
Portfolio to which the Plan is applicable. The Distributor is authorized to use
this fee as compensation for its distribution related services and as payment to
certain securities broker/dealers and financial institutions which enter into
shareholder servicing agreements or broker agreements with the Distributor. The
Portfolios paid approximately $786,000 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 Portfolios.
The Portfolios have paid legal fees to a law firm in which the Secretary of
the Company is partner.
97
<PAGE>
NOTES TO FINANCIAL STATEMENTS
(CONTINUED)
AS OF DECEMBER 31, 1996
(UNAUDITED)
5. INVESTMENT TRANSACTIONS
During the six month period ended December 31, 1996, purchases of
securities and proceeds from sales of securities, other than temporary
investments in short-term securities, were as follows:
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------------------
---------------------------------------- -----------------------------------------
PURCHASES SALES
---------------------------------------- -----------------------------------------
U.S. U.S.
PORTFOLIO INVESTMENT TRANSACTIONS (000) GOVERNMENT OTHER TOTAL GOVERNMENT OTHER TOTAL
------------ ------------ --------- --------------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
Growth Equity Fund $ -- $ 44,045 $ 44,045 $ -- $ 38,037 $ 38,037
Core Equity Fund -- 197,802 197,802 -- 197,551 197,551
Equity Index Fund -- 16,265 16,265 -- 7,372 7,372
Special Equity Fund -- 27,952 27,952 -- 30,824 30,824
International Growth Fund -- 44,272 44,272 -- 38,000 38,000
Balanced Fund 6,965 22,449 29,414 5,559 22,154 27,713
Government Income Fund 563 18,492 19,055 225 14,251 14,476
Short Term Income Fund 5,262 1,490 6,752 4,885 5,423 10,308
Short-Intermediate Bond Fund 97,128 29,172 126,300 70,779 60,800 131,579
Intermediate Municipal Fund -- 1,076 1,076 -- 473 473
Bond Fund 140,885 78,598 219,483 124,557 89,019 213,576
Global Bond Fund -- 3,929 3,929 -- 9,981 9,981
Pennsylvania Municipal Bond Fund -- 5,478 5,478 -- 4,720 4,720
New Jersey Municipal Bond Fund -- 972 972 -- 552 552
- ------------------------------------------------------------------------------------------------------------------------------
</TABLE>
At June 30, 1996, the Government Income Fund, Short- Intermediate Bond
Fund, Intermediate Municipal Bond Fund, Global Bond Fund, Pennsylvania Municipal
Bond Fund, Cash Reserve and Tax-Free Reserve had capital loss carryforwards for
federal tax purposes of approximately $226,787, $1,700,933, $76,745, $844,494,
$82,558, $167,988 and $54,381, respectively, resulting from security sales. For
tax purposes, the losses in the Funds can be carried forward for a maximum of
eight years to offset any net realized capital gains. The carryforward for the
Government Income Fund, Short- Intermediate Bond Fund, Intermediate Municipal
Bond Fund, Global Bond Fund, Pennsylvania Municipal Bond Fund, Cash Reserve and
Tax-Free Reserve Funds expires in 2003.
At December 31, 1996 the total cost of securities and the net realized
gains or losses on securities sold for Federal income tax purposes was not
materially different from amounts reported for financial purposes. The aggregate
gross unrealized gain or loss on securities at December 31, 1996 for each
portfolio within the CoreFunds is as follows:
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------
------------ ------------ -----------
AGGREGATE AGGREGATE
GROSS GROSS
APPRECIATION DEPRECIATION NET
------------- ------------ -----------
AGGREGATE GROSS UNREALIZED GAIN (LOSS)(000)
<S> <C> <C> <C>
Growth Equity Fund $33,672 $ (2,221) $31,451
Core Equity Fund 80,942 (12,572) 68,370
Equity Index Fund 65,002 (3,280) 61,722
Special Equity Fund 10,936 (8,813) 2,123
International Growth Fund 22,717 (7,457) 15,260
Balanced Fund 15,541 (1,560) 13,981
Government Income Fund 209 (226) (17)
Short Term Income Fund 59 (27) 32
Short-Intermediate Bond Fund 1,175 (439) 736
Intermediate Municipal Fund 23 (1) 22
Bond Fund 1,618 (824) 794
Global Bond Fund 960 (400) 560
Pennsylvania Municipal Bond Fund 246 (39) 207
New Jersey Municipal Bond Fund 44 (1) 43
- ----------------------------------------------------------------------------------------------------------
</TABLE>
98
<PAGE>
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 December 31, 1996:
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------------
------------------ ------------------ ------------ ------------------
UNREALIZED
CONTRACTS TO IN EXCHANGE APPRECIATION
MATURITY DELIVER/RECEIVE FOR (DEPRECIATION)
------------------ ------------------- ------------ ------------------
INTERNATIONAL GROWTH FUND:
<S> <C> <C> <C> <C>
Foreign Currency Sales: 2/14/97 JY 1,039,484,106 $9,034,962 $ 412,038
---------
Foreign Currency Purchases: 2/14/97 JY 490,664,026 $4,354,800 (90,059)
---------
Net Unrealized Appreciation $ 321,979
=========
GLOBAL BOND FUND:
Foreign Currency Sales: 3/7/97 DM 9,460,000 $6,206,535 $ 34,065
2/26-3/6/97 DK 23,970,000 4,083,598 35,075
1/13-3/6/97 FF 22,530,000 4,355,942 75,106
3/7/97 NL 2,540,500 1,476,053 10,197
---------
$ 154,443
---------
Foreign Currency Purchases: 3/6/97 DK 12,010,000 $2,046,154 22,293
---------
Net Unrealized Appreciation $ 176,736
=========
- --------------------------------------------------------------------------------------------------------------------------
</TABLE>
CURRENCY LEGEND
DM German Marks
DK Danish Kroner
FF French Francs
JY Japanese Yen
NL Netherlands Guilder
At December 31, 1996, the CoreFund Global Bond Fund had unrealized gains on
closed but unsettled forward foreign currency contracts of $10,422 scheduled to
settle on March 7, 1997.
99
<PAGE>
NOTES TO FINANCIAL STATEMENTS
(CONTINUED)
AS OF DECEMBER 31, 1996
(UNAUDITED)
7. CONCENTRATION OF CREDIT RISK
The Intermediate Municipal Bond Fund, Pennsylvania Municipal Bond Fund, New
Jersey Municipal Bond Fund, and Tax-Free Reserve invest in debt instruments of
municipal issuers. Although these Funds maintain a diversified portfolio, with
the exception of the Pennsylvania Municipal Bond Fund and the New Jersey
Municipal Bond Fund, the issuers ability to meet their obligations may be
affected by economic developments in a specific state or region.
The Intermediate Municipal Bond Fund, Pennsylvania Municipal Bond Fund, New
Jersey Municipal Bond Fund, and Tax-Free Reserve invest in securities which
include revenue bonds, tax exempt commercial paper, tax and revenue anticipation
notes, and general obligation bonds. At December 31, 1996, the percentage of
portfolio investments by each revenue source was as follows:
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------
------------ ------------ ------------ --------
INTERMEDIATE PENNSYLVANIA NEW JERSEY
MUNICIPAL MUNICIPAL MUNICIPAL
BOND BOND BOND TAX-FREE
FUND FUND FUND RESERVE
------------ ------------ ------------ ---------
REVENUE BONDS:
<S> <C> <C> <C> <C>
Education Bonds 10.6% 22.6% 21.4% 10.5%
Health Care Bonds 7.1 13.6 5.7 3.9
Transportation Bonds 10.8 3.6 6.7 6.6
Utility Bonds 14.1 14.1 6.4 3.7
Housing Bonds -- 4.8 -- 2.2
Pollution Control Bonds 3.5 0.3 5.5 8.7
Industrial Bonds 5.1 17.1 -- 7.5
Public Facility Bonds -- 1.4 2.9 2.6
Resource Recovery Bonds 5.0 -- -- 1.1
Other 5.6 3.0 3.9 5.5
GENERAL OBLIGATIONS 38.2 19.5 47.5 1.8
TAX EXEMPT COMMERCIAL PAPER -- -- -- 38.4
TAX AND REVENUE ANTICIPATION NOTES -- -- -- 3.3
TAX ANTICIPATION NOTES -- -- -- 4.2
------ ------ ------ ------
100.0% 100.0% 100.0% 100.0%
- ----------------------------------------------------------------------------------------------------------------
</TABLE>
The rating of long-term debt as a percentage of total value of investments
at December 31, 1996 is as follows:
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
---------- ---------- ---------- -------- --------- ---------- ------ ----------
SHORT- PENNSYLVANIA NEW JERSEY
INTERMEDIATE INTERMEDIATE GOVERNMENT GLOBAL MUNICIPAL MUNICIPAL SHORT-TERM
BOND MUNICIPAL INCOME BOND BOND BOND BOND INCOME
FUND FUND FUND FUND FUND FUND FUND FUND
---------- ---------- ---------- -------- ----------- ---------- ------ ----------
STANDARD & POORS RATINGS:
<S> <C> <C> <C> <C> <C> <C> <C> <C>
AAA 69% 66% 91% 87% 70% 38% 69% 63%
AA+ -- 20 -- -- 9 18 -- --
AA -- 3 -- 6 -- -- -- --
AA- 1 3 -- -- 6 9 -- --
A+ 3 2 -- -- 3 -- 4 3
A 4 -- -- -- 2 -- 3 2
A- 2 -- -- -- 1 -- 5 2
BBB+ 3 -- -- -- -- -- 3 --
BBB 4 -- -- -- -- -- 4 5
BBB- 1 -- -- -- -- -- 2 2
BB+ 2 -- -- -- -- -- 1 4
BB 1 -- -- -- -- -- -- --
NR 10 6 9 7 9 35 9 19
--------- --------- --------- --------- --------- --------- --------- ---------
100% 100% 100% 100% 100% 100% 100% 100%
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
100
<PAGE>
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 December 31, 1996, the percentage of securities with credit
enhancements are as follows:
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------
------------ ------------
LETTERS
OF BOND
CREDIT INSURANCE
------------ ------------
<S> <C> <C>
Intermediate Municipal Bond Fund 3.5% 62.9%
Pennsylvania Municipal Bond Fund -- 62.4
New Jersey Municipal Bond Fund 9.2 19.8
Tax-Free Reserve 47.5 38.5
- ---------------------------------------------------------------------
</TABLE>
8. SHARE TRANSACTIONS (000):
For the six month period ended December 31, 1996.
<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 664 1,657 1,481 580 512 1,061 1,550,124 1,044,829 211,812
Shares issued in lieu
of cash distributions 116 2,056 927 1,309 840 593 3,003 1,619 128
Shares redeemed (348) (2,428) (1,092) (871) (943) (922) (1,598,599) (1,049,102) (196,921)
----- ------ ------ ------ ------ ------ ---------- ---------- --------
Net increase (decrease) 432 1,285 1,316 1,018 409 732 (45,472) (2,654) 15,019
===== ====== ====== ====== ====== ====== ========== ========== ========
CLASS A
Shares issued 30 61 50 39 16 45 6,047 19,114 2,118
Shares issued in lieu
of cash distributions -- 57 30 31 14 20 152 472 41
Shares redeemed -- (45) (13) (6) (20) (33) (11,573) (17,804) (2,114)
----- ------ ------ ------ ------ ------ ---------- ---------- --------
Net increase (decrease) 30 73 67 64 10 32 (5,374) 1,782 45
===== ====== ====== ====== ====== ====== ========== ========== ========
TOTAL SHARE ACTIVITY
FOR PERIOD 462 1,358 1,383 1,082 419 764 (50,846) (872) 15,064
===== ====== ====== ====== ====== ====== ========== ========== ========
</TABLE>
(1) THIS FUND WAS FORMERLY KNOWN AS THE EQUITY FUND.
AMOUNTS DESIGNATED AS "--" ARE EITHER $0 OR HAVE BEEN ROUNDED TO $0.
101
<PAGE>
NOTES TO
FINANCIAL
STATEMENTS COREFUND
(CONCLUDED)
AS OF
DECEMBER 31,1996
(UNAUDITED)
<TABLE>
<CAPTION>
8. SHARE TRANSACTIONS (000): -- CONTINUED
----------- -------- ----------- ------- -------- ------------- ------------- ------------
SHORT TERM SHORT- GOVERNMENT GLOBAL INTERMEDIATE PENNSYLVANIA NEW JERSEY
INCOME INTERMEDIATE INCOME BOND BOND MUNICIPAL MUNICIPAL MUNICIPAL
FUND FUND FUND FUND FUND BOND FUND BOND FUND BOND FUND
----------- -------- ---------- -------- -------- ------------- ------------ ----------
CLASS Y
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Shares issued in lieu 418 1,972 599 909 8 58 193 21
of cash distributions
94 514 31 667 176 1 16 1
Shares repurchased (491) (2,357) (77) (2,197) (22) (5) (131) (20)
----- ------- ----- ------- ----- ----- ----- ----
Net increase (decrease) 21 129 553 (621) 162 54 78 2
===== ======= ===== ======= ===== ===== ===== ====
CLASS A
Shares issued 15 11 29 22 1 3 31 2
Shares issued in lieu
of cash distributions -- 8 4 4 1 2 2 1
Shares repurchased -- (23) (14) (17) (1) (11) (32) --
----- ------- ----- ------- ----- ----- ----- ----
Net increase (decrease) 15 (4) 19 9 1 (6) 1 3
===== ======= ===== ======= ===== ===== ===== ====
TOTAL SHARE ACTIVITY
FOR PERIOD 36 125 572 (612) 163 48 79 5
===== ======= ===== ======= ===== ===== ===== ====
</TABLE>
AMOUNTS DESIGNATED AS "--" ARE EITHER $0 OR HAVE BEEN ROUNDED TO $0.
102
<PAGE>
SHAREHOLDER
NOTES
COREFUND
103
<PAGE>
SHAREHOLDER
NOTES
COREFUND
104
<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. SEI FINANCIAL SERVICES COMPANY SERVES AS
DISTRIBUTOR AND IS NOT AFFILIATED WITH CORESTATES BANK, N.A.
<PAGE>
COREFUNDS, INC.
DIRECTORS
Emil J. Mikity, Chairman
George H. Strong
Erin Anderson
Thomas Taylor
Cheryl Wade
OFFICERS
David G. Lee, President
James W. Jennings, Secretary
INVESTMENT ADVISER
CoreStates Investment Advisers, Inc.
Philadelphia, PA 19101
ADMINISTRATOR
SEI Fund Resources
Wayne, PA 19087
DISTRIBUTOR
SEI Financial Services Company
Oaks, PA 19456
LEGAL COUNSEL
Morgan, Lewis &Bockius
Philadelphia, PA 19103
AUDITORS
Ernst & Young LLP
Philadelphia, PA 19103
INVESTMENT ADVISER
[GRAPHIC]
CORESTATES LOGO
FOR MORE INFORMATION, CALL COREFUND
AT 1-800-355-CORE (2673).
COR-F-043-04
<PAGE>
CoreFunds,Inc.
- --------------------------------------------------------------------------------
ELITE CASH RESERVE
SEMI-ANNUAL REPORT
December 31, 1996
<PAGE>
MANAGERS' DISCUSSION OF FUND PERFORMANCE COREFUND ELITE MONEY MARKET FUNDS
- --------------------------------------------------------------------------------
SEMI-ANNUAL RESULTS:
[BULLET] This Fund returned 2.68% for the six months ending December 31, 1996.
[BULLET] The Fund's benchmark, the IBC Financial Data All Taxable Money Fund
Average, returned 2.45% for the same period.
[BULLET] Assets in the Fund as of December 31, 1996 totaled $373 million.
COMMENTARY:
The average maturity of the CoreFund Elite Cash Reserve increased from 45
days to a range of 50 to 60 days during the second half of 1996. While using a
laddered maturity approach, we continued to add value by taking advantage of
spread products such as commercial paper. The addition of eligible callable
agencies and asset-backed securities also boosted yield.
The Federal Reserve rate remained unchanged during this period. However,
economic data was weak-to-stable which caused volatility in short-term rates.
The market traded on economic statistics throughout the period. The Fund took
advantage of these conditions by extending the average maturity to enhance the
overall yield.
Going forward, we continue to watch economic indicators that are directly
related to inflation. Specifically, retail sales, manufacturing capacity
utilization, employment reports, and average hourly earnings. It is our view
that short-term rates will remain stable during the first quarter of 1997.
1
<PAGE>
STATEMENT OF NET ASSETS COREFUND ELITE MONEY MARKET FUNDS
- --------------------------------------------------------------------------------
December 31, 1996 (Unaudited)
PAR VALUE
ELITE CASH RESERVE (000) (000)
- -------------------------------------------------------------------------------
COMMERCIAL PAPER - 76.5%
AI Credit
5.423%, 01/16/97 $ 5,000 $ 4,989
Abbey National Bank
5.412%, 03/11/97 5,000 4,949
Abbott Laboratories
5.327%, 01/06/97 5,000 4,996
Alcatel Alsthom, Incorporated
5.484%, 01/27/97 5,670 5,648
Ameritech Capital Funding
5.614%, 01/08/97 4,750 4,745
5.372%, 02/05/97 5,000 4,974
Asset Securities Coop Corp.
5.391%, 01/13/97 5,000 4,991
5.383%, 02/26/97 5,000 4,959
5.402%, 03/11/97 5,000 4,949
Associates Corp. of North America
5.516%, 01/31/97 1,000 995
Banc One Guaranteed Funding
5.361%, 01/21/97 5,000 4,985
5.559%, 02/14/97 5,000 4,966
Bell Atlantic Network Funding Corp.
5.435%, 01/29/97 5,000 4,979
Caisse Des Despots En Consign
5.463%, 01/03/97 5,000 4,998
Campbell Soup Co.
5.380%, 02/07/97 5,000 4,973
Canadian Imperial Bank of Commerce
5.369%, 01/28/97 5,000 4,980
5.462%, 02/19/97 5,000 4,963
Cit Group Holdings
5.387%, 02/28/97 5,000 4,957
Commonwealth Bank of Australia
5.397%, 01/16/97 5,000 4,989
Dupont & Co.
5.349%, 01/27/97 5,000 4,981
Ford Motor Credit Co.
5.611%, 01/02/97 5,000 4,999
5.529%, 02/25/97 5,000 4,959
5.451%, 03/28/97 5,000 4,936
2
<PAGE>
STATEMENT OF NET ASSETS (CONTINUED) COREFUND ELITE MONEY MARKET FUNDS
- --------------------------------------------------------------------------------
December 31, 1996 (Unaudited)
PAR VALUE
ELITE CASH RESERVE (000) (000)
- --------------------------------------------------------------------------------
General Electric Capital
5.354%, 01/15/97 $ 5,000 $ 4,990
General Electric Credit
5.582%, 03/10/97 5,000 4,949
Goldman Sachs Group
5.375%, 02/05/97 5,000 4,974
5.454%, 02/24/97 5,000 4,960
5.493%, 04/22/97 5,000 4,918
Heinz Co.
5.435%, 01/31/97 500 498
Merrill Lynch Co., Inc.
5.372%, 01/31/97 5,000 4,978
5.383%, 02/27/97 5,000 4,958
Met Life Funding
5.338%, 01/14/97 5,000 4,990
5.360%, 01/30/97 5,000 4,979
5.357%, 03/04/97 5,000 4,955
Minnesota Mining and Manufacturing
5.329%, 01/28/97 5,000 4,980
Mitsubishi International Co.
5.373%, 01/08/97 5,000 4,995
5.366%, 02/04/97 5,000 4,975
Morgan Stanley
5.420%, 02/11/97 5,000 4,969
5.377%, 02/13/97 5,000 4,968
Motorola Credit Corp.
5.306%, 01/24/97 5,000 4,983
National Australia Bank
5.377%, 02/03/97 5,000 4,976
National Rural Utilities
5.377%, 01/22/97 5,000 4,985
Pitney Bowes Credit
5.670%, 01/10/97 4,300 4,294
5.492%, 02/18/97 750 745
5.426%, 05/02/97 5,000 4,911
Procter & Gamble Co.
5.336%, 01/17/97 6,531 6,516
Province of British Columbia
5.351%, 01/09/97 5,000 4,994
3
<PAGE>
STATEMENT OF NET ASSETS (CONTINUED) COREFUND ELITE MONEY MARKET FUNDS
- --------------------------------------------------------------------------------
December 31, 1996 (Unaudited)
PAR VALUE
ELITE CASH RESERVE (000) (000)
- ------------------------------------------------------------------------
Province of Quebec
5.389%, 01/23/97 $ 5,000 $ 4,984
5.355%, 01/27/97 2,000 1,992
5.684%, 03/13/97 10,000 9,891
Prudential Funding Corp.
5.420%, 01/06/97 5,000 4,996
5.635%, 01/10/97 5,000 4,993
5.475%, 01/23/97 5,000 4,983
Southwestern Bell Capital
5.346%, 02/06/97 5,000 4,974
Southwestern Bell
5.374%, 02/12/97 6,000 5,963
Walt Disney Co.
5.372%, 02/10/97 5,000 4,971
5.425%, 03/27/97 5,000 4,938
Weyerhauser Co.
5.345%, 01/07/97 5,000 4,996
5.357%, 02/21/97 5,000 4,962
--------
TOTAL COMMERCIAL PAPER
(Cost $284,943) 284,943
- --------------------------------------------------------------------------------
U.S. GOVERNMENT AGENCY OBLIGATIONS - 10.7%
FHLB
6.000%, 09/24/97 5,000 5,018
5.810%, 11/04/97 5,000 5,000
FHLMC
5.385%, 02/26/97 10,000 9,916
FNMA
5.280%, 01/14/97 5,000 4,990
4.780%, 02/14/97 10,000 9,998
5.410%, 12/10/97(A) 5,000 4,998
--------
TOTAL U.S. GOVERNMENT AGENCY OBLIGATIONS
(Cost $39,920) 39,920
- --------------------------------------------------------------------------------
U.S. TREASURY OBLIGATIONS - 0.2%
U.S. Treasury Bill+
5.070%, 03/06/97 650 644
--------
TOTAL U.S. TREASURY OBLIGATIONS
(Cost $644) 644
- --------------------------------------------------------------------------------
4
<PAGE>
STATEMENT OF NET ASSETS (CONTINUED) COREFUND ELITE MONEY MARKET FUNDS
- --------------------------------------------------------------------------------
December 31, 1996 (Unaudited)
PAR VALUE
ELITE CASH RESERVE (000) (000)
- --------------------------------------------------------------------------------
ASSET BACKED SECURITIES - 0.9%
Capital Equipment Receivables Trust,
Series 1996-1, Class A1
5.600%, 10/15/97 $ 3,552 $ 3,553
-------
TOTAL ASSET BACKED SECURIIES
(Cost $3,553) 3,553
- --------------------------------------------------------------------------------
CORPORATE OBLIGATIONS - 4.7%
American Express Centurion (A)
5.568%, 01/10/97 5,000 5,000
Associates Corporation of North America
7.750%, 11/01/97 2,200 2,236
E.I. DuPont de Nemours
8.650%, 12/01/97 5,000 5,134
Toyota Motor Credit (A)
4.930%, 01/02/97 5,000 5,000
-------
TOTAL CORPORATE OBLIGATIONS
(Cost $17,370) 17,370
- --------------------------------------------------------------------------------
MASTER NOTES - 0.0%
Associates Corporation of North America
5.234%, 11/01/97 30 31
-------
TOTAL MASTER NOTES
(Cost $31) 31
- --------------------------------------------------------------------------------
TIME DEPOSITS - 2.7%
Sumitomo Bank
9.000%, 01/02/97 10,000 10,000
-------
TOTAL TIME DEPOSITS
(Cost $10,000) 10,000
- --------------------------------------------------------------------------------
CERTIFICATES OF DEPOSIT - 1.3%
Banque Nationale de Paris
5.370%, 02/12/97 5,000 5,000
-------
TOTAL CERTIFICATES OF DEPOSIT
(Cost $5,000) 5,000
- --------------------------------------------------------------------------------
5
<PAGE>
STATEMENT OF NET ASSETS (CONCLUDED) COREFUND ELITE MONEY MARKET FUNDS
- --------------------------------------------------------------------------------
December 31, 1996 (Unaudited)
PAR VALUE
ELITE CASH RESERVE (000) (000)
- --------------------------------------------------------------------------------
REPURCHASE AGREEMENT - 3.4%
Aubrey Lanston
5.750%, dated 12/31/96, matures
01/02/97, repurchase price
$12,503,993 (Collateralized by
U.S. Treasury Note, par value
$12,500,000, 5.875%, 11/30/01;
market value $12,647,124) $12,500 $ 12,500
--------
TOTAL REPURCHASE AGREEMENT
(Cost $12,500) 12,500
- --------------------------------------------------------------------------------
TOTAL INVESTMENTS - 100.4%
(Cost $373,961) 373,961
- --------------------------------------------------------------------------------
OTHER ASSETS AND LIABILITIES, NET - (0.4%) (1,332)
- --------------------------------------------------------------------------------
NET ASSETS:
Portfolio Shares ($0.001 par value -- 750
million authorized) based on
372,629,442 outstanding shares 372,629
- --------------------------------------------------------------------------------
TOTAL NET ASSETS - 100.0% $372,629
- --------------------------------------------------------------------------------
NET ASSET VALUE, OFFERING AND
REDEMPTION PRICE PER SHARE $ 1.00
- --------------------------------------------------------------------------------
+ EFFECTIVE YIELD
(A) VARIABLE RATE SECURITY -- THE RATE REFLECTED ON THE STATEMENT OF NET ASSETS
IS THE RATE IN EFFECT ON DECEMBER 31, 1996.
FHLB -- FEDERAL HOME LOAN BANK
FHLMC -- FEDERAL HOME LOAN MORTGAGE CORPORATION
FNMA -- FEDERAL NATIONAL MORTGAGE ASSOCIATION
See accompanying notes to financial statements.
6
<PAGE>
STATEMENT OF OPERATIONS (000) COREFUND ELITE MONEY MARKET FUNDS
- --------------------------------------------------------------------------------
For the six month period ended December 31, 1996 (Unaudited)
ELITE CASH RESERVE*
- ---------------------------------------------------------------------------
INVESTMENT INCOME:
Interest $10,457
-------
EXPENSES:
Investment advisory fees 385
Less investment advisory fees waived (385)
Administrative fees 482
Less administrative fees waived (270)
Transfer agent fees & expenses 45
Professional fees 22
Registration & filing fees 12
Printing 15
Miscellaneous 7
-------
Total expenses 313
-------
NET INVESTMENT INCOME 10,144
-------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $10,144
=======
* THIS FUND WAS FORMERLY KNOWN AS THE FIDUCIARY CASH RESERVE.
See accompanying notes to financial statements.
7
<PAGE>
STATEMENT OF CHANGES IN NET ASSETS (000) COREFUND ELITE MONEY MARKET FUNDS
- -------------------------------------------------------------------------------
For the six month period ended December 31, 1996 (Unaudited) and the year ended
June 30, 1996
<TABLE>
<CAPTION>
ELITE CASH RESERVE*
- -----------------------------------------------------------------------------------------
07/01/96 07/01/95
TO 12/31/96 TO 06/30/96
----------- -----------
<S> <C> <C>
OPERATIONS:
Net investment income $10,144 $ 21,639
-------- --------
Net increase in net assets resulting
from operations 10,144 21,639
-------- --------
DIVIDENDS DISTRIBUTED FROM:
Net investment income (10,144) (21,639)
-------- --------
CAPITAL SHARE TRANSACTIONS:
Proceeds from shares issued 335,551 596,669
Cost of shares redeemed (347,368) (618,820)
-------- --------
Decrease in net assets derived from capital
share transactions (11,817) (22,151)
-------- --------
NET DECREASE IN NET ASSETS: (11,817) (22,151)
NET ASSETS:
Beginning of period 384,446 406,597
-------- --------
End of period $372,629 $384,446
======== ========
SHARES ISSUED AND REDEEMED:
Shares issued 335,551 596,669
Shares redeemed (347,368) (618,820)
-------- --------
Decrease in net shares derived from capital
share transactions (11,817) (22,151)
-------- --------
OUTSTANDING SHARES:
Beginning of period 384,446 406,597
-------- --------
End of period 372,629 384,446
======== ========
<FN>
* THIS FUND WAS FORMERLY KNOWN AS THE FIDUCIARY CASH RESERVE.
</FN>
</TABLE>
See accompanying notes to financial statements.
8
<PAGE>
FINANCIAL HIGHLIGHTS COREFUND ELITE MONEY MARKET FUNDS
- --------------------------------------------------------------------------------
December 31, 1996 (Unaudited)
ELITE CASH RESERVE+
- -------------------------------------------------------------------------------
For a Share Outstanding Throughout the Period
<TABLE>
<CAPTION>
NET NET RATIO
ASSET DISTRIBUTIONS NET ASSETS RATIO OF NET
VALUE NET FROM NET ASSET VALUE END OF EXPENSES INCOME
BEGINNING INVESTMENT INVESTMENT END TOTAL OF PERIOD TO AVERAGE TO AVERAGE
OF PERIOD INCOME INCOME OF PERIOD RETURN (000) NET ASSETS NET ASSETS
--------- ---------- ------------- ----------- ------ --------- ----------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
For the six month
period ended
December 31, 1996** $1.00 0.03 (0.03) $1.00 2.68%* $372,629 0.16% 5.25%
For the year ended
June 30, 1996 $1.00 0.05 (0.05) $1.00 5.62% $384,446 0.15% 5.46%
For the year ended
June 30, 1995 $1.00 0.05 (0.05) $1.00 5.46% $406,597 0.17% 5.35%
For the year ended
June 30, 1994 $1.00 0.03 (0.03) $1.00 3.31% $382,814 0.16% 3.24%
For the year ended
June 30, 1993 $1.00 0.03 (0.03) $1.00 3.29% $424,363 0.17% 3.25%
For the year ended
June 30, 1992 $1.00 0.05 (0.05) $1.00 5.04% $416,945 0.18% 4.96%
For the year ended
June 30, 1991 $1.00 0.07 (0.07) $1.00 7.49% $453,947 0.15% 7.05%
For the period ended
June 30, 1990 (1) $1.00 0.08 (0.08) $1.00 8.03%* $232,091 0.13% 8.42%
</TABLE>
<TABLE>
<CAPTION>
RATIO RATIO OF
OF EXPENSES NET INCOME
TO AVERAGE TO AVERAGE
NET ASSETS NET ASSETS
(EXCLUDING (EXCLUDING
WAIVERS) WAIVERS)
----------- ----------
<S> <C> <C>
For the six month
period ended
December 31, 1996** 0.50% 4.91%
For the year ended
June 30, 1996 0.76% 4.85%
For the year ended
June 30, 1995 0.81% 4.71%
For the year ended
June 30, 1994 0.84% 2.56%
For the year ended
June 30, 1993 0.81% 2.61%
For the year ended
June 30, 1992 0.83% 4.31%
For the year ended
June 30, 1991 0.80% 6.40%
For the period ended
June 30, 1990 (1) 0.83% 7.72%
- -------
<FN>
* RETURN IS FOR THE PERIOD INDICATED AND HAS NOT BEEN ANNUALIZED.
** RATIOS FOR THE SIX MONTH PERIOD ENDED DECEMBER 31, 1996 HAVE 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 CASH RESERVE.
</FN>
</TABLE>
See accompanying notes to financial statements.
9
<PAGE>
NOTES TO FINANCIAL STATEMENTS COREFUND ELITE MONEY MARKET FUNDS
- --------------------------------------------------------------------------------
December 31, 1996 (Unaudited)
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:
Growth Equity Fund Cash Reserve
Core Equity Fund Treasury Reserve
Equity Index Fund Tax-Free Reserve
International Growth Fund Elite Cash Reserve
Balanced Fund Elite Treasury Reserve
Special Equity Fund Elite Tax-Free Reserve
FIXED INCOME FUNDS:
Short-Term Income
Government Income Fund
Short-Intermediate Bond Fund
Intermediate Municipal Bond Fund
Bond Fund
Global Bond Fund
Pennsylvania Municipal Bond Fund
New Jersey Municipal Bond Fund
The financial statements included herein present only those of the 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.
10
<PAGE>
NOTES TO FINANCIAL STATEMENTS (CONTINUED) COREFUND ELITE MONEY MARKET FUNDS
- --------------------------------------------------------------------------------
December 31, 1996 (Unaudited)
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 period ended December 31, 1996, CoreStates Advisers earned
$385,431 in investment advisory fees, all of which 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.
11
<PAGE>
NOTES TO FINANCIAL STATEMENTS (CONCLUDED) COREFUND ELITE MONEY MARKET FUNDS
- --------------------------------------------------------------------------------
December 31, 1996 (Unaudited)
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 period ended December 31, 1996, administrative fees
totaled $481,788 of which $269,524 was voluntarily waived in order to assist the
Fund in maintaining a competitive expense ratio.
Effective for the period July 1, 1995 to November 16, 1995, SEI Financial
Management Corporation acted as the Transfer Agent of the Fund. Pursuant to a
transfer agency agreement dated November 16, 1995, Boston Financial Data
Services ("BFDS") a subsidiary of State Street Bank and Trust Company acts as
the Fund's Transfer Agent. As such, BFDS provides transfer agency, dividend
disbursing, shareholder servicing and administrative services for the Fund.
On November 2, 1992, SEI Financial Services Company ("SFS"), also a wholly-owned
subsidiary of SEI Corporation, became the Fund's exclusive Distributor pursuant
to a distribution agreement dated October 30, 1992.
Certain officers of the Company are also officers of the Administrator. Such
officers are not paid fees by the Fund.
The Fund has paid legal fees to a law firm in which the secretary of the Company
is a partner.
12
<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-059-01
<PAGE>
CoreFunds, Inc.
---------------
ELITE TAX-FREE RESERVE
SEMI-ANNUAL REPORT
December 31, 1996
<PAGE>
MANAGERS' DISCUSSION OF FUND PERFORMANCE COREFUND ELITE MONEY MARKET FUNDS
- --------------------------------------------------------------------------------
SEMI-ANNUAL RESULTS:
(BULLET) This Fund returned 1.69% for the six-month period ended December
31, 1996.
(BULLET) The Fund's benchmark, the IBC Donoghue Tax-Free Average, returned
1.49% for the same period.
(BULLET) The assets in the Fund as of December 31, 1996 totaled $115
million.
COMMENTARY:
The average weighted maturity of the CoreFund Elite Tax-Free Reserve was
changed from 46 days to 58 days during the six months. The Fund's one year
effective yield was 3.07%. Towards the end of the year, the average maturity was
reduced to 47 days as a defensive posture against possible significant year-end
outflows.
The Fund was extended cautiously and selectively throughout the period.
There was much debate over expectations for short-term interest rates and the
viability of the U.S. economy. Market participants interpreted economic data
piece-meal. During the third quarter, yields on one-year notes fluctuated and
reached a high of 4% in late August. They then steadily declined throughout the
fourth quarter.
We continue to watch economic indicators that are directly related to
inflation. Specifically, retail sales, manufacturing capacity utilization,
employment reports, and average hourly earnings. We feel that these are the
indicators being closely watched by the Federal Reserve Board. If these
indicators continue to move along the same trend as recent months, we see no
action being taken by the Federal Reserve Board during the first quarter of
1997.
1
<PAGE>
STATEMENT OF NET ASSETS COREFUND ELITE MONEY MARKET FUNDS
- --------------------------------------------------------------------------------
December 31, 1996 (Unaudited)
<TABLE>
<CAPTION>
PAR VALUE
ELITE TAX-FREE RESERVE (000) (000)
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
MUNICIPAL BONDS - 99.1%
ALABAMA - 3.4%
Montgomery, Alabama TECP
3.600%, 01/29/97 ...................................................... $ 990 $ 990
Stevenson, Alabama, Industrial Development Authority
Environmental Improvement for Mead Project,
Series D (A) (B) (C)
4.950%, 01/02/97 ...................................................... 500 500
Winfield, Alabama Industrial Development Authority
Revenue Bond for Union Underwear Project (A) (B) (C)
4.300%, 01/07/97 ...................................................... 2,400 2,400
--------
Total Alabama 3,890
--------
ALASKA - 5.2%
Valdez, Alaska TECP
3.500%, 02/25/97 ...................................................... 3,325 3,325
3.450%, 03/28/97 ...................................................... 1,100 1,100
Valdez, Alaska Marine Term Revenue Bond for Exxon
Pipeline Company Project (A) (B)
4.900%, 01/02/97 ...................................................... 1,500 1,500
--------
Total Alaska 5,925
--------
ARIZONA - 2.5%
Arizona Agriculture Improvement and Power District
Electric Revenue Bond for Salt River Project, Series E (A) (B)
8.250%, 01/01/98 ...................................................... 2,710 2,834
--------
CALIFORNIA - 1.9%
Sonoma County, California TRAN
4.500%, 01/29/98 ...................................................... 2,200 2,221
--------
COLORADO - 1.2%
Moffat County, Colorado Pollution Control Revenue Bond (A) (B)
4.100%, 01/07/97 ...................................................... 1,400 1,400
--------
DELAWARE - 1.2%
New Castle County, Delaware GO
3.850%, 04/01/97 ...................................................... 615 615
Wilmington, Delaware Hospital Revenue Bond for
Franciscan Health Systems Project, Series A (A) (B) (C)
4.950%, 01/02/97 ...................................................... 800 800
--------
Total Delaware 1,415
--------
</TABLE>
2
<PAGE>
STATEMENT OF NET ASSETS (CONTINUED) COREFUND ELITE MONEY MARKET FUNDS
- --------------------------------------------------------------------------------
December 31, 1996 (Unaudited)
<TABLE>
<CAPTION>
PAR VALUE
ELITE TAX-FREE RESERVE (000) (000)
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
FLORIDA - 6.3%
Dade County, Florida Fixed Capital Asset Acquisition
Revenue Bond, Series 1990 (A) (B) (C)
4.450%, 01/07/97 ...................................................... $1,200 $ 1,200
Florida Municipal Power TECP
3.500%, 02/27/97 ...................................................... 1,520 1,520
Florida State Housing Finance Agency Revenue
Bond for Carlton Project, Series EEE (A) (B) (C)
4.150%, 01/07/97 ...................................................... 1,020 1,020
Florida State Housing Finance Agency Revenue Bond
for Huntington Project (A) (B) (C)
3.950%, 01/07/97 ...................................................... 200 200
Orange County, Florida Industrial Development
Authority Revenue Bond for Orlando
International Project (A) (B) (C)
3.950%, 01/07/97 ...................................................... 300 300
Sunshine State Florida TECP
3.700%, 01/08/97 ...................................................... 1,000 1,000
3.700%, 01/16/97 ...................................................... 2,000 2,000
--------
Total Florida 7,240
--------
GEORGIA - 1.5%
Georgia Municipal Electric Authority
Revenue Bond, Series B (A) (B)
8.000%, 01/01/98 ...................................................... 1,000 1,062
Hapeville, Georgia Industrial Development Authority
Revenue Bond for Hapeville Hotel Project (A) (B) (C)
5.000%, 01/02/97 ...................................................... 600 600
--------
Total Georgia 1,662
--------
ILLINOIS - 0.8%
Chicago, Illinois O'Hare Airport Revenue Bond (A) (B) (C)
4.150%, 01/07/97 ...................................................... 400 400
Illinois Development Financial Authority Pollution Control
Revenue Bond for Amoco Oil Company Project (A) (B)
4.900%, 01/07/97 ...................................................... 300 300
Lisle, Illinois Housing Authority Revenue Bond for
Ashley of Lisle Project (A) (B) (C)
4.000%, 01/07/97 ...................................................... 200 200
--------
Total Illinois 900
--------
</TABLE>
3
<PAGE>
STATEMENT OF NET ASSETS (CONTINUED) COREFUND ELITE MONEY MARKET FUNDS
- --------------------------------------------------------------------------------
December 31, 1996 (Unaudited)
<TABLE>
<CAPTION>
PAR VALUE
ELITE TAX-FREE RESERVE (000) (000)
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
INDIANA - 5.3%
Gary, Indiana Environmental Improvement Revenue
Bond for U.S. Steel Project (A) (B) (C)
3.700%, 01/15/97 ...................................................... $ 700 $ 700
Mt. Vernon, Indiana TECP
3.600%, 02/10/97 ...................................................... 735 735
Sullivan, Indiana TECP
3.700%, 01/02/97 ...................................................... 950 950
3.700%, 02/07/97 ...................................................... 500 500
3.650%, 02/10/97 ...................................................... 300 300
3.400%, 03/10/97 ...................................................... 800 800
3.450%, 04/15/97 ...................................................... 1,100 1,100
3.500%, 04/15/97 ...................................................... 1,000 1,000
--------
Total Indiana 6,085
--------
KANSAS - 2.0%
City of Burlington, Kansas TECP
3.600%, 01/22/97 ...................................................... 400 400
3.600%, 02/25/97 ...................................................... 1,500 1,500
Kansas City, Kansas Industrial Development Revenue
Bond for PQ Corporation Project (A) (B) (C)
5.050%, 01/07/97 ...................................................... 100 100
Wichita, Kansas Health Facilities Revenue Bond for
Wichita Health Systems Project, Series XXV (A) (B) (C)
4.300%, 01/07/97 ...................................................... 300 300
--------
Total Kansas 2,300
--------
KENTUCKY - 2.6%
Pendelton, Kentucky TECP
3.650%, 01/14/97 ...................................................... 3,000 3,000
--------
LOUISIANA - 3.7%
East Baton Rouge, Louisiana Pollution Control
Revenue Bond (A) (B) (C)
5.000%, 01/02/97 ...................................................... 800 800
Lake Charles, Louisiana District Port Facility
Revenue Bond for Conoco Project (A) (B)
4.950%, 01/02/97 ...................................................... 1,800 1,800
Louisiana State Public Facilities Authority Revenue Bond
for Kenner Hotel Project (A) (B) (C)
5.000%, 01/02/97 ...................................................... 600 600
</TABLE>
4
<PAGE>
STATEMENT OF NET ASSETS (CONTINUED) COREFUND ELITE MONEY MARKET FUNDS
- --------------------------------------------------------------------------------
December 31, 1996 (Unaudited)
<TABLE>
<CAPTION>
PAR VALUE
ELITE TAX-FREE RESERVE (000) (000)
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Louisiana State Recovery District Sales Tax
Revenue Bond Pre-Refunded (FGIC)
3.900%, 01/02/97 ...................................................... $1,000 $ 1,001
--------
Total Louisiana 4,201
--------
MASSACHUSETTS - 1.1%
Massachusetts State, Series B, GO
4.800%, 12/01/97 ...................................................... 1,250 1,250
--------
MICHIGAN - 0.4%
Delta County, Michigan Environmental Improvement
Revenue Bond for Mead Escambia Paper Project,
Series C (A) (B) (C)
5.000%, 01/02/97 ...................................................... 500 500
--------
MISSISSIPPI - 0.9%
Claiborne County, Mississippi TECP
3.600%, 03/10/97 ...................................................... 1,000 1,000
--------
MISSOURI - 0.2%
Missouri State Health and Educational Facilities
Authority Revenue Bond for Washington University,
Series A (A)
4.950%, 01/02/97 ...................................................... 200 200
--------
MONTANA - 2.6%
Forsyth, Montana Pollution Control Revenue Bond for
Portland General Electric Project (A) (B) (C)
4.150%, 01/07/97 ...................................................... 1,000 1,000
Forsyth, Montana Pollution Control Revenue Bond for
Portland General Electric Project, Series A (A) (B) (C)
4.050%, 01/07/97 ...................................................... 2,000 2,000
--------
Total Montana 3,000
--------
NEVADA - 1.9%
Nevada State Housing Authority Revenue Bond for Multi-Unit
Park Project, Series A (A) (B) (C)
4.300%, 01/07/97 ...................................................... 2,200 2,200
--------
NEW HAMPSHIRE - 0.5%
New Hampshire State Industrial Development
Revenue Bond for Oerlikon-Burlhe Project (A) (B) (C)
3.650%, 01/02/97 ...................................................... 600 600
--------
</TABLE>
5
<PAGE>
STATEMENT OF NET ASSETS (CONTINUED) COREFUND ELITE MONEY MARKET FUNDS
- --------------------------------------------------------------------------------
December 31, 1996 (Unaudited)
<TABLE>
<CAPTION>
PAR VALUE
ELITE TAX-FREE RESERVE (000) (000)
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
NEW YORK - 2.4%
New York City, New York GO (A) (B) (C)
4.500%, 08/15/22 ...................................................... $ 200 $ 200
New York City, New York TECP
3.550%, 02/12/97 ...................................................... 1,000 1,000
New York State Energy Research and Development Authority
Pollution Control Revenue Bond (C)
3.600%, 12/01/97 ...................................................... 1,500 1,500
--------
Total New York 2,700
--------
NORTH CAROLINA - 2.7%
North Carolina Eastern Municipal Power Agency
Revenue Bond, Series A
7.500%, 01/01/15 ...................................................... 3,060 3,121
--------
OHIO - 2.4%
Evandale, Ohio Industrial Development Authority
Revenue Bond (A) (B) (C)
4.600%, 01/07/97 ...................................................... 1,600 1,600
Ohio State Air Quality Revenue Bond (A) (B) (C)
4.850%, 01/02/97 ...................................................... 100 100
Ohio State Air Quality Revenue Bond, Series B (A) (B) (C)
4.700%, 01/02/97 ...................................................... 1,000 1,000
--------
Total Ohio 2,700
--------
OREGON - 3.9%
Port of Portland, Oregon Pollution Control
Revenue Bond for Reynold Metals Project (A) (B) (C)
4.950%, 01/02/97 ...................................................... 1,500 1,500
Port of St. Helens, Oregon Pollution Control
Revenue Bond (A) (B) (C)
4.950%, 01/02/97 ...................................................... 2,300 2,300
Umatilla County, Oregon Franciscan Health System
Revenue Bond, Series A (A) (B) (C)
4.950%, 01/02/97 ...................................................... 300 300
Umatilla County, Oregon Franciscan Health System
Revenue Bond, Series B (A) (B) (C)
4.950%, 01/02/97 ...................................................... 400 400
--------
Total Oregon 4,500
--------
</TABLE>
6
<PAGE>
STATEMENT OF NET ASSETS (CONTINUED) COREFUND ELITE MONEY MARKET FUNDS
- --------------------------------------------------------------------------------
December 31, 1996 (Unaudited)
<TABLE>
<CAPTION>
PAR VALUE
ELITE TAX-FREE RESERVE (000) (000)
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
PENNSYLVANIA - 19.2%
Allegheny County, Pennsylvania Revenue Bond for
Presbyterian University Hospital (A) (B)
3.900%, 01/02/97 ...................................................... $2,335 $ 2,335
Beaver County, Pennsylvania Industrial Development
Authority Revenue Bond for Duquesne Light Company
Project, Series A (A) (B) (C)
4.100%, 01/07/97 ...................................................... 1,000 1,000
Beaver County, Pennsylvania Industrial Development
Authority Revenue Bond for Duquesne Light Company
Project, Series B (A) (B) (C)
4.100%, 01/07/97 ...................................................... 1,100 1,100
Lancaster, Pennsylvania School District GO (FGIC)
3.800%, 05/01/97 ...................................................... 800 800
Lehigh County, Pennsylvania Industrial Development
Authority Revenue Bond for Allegheny Electric Project,
Series A (A) (B) (C)
4.600%, 01/07/97 ...................................................... 500 500
Montgomery County, Pennsylvania TECP
3.500%, 03/07/97 ...................................................... 3,000 3,000
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)
5.000%, 01/02/97 ...................................................... 800 800
Pennsylvania State University GO
4.250%, 04/04/97 ...................................................... 2,000 2,004
Pennsylvania State University Revenue Bond, Series A
4.500%, 11/25/97 ...................................................... 1,750 1,763
Washington County, Pennsylvania Industrial Development
Authority Revenue Bond for Werrerau Finance Company
Project (A) (B) (C)
4.100%, 01/07/97 ...................................................... 2,500 2,500
Washington County, Pennsylvania Lease
Revenue Bond (A) (B) (C)
4.150%, 01/07/97 ...................................................... 1,500 1,500
</TABLE>
7
<PAGE>
STATEMENT OF NET ASSETS (CONTINUED) COREFUND ELITE MONEY MARKET FUNDS
- --------------------------------------------------------------------------------
December 31, 1996 (Unaudited)
<TABLE>
<CAPTION>
PAR VALUE
ELITE TAX-FREE RESERVE (000) (000)
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
York, Pennsylvania General Authority Pooled
Revenue Bond (A) (B) (C)
4.150%, 01/07/97 ...................................................... $4,350 $ 4,350
--------
Total Pennsylvania 22,032
--------
PUERTO RICO - 1.6%
Puerto Rico Commonwealth TRAN, Series A
4.000%, 07/30/97 ...................................................... 1,800 1,806
--------
SOUTH CAROLINA - 0.4%
Berkley County, South Carolina Pollution Control
Revenue Bond for Amoco Chemical Project (A) (B) (C)
4.900%, 01/02/97 ...................................................... 500 500
--------
TENNESSEE - 1.0%
Sullivan County, Tennessee Industrial Development
Authority Pollution Control Revenue Bond for Mead Corporation
Project (A) (B) (C)
4.950%, 01/02/97 ...................................................... 1,100 1,100
--------
TEXAS - 10.0%
Austin, Texas TECP
3.700%, 01/06/97 ...................................................... 300 300
Grapevine, Texas Industrial Development Authority
Revenue Bond, Series B1 (A) (B) (C)
4.950%, 01/02/97 ...................................................... 1,800 1,800
Grapevine, Texas Industrial Development Authority
Revenue Bond for American Airlines Project,
Series A3 (A) (B) (C)
4.950%, 01/02/97 ...................................................... 700 700
Houston, Texas TRAN
4.500%, 06/30/97 ...................................................... 2,000 2,006
Nueces County, Texas Health Facilities Authority
Revenue Bond for Driscoll Children's Foundation
Project (A) (B) (C)
4.150%, 01/07/97 ...................................................... 600 600
Tarrant County, Texas Housing Finance Authority Revenue
Bond for Windcastle Project (A) (B) (C)
4.250%, 01/07/97 ...................................................... 1,034 1,034
</TABLE>
8
<PAGE>
STATEMENT OF NET ASSETS (CONTINUED) COREFUND ELITE MONEY MARKET FUNDS
- --------------------------------------------------------------------------------
December 31, 1996 (Unaudited)
<TABLE>
<CAPTION>
PAR VALUE
ELITE TAX-FREE RESERVE (000) (000)
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Texas State TRAN
4.750%, 08/29/97 ...................................................... $5,000 $ 5,025
--------
Total Texas 11,465
--------
VERMONT - 1.2%
Vermont State Student Loan Revenue Bond, Student Loan
Assistance Corporation Project (A) (B) (C)
3.650%, 01/02/97 ...................................................... 1,340 1,340
--------
VIRGINIA - 1.7%
Virginia State Peninsula Port Authority Revenue Bond for
Dominion Terminal Project, Series D (A)
4.950%, 01/02/97 ...................................................... 1,200 1,200
Virginia State Peninsula Port Authority Revenue Bond for
Dominion Terminal Project, Series 1987C (A) (B) (C)
4.850%, 01/02/97 ...................................................... 705 705
--------
Total Virginia 1,905
--------
WEST VIRGINIA - 1.1%
Putnam County, West Virginia Industrial Development
Authority Revenue Bond for FMC Corporation Project (A) (B) (C)
3.650%, 01/02/97 ...................................................... 1,300 1,300
--------
WISCONSIN - 1.8%
Milwaukee, Wisconsin, Revenue Anticipation Note, Series A
3.500%, 02/27/97 ...................................................... 2,000 2,002
--------
WYOMING - 4.5%
Gillette County, Wyoming TECP
3.450%, 03/06/97 ...................................................... 3,000 3,000
Lincoln County, Wyoming Pollution Control Revenue
Bond For Exxon Project, Series D
11/01/14 (A)
5.000%, 01/02/97 ...................................................... 300 300
Lincoln County, Wyoming Resource Recovery Revenue
Bond for Exxon Project, Series C (A) (B) (C)
5.000%, 01/02/97 ...................................................... 300 300
Platte County, Wyoming Pollution Control
Revenue Bond, Series A (A) (B) (C)
5.050%, 01/02/97 ...................................................... 500 500
</TABLE>
9
<PAGE>
STATEMENT OF NET ASSETS (CONCLUDED) COREFUND ELITE MONEY MARKET FUNDS
- --------------------------------------------------------------------------------
December 31, 1996 (Unaudited)
<TABLE>
<CAPTION>
PAR VALUE
ELITE TAX-FREE RESERVE (000) (000)
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Platte County, Wyoming Pollution Control
Revenue Bond, Series B (A) (B) (C)
5.050%, 01/02/97 ...................................................... $ 100 $ 100
Sublette County, Wyoming Pollution Control Revenue Bond
for Exxon Project, Series 84 (A) (B)
4.900%, 01/02/97 ...................................................... 1,000 1,000
--------
Total Wyoming 5,200
--------
TOTAL MUNICIPAL BONDS
(Cost $113,494) ......................................................................... 113,494
- -------------------------------------------------------------------------------------------------------------------
TOTAL INVESTMENTS - 99.1%
(Cost $113,494) ............................................................................ 113,494
- -------------------------------------------------------------------------------------------------------------------
OTHER ASSETS AND LIABILITIES, NET - 0.9% ...................................................... 1,041
- -------------------------------------------------------------------------------------------------------------------
NET ASSETS:
Portfolio Shares ($0.001 par value - 250 million authorized)
based on 114,564,660 outstanding shares .................................................. 114,565
Accumulated Net Realized Loss on Investments ............................................... (30)
- -------------------------------------------------------------------------------------------------------------------
TOTAL NET ASSETS - 100.0% ..................................................................... $114,535
- -------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, OFFERING AND REDEMPTION PRICE PER SHARE ...................................... $ 1.00
- -------------------------------------------------------------------------------------------------------------------
<FN>
(A) VARIABLE RATE SECURITY-THE RATE REFLECTED ON THE STATEMENT OF NET ASSETS IS
THE RATE IN EFFECT ON DECEMBER 31, 1996.
(B) PUT OR DEMAND FEATURES EXIST REQUIRING THE ISSUER TO REPURCHASE THE
INSTRUMENT PRIOR TO MATURITY. THE MATURITY DATE SHOWN IS THE LESSER OF THE
PUT DEMAND DATE OR MATURITY DATE.
(C) SECURITIES ARE HELD IN CONNECTION WITH A LETTER OF CREDIT ISSUED BY A MAJOR
COMMERCIAL BANK.
GO -- GENERAL OBLIGATION
TECP -- TAX-EXEMPT COMMERCIAL PAPER
TRAN -- TAX AND REVENUE ANTICIPATION NOTES
(FGIC) -- FINANCIAL GUARANTY INSURANCE COMPANY
</FN>
</TABLE>
See accompanying notes to financial statements.
10
<PAGE>
STATEMENT OF OPERATIONS (000) COREFUND ELITE MONEY MARKET FUNDS
- --------------------------------------------------------------------------------
For the six month period ended December 31, 1996 (Unaudited)
ELITE TAX-FREE RESERVE*
- --------------------------------------------------------------------------------
INVESTMENT INCOME:
Interest ................................................. $ 1,734
-------
EXPENSES:
Investment advisory fees .................................... 99
Less investment advisory fees waived ........................ (99)
Administrative fees ......................................... 123
Less administrative fees waived ............................. (69)
Transfer agent fees & expenses .............................. 10
Professional fees ........................................... 5
Registration & filing fees .................................. 6
Printing .................................................... 4
Miscellaneous ............................................... 6
-------
Total expenses .................................................... 85
-------
NET INVESTMENT INCOME ............................................. 1,649
-------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS .............. $ 1,649
=======
*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 ELITE MONEY MARKET FUNDS
- --------------------------------------------------------------------------------
For the six month period ended December 31, 1996 (Unaudited) and the year ended
June 30, 1996
<TABLE>
<CAPTION>
ELITE TAX-FREE RESERVE*
- ---------------------------------------------------------------------------------------------------------------------
07/01/96 07/01/95
TO 12/31/96 TO 06/30/96
-------------- --------------
<S> <C> <C>
OPERATIONS:
Net investment income ................................................. $ 1,649 $ 3,012
Net realized loss on securities sold .................................. -- (5)
-------- ---------
Net increase in net assets resulting
from operations .................................................... 1,649 3,007
-------- ---------
DIVIDENDS DISTRIBUTED FROM:
Net investment income ................................................. (1,649) (3,012)
-------- ---------
CAPITAL SHARE TRANSACTIONS:
Proceeds from shares issued ........................................... 98,790 224,591
Cost of shares redeemed ............................................... (70,732) (210,702)
-------- ---------
Increase in net assets derived from
capital share transactions ......................................... 28,058 13,889
-------- ---------
NET INCREASE IN NET ASSETS .................................................. 28,058 13,884
NET ASSETS:
Beginning of period ................................................... 86,477 72,593
-------- ---------
End of period ......................................................... $114,535 $ 86,477
======== =========
SHARES ISSUED AND REDEEMED:
Shares issued ......................................................... 98,790 224,591
Shares redeemed ....................................................... (70,732) (210,702)
-------- ---------
Increase in net shares derived from
capital share transactions ......................................... 28,058 13,889
-------- ---------
OUTSTANDING SHARES:
Beginning of period ................................................... 86,507 72,618
-------- ---------
End of period ......................................................... 114,565 86,507
======== =========
</TABLE>
*THIS FUND WAS FORMERLY KNOWN AS THE FIDUCIARY TAX-FREE RESERVE.
See accompanying notes to financial statements.
12
<PAGE>
FINANCIAL HIGHLIGHTS COREFUND ELITE MONEY MARKET FUNDS
- --------------------------------------------------------------------------------
December 31, 1996 (Unaudited)
<TABLE>
<CAPTION>
ELITE TAX-FREE RESERVE(DAGGER)
- ---------------------------------------------------------------------------------------------------------------------------
For a Share Outstanding Throughout the Period
NET NET
ASSET DISTRIBUTIONS NET ASSETS RATIO
VALUE NET FROM NET ASSET VALUE END OF EXPENSES
BEGINNING INVESTMENT INVESTMENT END TOTAL OF PERIOD TO AVERAGE
OF PERIOD INCOME INCOME OF PERIOD RETURN (000) NET ASSETS
---------- ---------- ------------- ----------- ---------- ---------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
For the six month
period ended
December 31, 1996** $1.00 0.02 (0.02) $1.00 1.69%* $114,535 0.17%
For the year ended
June 30, 1996 $1.00 0.03 (0.03) $1.00 3.51% $86,477 0.16%
For the year ended
June 30, 1995 $1.00 0.03 (0.03) $1.00 3.41% $72,593 0.19%
For the year ended
June 30, 1994 $1.00 0.02 (0.02) $1.00 2.32% $78,219 0.17%
For the year ended
June 30, 1993 $1.00 0.02 (0.02) $1.00 2.48% $48,424 0.19%
For the period ended
June 30, 1992 (1) $1.00 0.02 (0.02) $1.00 1.50%* $66,158 0.17%
</TABLE>
<TABLE>
<CAPTION>
RATIO RATIO OF
RATIO OF EXPENSES NET INCOME
OF NET TO AVERAGE TO AVERAGE
INCOME NET ASSETS NET ASSETS
TO AVERAGE (EXCLUDING (EXCLUDING
NET ASSETS WAIVERS) WAIVERS)
---------- ----------- ----------
<S> <C> <C> <C>
For the six month
period ended
December 31, 1996** 3.34% 0.51% 3.00%
For the year ended
June 30, 1996 3.44% 0.76% 2.84%
For the year ended
June 30, 1995 3.37% 0.83% 2.73%
For the year ended
June 30, 1994 2.29% 0.82% 1.64%
For the year ended
June 30, 1993 2.45% 0.83% 1.81%
For the period ended
June 30, 1992 (1) 3.00% 0.89% 2.28%
<FN>
- --------------------------
* RETURN IS FOR THE PERIOD INDICATED AND HAS NOT BEEN ANNUALIZED.
** RATES FOR THE SIX MONTH PERIOD ENDED DECEMBER 31, 1996 HAVE
BEEN ANNUALIZED.
(1) THE ELITE TAX-FREE RESERVE COMMENCED OPERATIONS ON NOVEMBER 19,
1991. RATIOS FOR THIS PERIOD HAVE BEEN ANNUALIZED.
(DAGGER) THIS FUND WAS FORMERLY KNOWN AS THE FIDUCIARY TAX-FREE RESERVE.
</FN>
</TABLE>
See accompanying notes to financial statements.
13
<PAGE>
NOTES TO FINANCIAL STATEMENTS COREFUND ELITE MONEY MARKET FUNDS
- --------------------------------------------------------------------------------
December 31, 1996 (Unaudited)
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:
Growth Equity Fund Cash Reserve
Core Equity Fund Treasury Reserve
Equity Index Fund Tax-Free Reserve
International Growth Fund Elite Cash Reserve
Balanced Fund Elite Treasury Reserve
Special Equity Fund Elite Tax-Free Reserve
FIXED INCOME FUNDS:
Short Term Income Fund
Government Income Fund
Short-Intermediate Bond Fund
Intermediate Municipal Bond Fund
Bond Fund
Global Bond Fund
Pennsylvania Municipal Bond Fund
New Jersey Municipal Bond Fund
The financial statements included herein present only those of the 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 ELITE MONEY MARKET FUNDS
- --------------------------------------------------------------------------------
December 31, 1996 (Unaudited)
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 period ended December 31, 1996, CoreStates Advisers earned
$98,605 in investment advisory fees, all of which 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 period ended December 31, 1996, administrative fees
totaled $123,277 of which $69,109 was voluntarily waived in order to assist the
Fund in maintaining a competitive expense ratio.
15
<PAGE>
NOTES TO FINANCIAL STATEMENTS (CONCLUDED) COREFUND ELITE MONEY MARKET FUNDS
- --------------------------------------------------------------------------------
December 31, 1996 (Unaudited)
Effective for the period July 1, 1995 to November 16, 1995, SEI Financial
Management Corporation acted as the Transfer Agent of the Fund. Pursuant to a
transfer agency agreement dated November 16, 1995, Boston Financial Data
Services ("BFDS") a subsidiary of State Street Bank and Trust Company acts as
the Fund's Transfer Agent. As such, BFDS provides transfer agency, dividend
disbursing, and shareholder servicing for the Fund.
On November 2, 1992, SEI Financial Services Company ("SFS"), also a wholly-owned
subsidiary of SEI Corporation, became the Fund's exclusive Distributor pursuant
to a distribution agreement dated October 30, 1992.
Certain officers of the Company are also officers of the Administrator. Such
officers are not paid fees by the Fund.
The Fund has paid legal fees to a law firm in which the secretary of the Company
is a partner.
5. INVESTMENT COMPOSITION
The Fund invests in securities which include revenue and general obligation
instruments.
At December 31,1996, the revenue sources by purpose were as follows:
% OF PORTFOLIO
INVESTMENTS
--------------
REVENUE INSTRUMENTS
Education Bonds .............................. 5%
Hospital & Health Care Bonds ................. 4
Housing Bonds ................................ 4
Industrial Bonds ............................. 10
Other Bonds .................................. 8
Pollution Control Bonds ...................... 13
Transportation Bonds ......................... 6
Utility Bonds ................................ 8
TAX EXEMPT COMMERCIAL PAPER ........................... 25
GENERAL OBLIGATIONS ................................... 5
TAX & REVENUE ANTICIPATION NOTES ...................... 12
----
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>
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-061-01
<PAGE>
CoreFunds, Inc.
---------------
ELITE TREASURY RESERVE
SEMI-ANNUAL REPORT
December 31, 1996
<PAGE>
MANAGERS' DISCUSSION OF FUND PERFORMANCE COREFUND ELITE MONEY MARKET FUNDS
- --------------------------------------------------------------------------------
SEMI-ANNUAL RESULTS:
(BULLET) This Fund returned 2.64%, net of expenses, for the six months
ending December 31, 1996.
(BULLET) The Fund's benchmark, the IBC Donoghue Treasury Fund Average,
returned 2.34% for the same period.
(BULLET) Assets in the Fund as of December 31, 1996 totaled $28 million.
COMMENTARY:
The average weighted maturity of the CoreFund Elite Treasury Reserve
changed from 60 days to 49 days during the six months. This eleven day decrease
in the average weighted maturity was mainly due to the lack of buying
opportunities and an increase in assets during the reporting period.
Treasury securities remained very expensive as investors flocked to the
short-term bill market. This flight to quality is not unusual when the market
lacks a clear sense of the economy's direction. The three-month treasury bill
area is considered a "safe haven" for investors and its demand helped keep
short-term bill yields down and prices up. The Fund significantly out-performed
its benchmark because longer-term purchases were limited and a higher percentage
of assets were kept in overnight repurchase agreements.
Going forward, purchases will continue to be made on market weakness. It is
our view that short-term rates will remain stable during the first quarter 1997,
unless inflationary indicators trend higher. As buying opportunities arise,
specific positions will be taken along the curve to maintain a laddered approach
strategy. The average weighted maturity will remain in the area of 50 to 55 days
until there is clear direction on the Federal Reserve Board's next move.
1
<PAGE>
STATEMENT OF NET ASSETS COREFUND ELITE MONEY MARKET FUNDS
- --------------------------------------------------------------------------------
December 31, 1996 (Unaudited)
PAR VALUE
ELITE TREASURY RESERVE (000) (000)
- --------------------------------------------------------------------------------
U.S. TREASURY OBLIGATIONS - 35.1%
U.S. Treasury Bills(DAGGER)
5.060%, 01/09/97 ................................ $ 500 $ 499
5.250%, 01/30/97 ................................ 500 498
5.120%, 02/06/97 ................................ 200 199
5.110%, 02/13/97 ................................ 700 696
5.070%, 02/20/97 ................................ 500 497
5.340%, 03/06/97 ................................ 500 495
5.250%, 03/13/97 ................................ 500 495
5.350%, 04/03/97 ................................ 500 493
5.115%, 04/10/97 ................................ 500 493
5.105%, 04/17/97 ................................ 500 493
5.075%, 05/08/97 ................................ 700 687
0.000%, 06/19/97 ................................ 500 488
5.620%, 06/26/97 ................................ 500 486
5.585%, 08/21/97 ................................ 500 482
5.235%, 11/13/97 ................................ 500 477
U.S. Treasury Notes
5.625%, 06/30/97 ................................ 500 500
5.500%, 07/31/97 ................................ 400 400
5.250%, 12/31/97 ................................ 500 499
U.S. Treasury STRIPS(DAGGER)
5.320%, 05/15/97 ................................ 500 490
5.250%, 08/15/97 ................................ 500 484
------
TOTAL U.S. TREASURY OBLIGATIONS
(Cost $9,851) ................................................ 9,851
- --------------------------------------------------------------------------------
REPURCHASE AGREEMENTS - 65.3%
Aubrey Lanston
5.750%, dated 12/31/96, matures 01/02/97,
repurchase price $109,035 (collateralized by U.S.
Treasury Note, par value $110,000, 5.875%,
11/30/01; market value $111,215) ................ 109 109
Aubrey Lanston
6.600%, dated 12/31/96, matures 01/02/97,
repurchase price $800,293 (collateralized by
U.S. Treasury Note, par value $790,000,
6.500%, 08/15/97; market value $813,700) ........ 800 800
2
<PAGE>
STATEMENT OF NET ASSETS (CONTINUED) COREFUND ELITE MONEY MARKET FUNDS
- --------------------------------------------------------------------------------
December 31, 1996 (Unaudited)
PAR VALUE
ELITE TREASURY RESERVE (000) (000)
- --------------------------------------------------------------------------------
Goldman Sachs
6.520%, dated 12/31/96, matures 01/02/97,
repurchase price $800,290 (collateralized by
U.S. Treasury Note, par value $820,000,
5.000%, 02/15/99; market value $814,916) ............. $ 800 $ 800
Hong Kong Shanghai Bank
6.625%, dated 12/31/96, matures 01/02/97,
repurchase price $800,294 (collateralized by
U.S. Treasury Note, par value $795,000,
5.875%, 07/31/97; market value $816,147) ............. 800 800
Merrill Lynch
6.000%, dated 12/31/96, matures 01/02/97,
repurchase price $800,267 (collateralized by U.S.
Treasury Note, par value $795,000, 5.875%,
07/31/97; market value $816,147) ..................... 800 800
Morgan Stanley
5.750%, dated 12/31/96, matures 01/02/97,
repurchase price $1,200,417 (collateralized by
U.S. Treasury Note, par value $1,170,000,
7.750%, 12/31/99; market value $1,224,747) ........... 1,200 1,200
Sanwa Bank
6.750%, dated 12/31/96, matures 01/02/97,
repurchase price $6,902,588 (collateralized by
U.S. Treasury Note, par value $6,980,000,
6.125%, 05/31/97; market value $7,031,652) ........... 6,900 6,900
Swiss Bank
6.750%, dated 12/31/96, matures 01/02/97,
repurchase price $6,902,587 (collateralized by
U.S. Treasury Note, par value $6,935,000,
5.750%, 09/30/97; market value $7,044,573) ........... 6,900 6,900
-------
TOTAL REPURCHASE AGREEMENTS
(Cost $18,309) .................................................... 18,309
- --------------------------------------------------------------------------------
TOTAL INVESTMENTS - 100.4%
(Cost $28,160)..................................................... 28,160
- --------------------------------------------------------------------------------
OTHER ASSETS AND LIABILITIES, NET - (0.4%)............................ (116)
- --------------------------------------------------------------------------------
3
<PAGE>
STATEMENT OF NET ASSETS (CONCLUDED) COREFUND ELITE MONEY MARKET FUNDS
- --------------------------------------------------------------------------------
December 31, 1996 (Unaudited)
VALUE
ELITE TREASURY RESERVE (000)
- --------------------------------------------------------------------------------
NET ASSETS:
Portfolio Shares ($0.001 par value - 250 million
authorized shares) based on 28,043,428 outstanding shares....... $28,043
Accumulated Net Realized Gain on Investments...................... 1
- --------------------------------------------------------------------------------
TOTAL NET ASSETS - 100.0%............................................ $28,044
- --------------------------------------------------------------------------------
NET ASSET VALUE, OFFERING AND REDEMPTION PRICE PER SHARE............. $1.00
- --------------------------------------------------------------------------------
(DAGGER) EFFECTIVE YIELD
STRIPS -- SEPARATELY TRADED REGISTERED INTEREST AND PRINCIPAL SECURITIES
See accompanying notes to financial statements.
4
<PAGE>
- --------------------------------------------------------------------------------
STATEMENT OF OPERATIONS (000) COREFUND ELITE MONEY MARKET FUNDS
- --------------------------------------------------------------------------------
For the six month period ended December 31, 1996 (Unaudited)
ELITE TREASURY RESERVE*
- --------------------------------------------------------------------------------
INVESTMENT INCOME:
Interest .................................................. $ 686
-----
EXPENSES:
Investment advisory fees ..................................... 26
Less investment advisory fees waived ......................... (26)
Administrative fees .......................................... 32
Less administrative fees waived .............................. (18)
Transfer agent fees & expenses ............................... 2
Professional fees ............................................ 2
Registration & filing fees ................................... 8
Printing ..................................................... 5
Miscellaneous ................................................ (8)
-----
Total expenses ..................................................... 23
-----
NET INVESTMENT INCOME............................................... 663
NET REALIZED GAIN ON INVESTMENTS:
Net realized gain from securities sold ....................... 1
-----
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS ............... $ 664
=====
* THIS FUND WAS FORMERLY KNOWN AS THE FIDUCIARY TREASURY RESERVE.
See accompanying notes to financial statements.
5
<PAGE>
STATEMENT OF CHANGES IN NET ASSETS (000) COREFUND ELITE MONEY MARKET FUNDS
- --------------------------------------------------------------------------------
For the six month period ended December 31, 1996 (Unaudited) and the year ended
June 30, 1996
ELITE TREASURY RESERVE*
- --------------------------------------------------------------------------------
07/01/96 07/01/95
TO 12/31/96 TO 06/30/96
----------- -----------
OPERATIONS:
Net investment income .......................... $ 663 $ 1,112
Net realized gain (loss) on securities sold .... 1 (1)
------- --------
Net increase in net assets resulting
from operations ............................. 664 1,111
------- --------
DIVIDENDS DISTRIBUTED FROM:
Net investment income .......................... (663) (1,112)
------- --------
CAPITAL SHARE TRANSACTIONS:
Proceeds from shares issued .................... 13,370 26,668
Cost of shares redeemed ........................ (9,825) (20,565)
------- --------
Increase in net assets derived from
capital share transactions .................. 3,545 6,103
------- --------
NET INCREASE IN NET ASSETS ........................... 3,546 6,102
NET ASSETS:
Beginning of period ............................ 24,498 18,396
------- --------
End of period .................................. $28,044 $ 24,498
======= ========
SHARES ISSUED AND REDEEMED:
Shares issued .................................. 13,370 26,668
Shares redeemed ................................ (9,825) (20,565)
------- --------
Increase in net shares derived from
capital share transactions .................. 3,545 6,103
------- --------
OUTSTANDING SHARES:
Beginning of period ............................ 24,498 18,395
------- --------
End of period .................................. 28,044 24,498
======= ========
* THIS FUND WAS FORMERLY KNOWN AS THE FIDUCIARY TREASURY RESERVE.
See accompanying notes to financial statements.
6
<PAGE>
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS COREFUND ELITE MONEY MARKET FUNDS
- --------------------------------------------------------------------------------
December 31, 1996 (Unaudited)
ELITE TREASURY RESERVE(DAGGER)
- --------------------------------------------------------------------------------
For a Share Outstanding Throughout the Period
<TABLE>
<CAPTION>
NET NET
ASSET DISTRIBUTIONS NET ASSETS
VALUE NET FROM NET ASSET VALUE END
BEGINNING INVESTMENT INVESTMENT END TOTAL OF PERIOD
OF PERIOD INCOME INCOME OF PERIOD RETURN (000)
--------- ---------- ------------- ----------- ------ ---------
<S> <C> <C> <C> <C> <C> <C>
For the six month
period ended
December 31, 1996** $1.00 0.03 (0.03) $1.00 2.64%* $28,044
For the year ended
June 30, 1996 $1.00 0.05 (0.05) $1.00 5.54% $24,498
For the year ended
June 30, 1995 $1.00 0.05 (0.05) $1.00 5.24% $18,396
For the year ended
June 30, 1994 $1.00 0.03 (0.03) $1.00 3.10% $20,363
For the year ended
June 30, 1993 $1.00 0.03 (0.03) $1.00 3.17% $27,614
For the period ended
June 30, 1992 (1) $1.00 0.02 (0.02) $1.00 2.00%* $49,328
</TABLE>
<TABLE>
<CAPTION>
RATIO RATIO OF
RATIO OF EXPENSES NET INCOME
RATIO OF NET TO AVERAGE TO AVERAGE
OF EXPENSES INCOME NET ASSETS NET ASSETS
TO AVERAGE TO AVERAGE (EXCLUDING (EXCLUDING
NET ASSETS NET ASSETS WAIVERS) WAIVERS)
----------- ---------- ----------- ----------
<S> <C> <C> <C> <C>
For the six month
period ended
December 31, 1996** 0.17% 5.18% 0.51% 4.84%
For the year ended
June 30, 1996 0.19% 5.39% 0.80% 4.78%
For the year ended
June 30, 1995 0.23% 5.09% 0.87% 4.45%
For the year ended
June 30, 1994 0.28% 3.03% 0.91% 2.40%
For the year ended
June 30, 1993 0.18% 3.19% 0.85% 2.52%
For the period ended
June 30, 1992 (1) 0.05% 3.95% 0.80% 3.20%
<FN>
- ---------------------------
* RETURN IS FOR THE PERIOD INDICATED AND HAS NOT BEEN ANNUALIZED.
** RATIOS FOR THE SIX MONTH PERIOD ENDED DECEMBER 31, 1996 HAVE BEEN ANNUALIZED.
(1) THE ELITE TREASURY RESERVE COMMENCED OPERATIONS ON DECEMBER 10, 1991.
RATIOS FOR THIS PERIOD HAVE BEEN ANNUALIZED.
(DAGGER) THIS FUND WAS FORMERLY KNOWN AS THE FIDUCIARY TREASURY RESERVE.
</FN>
</TABLE>
See accompanying notes to financial statements.
7
<PAGE>
NOTES TO FINANCIAL STATEMENTS COREFUND ELITE MONEY MARKET FUNDS
- --------------------------------------------------------------------------------
December 31, 1996 (Unaudited)
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:
Growth Equity Fund Cash Reserve
Core Equity Fund Treasury Reserve
Equity Index Fund Tax-Free Reserve
International Growth Fund Elite Cash Reserve
Balanced Fund Elite Treasury Reserve
Special Equity Fund Elite Tax-Free Reserve
FIXED INCOME FUNDS:
Short Term Income Fund
Government Income Fund
Short-Intermediate Bond Fund
Intermediate Municipal Bond Fund
Bond Fund
Global Bond Fund
Pennsylvania Municipal Bond Fund
New Jersey Municipal Bond Fund
The financial statements included herein present only those of the 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.
8
<PAGE>
NOTES TO FINANCIAL STATEMENTS (CONTINUED) COREFUND ELITE MONEY MARKET FUNDS
- --------------------------------------------------------------------------------
December 31, 1996 (Unaudited)
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 period ended December 31, 1996, CoreStates Advisers earned
$25,559 in investment advisory fees, all of which 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'
9
<PAGE>
NOTES TO FINANCIAL STATEMENTS (CONCLUDED) COREFUND ELITE MONEY MARKET FUNDS
- --------------------------------------------------------------------------------
December 31, 1996 (Unaudited)
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 Funds'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 period ended December 31, 1996, administrative fees
totaled $31,949 of which $17,892 was voluntarily waived in order to assist the
Fund in maintaining a competitive expense ratio.
Effective for the period July 1, 1995 to November 16, 1995, SEI Financial
Management Corporation acted as the Transfer Agent of the Fund. Pursuant to a
transfer agency agreement dated November 16, 1995, Boston Financial Data
Services ("BFDS") a subsidiary of State Street Bank and Trust Company acts as
the Fund's Transfer Agent. As such, BFDS provides transfer agency, dividend
disbursing, and shareholder servicing for the Fund.
On November 2, 1992, SEI Financial Services Company ("SFS"), also a wholly-owned
subsidiary of SEI Corporation, became the Fund's exclusive Distributor pursuant
to a distribution agreement dated October 30, 1992.
Certain officers of the Company are also officers of the Administrator. Such
officers are not paid fees by the Fund.
The Fund has paid legal fees to a law firm in which the secretary of the Company
is a partner.
10
<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-060-01
