[SQUARE BULLET]
COREFUND[REGISTERED MARK]
FAMILY OF MUTUAL FUNDS
- -------------------------
1997
SEMI-ANNUAL REPORT
TO OUR
SHAREHOLDERS
FOR SIX MONTHS ENDING
DECEMBER 31, 1997
[GRAPHIC OF POINTER]
COREFUNDS...INVESTING OUR EXPERIENCE IN YOUR FUTURE.
<PAGE>
COREFUND
PORTFOLIOS
BY
ASSET
CLASS [SQUARE BULLET] COREFUND
- --------------------------------------------------------------------------------
FUND TRADING SYMBOL
----------------------------------
(A/C SHARES) (Y SHARES)
EQUITY FUNDS-----------------------------------------------------------------
[SQUARE BULLET] Equity Index -- VEIFX
[SQUARE BULLET] Core Equity CVERX CVEAX
[SQUARE BULLET] Growth Equity CRQAX CRGEX
[SQUARE BULLET] Special Equity CSPAX CSEQX
[SQUARE BULLET] International Growth CROAX CFIGX
BALANCED FUNDS---------------------------------------------------------------
[SQUARE BULLET] Balanced COBAX CBAAX
FIXED INCOME FUNDS-----------------------------------------------------------
[SQUARE BULLET] Short Term Income -- COSTX
[SQUARE BULLET] Short-Intermediate Bond CSIAX CFBDX
[SQUARE BULLET] Government Income CRIAX CRYIX
[SQUARE BULLET] Bond CBOAX CONIX
[SQUARE BULLET] Global Bond CRGAX CGBIX
TAX-EXEMPT INCOME FUNDS------------------------------------------------------
[SQUARE BULLET] Intermediate Municipal Bond CRMAX CRMYX
[SQUARE BULLET] Pennsylvania Municipal Bond CPAAX CPAYX
[SQUARE BULLET] New Jersey Municipal Bond CNJAX CNJYX
MONEY MARKET FUNDS-----------------------------------------------------------
[SQUARE BULLET] Treasury Reserve CTRXX CRTXX
[SQUARE BULLET] Cash Reserve -- CRCXX
[SQUARE BULLET] Tax-Free Reserve CXCXX CRXXX
TABLE OF CONTENTS
---------------------------
MESSAGE TO OUR SHAREHOLDERS
1
INVESTING FOR THE LONG TERM
2
HOW TO USE YOUR
SEMI-ANNUAL REPORT
4
GLOSSARY OF TERMS
6
CHOOSING THE RIGHT FUNDS
8
FUND DESCRIPTIONS
10
INVESTMENT ADVISERS' REVIEW
14
MANAGERS' DISCUSSIONS OF
FUND PERFORMANCE
18
FINANCIAL STATEMENTS
47
[GRAPHIC OF POINTER]
SHAREHOLDER SERVICES
-------------------------------
FOR MORE INFORMATION ON OPENING
A NEW ACCOUNT, MAKING CHANGES TO
EXISTING ACCOUNTS, PURCHASING,
EXCHANGING OR REDEEMING SHARES,
OR OTHER INVESTOR SERVICES,
PLEASE CALL
1-800-355-CORE (2673) OR
REFER TO YOUR FUND PROSPECTUS.
<PAGE>
MESSAGE
TO OUR
SHAREHOLDERS [SQUARE BULLET] COREFUND
- --------------------------------------------------------------------------------
DECEMBER 31, 1997
CoreFund shareholders earned overall positive returns for the semi-annual
period ending December 31, 1997 in spite of pockets of market volatility. A
significant stock market decline in October, a correction in technology stock
prices, and turbulence in the Asian markets caused some bumps in the road.
However, with the exception of Asia, good, strong economic fundamentals
continued. Healthy economic growth in the U.S., low inflation, and declining
interest rates supported a stable economy, providing an encouraging outlook for
long-term investors.
MAXIMIZING OPPORTUNITIES Also during the six-month period, CoreFunds
introduced a new B Class of shares for seven Funds, which gives individual
investors the option of a contingent deferred sales charge rather than an
up-front sales charge. We also debuted our new Elite Money Market Funds. And, we
now offer a Systematic Exchange Plan, as well as weekly and overnight sweep
privileges from some checking accounts. These products are all designed to
increase shareholders' options and flexibility while providing fee efficiencies.
As always, CoreFund urges you to invest for the long term. Recent changes
in IRA tax legislation and the creation of the Roth IRA offer investors still
additional incentives for committing to a long-term investment plan. Investors
are realizing the value of staying with their strategy over the long haul.
OUR DUTY TO YOU Many of you have read about the proposed merger between
CoreStates and First Union. Your board will be considering the impact of the
transaction on the Funds and you may rest assured that we will be guided by the
best interests of CoreFund shareholders. Our number one job is to make sure that
your best interests are served. We thank you for your confidence.
[PHOTO OF EMIL MIKITY OMITTED]
/S/ SIGNATURE
EMIL J. MIKITY
CHAIRMAN
1
<PAGE>
INVESTING FOR THE
LONG TERM
- --------------------------------------------------------------------------------
A LITTLE BIT TODAY
CAN TAKE YOU
A LONG WAY.
[GRAPHIC OF POINTER]
Throughout this report, we talk about investing for the long term --
setting financial goals, choosing your funds, and then staying with your plan
over a period of years. Why is this important? Because long-term investing can
truly help you reach your financial goals.
Whether you're investing for your retirement, a child's education, a
vacation home, or some other goal, the key is to start early. This way, you can
actually reduce the total amount you will need to save. That's because your
money will work for you as it compounds over the years. The more time you have,
the more you will benefit from compounding.
In addition, when you stay with your plan over time, you can minimize
the impact of short-term fluctuations in the market. Historically, the longer an
investment is held, the less it is affected by market ups and downs.
Finally, by investing the same amount each month, you can reduce the
average cost you pay per share. Your money will buy more shares when the price
is low and fewer shares when the price is high. This is a proven technique for
obtaining the best possible price.
STOCKS HAVE OUTPERFORMED OVER THE LONG TERM.
HISTORICALLY, STOCKS HAVE EXPERIENCED GREATER SHORT-TERM VOLATILITY, BUT OVER
THE LONGER TERM, THEY HAVE OUTPERFORMED BONDS AND OTHER FIXED-INCOME
INVESTMENTS.
TIME CAN SMOOTH THE BUMPS ALONG THE WAY.
THE LONGER YOU HOLD YOUR INVESTMENT, THE LESS IT WILL BE IMPACTED BY SHORT-TERM
MARKET FLUCTUATIONS. THIS CHART ILLUSTRATES THE MAXIMUM AND MINIMUM RETURNS FOR
DIFFERENT INVESTMENT PERIODS. AN INVESTOR WITH A LONGER TIME HORIZON CAN AFFORD
TO ASSUME GREATER RISK IN EXCHANGE FOR POTENTIALLY GREATER LONG-TERM REWARDS.
REGULAR INVESTING IS A SIMPLE STRATEGY THAT WORKS OVER TIME.
THIS HYPOTHETICAL EXAMPLE ASSUMES MONTHLY INVESTMENTS OF $100, $300, AND $500,
RESPECTIVELY, GROWING AT A COMPOUNDED ANNUAL RATE OF RETURN OF 8%.
2
<PAGE>
Growth of $10,000 since 1973
[LINE GRAPH DEPICTING GROWTH OF $10,000 SINCE 1973]
SOURCE: SEI RESEARCH (S&P 500, IBBOTSON LONG TERM GOV'T BOND INDEX, IBBOTSON
30 DAY T-BILL INDEX). THIS ILLUSTRATION IS FOR HYPOTHETICAL PURPOSES ONLY AND
DOES NOT REPRESENT A PARTICULAR COREFUND. PAST PERFORMANCE IS NOT INDICATIVE
OF FUTURE RESULTS.
[BAR GRAPH DEPICTING REDUCTION OF RISK OVER TIME]
SOURCE: SEI RESEARCH (S&P 500, IBBOTSON INTERMEDIATE GOV'T BOND INDEX, IBBOTSON
30 DAY T-BILL INDEX). THIS ILLUSTRATION IS FOR HYPOTHETICAL PURPOSES ONLY AND
DOES NOT REPRESENT A PARTICULAR COREFUND. PAST PERFORMANCE IS NOT INDICATIVE
OF FUTURE RESULTS.
[CHART DEPICTING REGULAR INVESTING CAN HELP YOU REACH YOUR GOALS]
MONTHLY 10 15 20 25 30
INVESTMENT YEARS YEARS YEARS YEARS YEARS
$100 $18,012 $33,761 $56,900 $90,899 $140,855
$300 $54,037 $101,282 $170,700 $272,697 $422,565
$500 $90,062 $158,803 $284,500 $454,495 $704,275
SOURCE: SEI RESEARCH. THIS ILLUSTRATION IS FOR HYPOTHETICAL PURPOSES ONLY AND
DOES NOT REPRESENT A PARTICULAR COREFUND.
3
<PAGE>
HOW TO USE YOUR
SEMI-ANNUAL
REPORT
- --------------------------------------------------------------------------------
[GRAPHIC OF POINTER]
COREFUND SHARES ARE
CURRENTLY AVAILABLE IN
FOUR DIFFERENT CLASSES:
CLASS Y SHARES
ARE FOR INSTITUTIONAL INVESTORS.
CLASS A SHARES
ARE FRONT-END LOADED FUNDS
FOR INDIVIDUALS INVESTING IN EQUITY AND FIXED-INCOME FUNDS.
THEY OFFER A VARIETY OF SHAREHOLDER
SERVICING FEATURES, AS WELL AS
SOME ADDITIONAL FEES.
CLASS B SHARES
ARE FOR INDIVIDUAL INVESTORS,
OFFERING AN ALTERNATIVE
PRICING STRUCTURE FOR THE EQUITY CLASS A SHARES AND
MONEY MARKET CLASS C SHARES.
CLASS C SHARES
ARE FOR INDIVIDUALS INVESTING
IN MONEY MARKET FUNDS.
THEY OFFER A VARIETY OF SHAREHOLDER
SERVICING FEATURES, AS WELL AS
SOME ADDITIONAL FEES.
THE COREFUND 1997 SEMI-ANNUAL REPORT In the pages that follow, you will
read about your specific funds, the economic trends of the past year, and the
outlook going forward. But the most significant message of this 1997 Semi-Annual
Report has nothing to do with market conditions, new products, or economic
forecasts. Instead, we want to stress the importance of staying with your sound,
long-term investment plan through all economic cycles.
On pages two and three, we discuss the reasons why investing over a period of
many years can help you reduce the amount of money you will need to reach your
goal, and how long-term investing can limit the impact of short-term market
fluctuations on your investment. Don't underestimate the importance of starting
your investment program early and saving on a regular basis. Take a few minutes
and read this section. It may help you learn about new ways to reach your
financial goals.
Also in this Semi-Annual Report, you will find CoreStates Investment Advisers'
insights into current economic conditions and a global investment outlook. You
will find a Manager's Discussion of Fund Performance for each fund in the
CoreFund Family of Funds. Each manager's commentary presents a snapshot of fund
performance for the 6-month period ending December 31, 1997. The managers offer
you insights into the investment strategies they are employing and examine the
current climate of specific markets, as well as the market forces that are
expected to prevail into 1998.
WHAT
YOU NEED
TO KNOW
[SQUARE BOX]
4
<PAGE>
[SQUARE BULLET] COREFUND
- --------------------------------------------------------------------------------
QUICK FUND FACTS
Accompanying each commentary are boxes highlighting important fund
information:
[SQUARE BULLET] When a fund was opened
[SQUARE BULLET] Portfolio size
[SQUARE BULLET] Number of shares outstanding
[SQUARE BULLET] Average weighted maturity of a fund's fixed-income holdings
(where applicable)
[SQUARE BULLET] Seven-day effective yield (where applicable)
PORTFOLIO COMPOSITION
For funds with equity holdings, the individual reports include listings of
the top five holdings and the percentage of the total fund invested in these
holdings.
For funds with only fixed-income or money market holdings, the reports
include pie charts that show how these holdings are divided according to quality
ratings, or maturity.
PERFORMANCE DATA EQUITY AND FIXED-INCOME FUNDS
The performance box shows the six-month total return for the retail Class A
and B shares (shown with and without the sales charge) and the institutional
Class Y shares. Also, a bar chart shows each Fund's six-month total return and
30-day yield as compared with a commonly used industry index.
For the CoreFund Class A and B shares, the performance information has been
adjusted to reflect the 12b-1 fee associated with these shares. The data has
also been divided to show performance with and without the assessment of a sales
charge, also known as the load.
PERFORMANCE DATA MONEY MARKET FUNDS
The performance boxes show the six-month cumulative total return, 7-day and
30-day yields for each class as compared to the industry benchmark that the fund
manager uses to measure performance. Also, a bar chart shows each Fund's
six-month total return and 7-day yield compared with a commonly used industry
index.
UNDERSTANDING FUND PERFORMANCE
[SQUARE BULLET]
As you review the information in these fund reports, please remember that past
performance of the portfolios does not predict future results. Also, investment
return and principal value will fluctuate so that an investor's shares, when
redeemed, may be worth more or less than their original cost.
[GRAPHIC OF POINTER]
5
<PAGE>
GLOSSARY
OF TERMS
- --------------------------------------------------------------------------------
[GRAPHIC OF POINTER]
Various terms used in the fund reports are defined as follows:
CLASS Y, A, B & C CoreFund shares are currently offered in these classes. Class
Y shares are for institutional investors. Class A, B & C shares are for
individuals. Class A, B & C shares include added features such as shareholder
servicing and automatic and systematic investment plans, as well as some
additional fees. Class C shares also offer checkwriting privileges.
DISTRIBUTIONS are the payments of income and capital gains to shareholders of a
mutual fund. For tax purposes, capital gains distributions are calculated
separately from interest income or dividends.
DIVERSIFICATION is the spreading of investment risk by putting assets in a
wide-ranging portfolio of securities, such as a mutual fund.
DOLLAR-COST AVERAGING is an installment-purchase technique that involves
investing a fixed amount of money in mutual fund shares at regular intervals
rather than all at once. The objective is to buy fewer shares when prices are
high and more shares when prices are low.
EXPENSE RATIO is the amount, expressed as a percentage of average assets, that
shareholders paid in the past year for mutual fund operating expenses and
management fees.
FACE VALUE is the amount the bondholder receives when the bonds are redeemed at
maturity. Interest payments are based on the face value (also called "par
value").
HEDGE is a defensive investment strategy, often involving the buying or selling
of options, to offset possible losses and thereby to reduce risk.
INDEX is a statistical composite of selected stocks or bonds that is used to
measure price fluctuations in these markets. For example, Standard & Poor's 500
Composite Index (S&P 500) is a popular measure of the stock market's performance
based on prices of 500 common stocks listed on the New York and American stock
exchanges or traded over the counter.
6
<PAGE>
[SQUARE BULLET] COREFUND
- --------------------------------------------------------------------------------
LOAD refers to sales charges that may be associated with a particular fund.
Where loads are shown, both sales charges (incurred when purchasing shares) and
12b-1 fees have been included. The 12b-1 fee, named after the Securities and
Exchange Commission rule that permits it, is sometimes assessed to recover costs
incurred through advertising, commission payments to brokers, or other expenses
associated with marketing and distributing a fund. CoreFunds offer both
front-end loaded and back-end loaded funds.
MATURITY refers to the period over which a bond or other fixed income security
must be held to earn the full yield offered by the issuer of the security.
Average weighted maturity describes the average period of maturity in a
portfolio that contains fixed income securities of varying maturities.
NET ASSET VALUE (NAV) reflects the market value of one share of the fund on the
date listed. This figure is determined by taking the fund's total assets --
securities, cash, and any accrued earnings -- and then deducting liabilities and
dividing by the number of shares outstanding.
Money market funds seek to maintain a stable NAV of $1.00, although there
is no guarantee they will always do so. There are three money market portfolios
in the CoreFund Family of Mutual Funds: Cash Reserve, Treasury Reserve, and
Tax-Free Reserve.
SWEEP ACCOUNTS allow excess checking account balances to be invested regularly
in higher-yielding money market mutual fund accounts.
TOTAL RETURN shows how the value of an investment has changed from the beginning
to the end of a period, assuming that dividends and capital gains have been
reinvested. In the performance tables for equity and fixed income funds, total
return is shown on an "annualized" basis -- it assumes performance at a constant
rate for each year. In the performance boxes for money market funds, the
six-month total return is shown on a "cumulative" basis -- i.e., the total
return for the period from July 1, 1997 to December 31, 1997.
VOLATILITY is a description of how much the price of securities, such as mutual
funds, moves up or down within a given period.
YIELD refers to the rate of return for an investment portfolio, expressed as a
percentage. Yield for mutual funds is established by a formula set by the
Securities and Exchange Commission. A fund's yield will fluctuate and reflect
the portfolio's net earning power after fund expenses have been paid.
DEFINING THE TERMS
[SQUARE BULLET]
7
<PAGE>
CHOOSING
THE
RIGHT FUNDS
- --------------------------------------------------------------------------------
[GRAPHIC OF POINTER]
The CoreFund Family offers a diverse range of high-quality mutual fund
investment options designed to help you reach your financial goals.
These include: the capital appreciation potential of equity and
balanced funds, the income potential of fixed-income funds, the tax advantages
of municipal bond funds, the stability of money market funds, and the expanded
reach and potential of international funds. By allowing free exchange among all
funds, CoreFund makes it easy for you to adapt your individual investment
program to your changing needs.
THE RIGHT CHOICES FOR A WELL-ROUNDED INVESTMENT PLAN.
Each investor has a unique notion of what the "right" mix of risk and
reward should be. You may, for example, be an investor who seeks to maintain the
highest possible degree of stability in your portfolio, and therefore favor
money market securities. Or, you may be at the opposite end of the spectrum --
someone who is willing to accept and tolerate higher degrees of risk in exchange
for the potential of higher returns offered by stocks. Because higher returns
generally mean greater price fluctuations, investment decisions will always
revolve around this tradeoff.
FINDING THE RIGHT MIX OF RISK AND REWARD.
To help you align your portfolio's particular blend of stability and
return with your investment preferences, CoreFunds offers a broad array of
investment options.
DIVERSIFICATION
IS A WAY TO
MODERATE
YOUR RISK.
As illustrated at right, these funds fall into distinct categories that match
up with the various stages of the risk/return spectrum. By taking these factors
into consideration, you can fashion a well-rounded, diversified portfolio that
will help you achieve your individual investment goals while maintaining a
comfortable level of risk. In this way, CoreFunds' expertise and experience can
best be used to shape your investment future.
8
<PAGE>
[SQUARE BULLET] COREFUND
- --------------------------------------------------------------------------------
<TABLE>
MUTUAL FUND CATEGORIES
LOWER HIGHER
RETURN RETURN
<S> <C> <C> <C> <C>
INTERNATIONAL GROWTH [SQUARE BULLET] INTERNATIONAL GROWTH
INTERNATIONAL STOCK FUNDS
OFFER POTENTIALLY HIGHER
RETURNS, BUT CARRY SPECIAL
RISKS. THESE RISKS ARE
OUTLINED IN YOUR PROSPECTUS.
GROWTH [SQUARE BULLET] SPECIAL EQUITY
[SQUARE BULLET] GROWTH EQUITY
STOCK AND BALANCED FUNDS [SQUARE BULLET] CORE EQUITY
PURSUE LONG-TERM GROWTH. [SQUARE BULLET] EQUITY INDEX
THEY OFFER THE GREATEST GROWTH [SQUARE BULLET] BALANCED
POTENTIAL, BUT FLUCTUATE MORE
IN PRICE.
INTERNATIONAL INCOME [SQUARE BULLET] GLOBAL BOND
GLOBAL BOND FUNDS SEEK GROWTH AND
INCOME OFFERING POTENTIALLY HIGHER RETURNS
THAN DOMESTIC BONDS, BUT WITH LESS
STABILITY OF PRINCIPAL.
INCOME [SQUARE BULLET] BOND
[SQUARE BULLET] GOVERNMENT INCOME
INTERMEDIATE- AND LONG-TERM TAXABLE BOND [SQUARE BULLET] SHORT-INTERMEDIATE BOND
FUNDS SEEK A MODERATE-TO-HIGH LEVEL OF [SQUARE BULLET] SHORT TERM INCOME
INCOME AND PRESERVATION OF CAPITAL.
TAX-FREE INCOME [SQUARE BULLET] INTERMEDIATE MUNICIPAL BOND
[SQUARE BULLET] PENNSYLVANIA MUNICIPAL BOND
THESE FUNDS SEEK TO PROVIDE INCOME THAT [SQUARE BULLET] NEW JERSEY MUNICIPAL BOND
IS GENERALLY EXEMPT FROM INCOME TAX,
WHILE PRESERVING CAPITAL.
STABILITY [SQUARE BULLET] TREASURY RESERVE
[SQUARE BULLET] CASH RESERVE
MONEY MARKET FUNDS SEEK GREATER SAFETY [SQUARE BULLET] TAX-FREE RESERVE
AND STABILITY OF PRINCIPAL WHILE
PROVIDING INCOME.
LOWER HIGHER
RISK RISK
RISK/RETURN SPECTRUM
</TABLE>
9
<PAGE>
FUND
DESCRIPTIONS
- --------------------------------------------------------------------------------
DECEMBER 31, 1997
[SQUARE BULLET] EQUITY (STOCK) FUNDS
INVEST PRIMARILY IN SECURITIES SUCH AS COMMON STOCKS. THESE FUNDS SEEK MAXIMUM
LONG-TERM GAINS THROUGH CAPITAL APPRECIATION.
<TABLE>
OBJECTIVE FOR A LONG-TERM INVESTOR WHO IS LOOKING FOR...
<S> <C> <C>
[SQUARE BULLET] EQUITY Seeks to achieve price and yield ...results substantially in line with the performance
INDEX FUND performance similar to the S&P 500 of the stock market as a whole.
Composite Index.
[SQUARE BULLET] CORE EQUITY Seeks growth of capital by investing ...growth of capital and is willing to take higher
FUND primarily in a diversified portfolio risk for potentially higher returns.
of common stocks.
[SQUARE BULLET] GROWTH Seeks growth of capital and an ...capital appreciation and is willing to take higher
EQUITY FUND increasing flow of dividends from risk for potentially higher returns.
a diversified portfolio of common
stocks.
[SQUARE BULLET] SPECIAL Seeks capital growth by investing ...growth of capital and is willing to take higher risk
EQUITY FUND principally in a diversified and experience greater volatility for potentially higher
portfolio of common stocks. returns.
[SQUARE BULLET] INTERNATIONAL Seeks long-term growth of capital ...growth of capital and is willing to assume the
GROWTH FUND by investing in a portfolio of additional risks inherent in foreign investing in
common stocks diversified by country exchange for potentially higher returns.
and industry.
</TABLE>
10
<PAGE>
[SQUARE BULLET] COREFUND FAMILY OF MUTUAL FUNDS
- --------------------------------------------------------------------------------
[SQUARE BULLET] BALANCED FUND
INVESTING IN BOTH COMMON STOCKS AND FIXED INCOME. THIS FUND SEEKS TO PROVIDE
TOTAL RETURN WHILE PRESERVING CAPITAL.
<TABLE>
OBJECTIVE FOR A LONG-TERM INVESTOR WHO IS LOOKING FOR...
<S> <C> <C>
[SQUARE BULLET] BALANCED FUND Seeks to provide total return while ...participation in a diversified portfolio program
preserving capital. that is continuously and professionally managed and is
willing to take higher risk for potentially higher returns.
[SQUARE BULLET] FIXED INCOME (BOND) FUNDS
INVEST PRIMARILY IN INTEREST-PAYING SECURITIES ISSUED BY THE U.S. GOVERNMENT AND
ITS AGENCIES AS WELL AS CORPORATE BONDS AND COMMERCIAL PAPER. THESE FUNDS SEEK
TO PROVIDE A REGULAR STREAM OF CURRENT INCOME.
[SQUARE BULLET] SHORT TERM Seeks consistent current income ...higher yield than can be expected from either cash
INCOME FUND and relative stability of principal by management funds or other short-term investments,
investing primarily in a diversified but with less volatility than most longer-term bond funds.
portfolio of investment-grade debt
securities with remaining maturities
of three years or less.
[SQUARE BULLET] SHORT- Seeks consistent current income by ...higher yield than can be expected from other
INTERMEDIATE investing principally in a short-term investments but without the wide swings
BOND FUND diversified portfolio of debt normally attributable to long-term bond funds.
securities with an average weighted
maturity of two to five years.
</TABLE>
11
<PAGE>
FUND
DESCRIPTIONS
(CONTINUED)
- --------------------------------------------------------------------------------
DECEMBER 31, 1997
[SQUARE BULLET] FIXED INCOME (BOND) FUNDS (CONTINUED)
<TABLE>
OBJECTIVE FOR A LONG-TERM INVESTOR WHO IS LOOKING FOR...
<S> <C> <C>
[SQUARE BULLET] GOVERNMENT Seeks to provide current income while ...investment performance and can tolerate the risk
INCOME FUND preserving principal value and from an actively managed portfolio of taxable fixed-income
maintaining liquidity. securities without credit risk.
[SQUARE BULLET] BOND FUND Seeks to maximize long-term total ...investment performance and can tolerate the associated
return by investing principally in a risk from an actively managed portfolio of taxable fixed
diversified portfolio of debt income securities.
securities.
[SQUARE BULLET] GLOBAL Seeks to provide capital appreciation ...capital appreciation and current income over the
BOND FUND and current income through investment long term, and is willing to assume the additional
in fixed income securities of the risks of foreign investing for potentially higher returns,
United States and foreign issuers. and seeks benefits of international diversification.
[SQUARE BULLET] TAX-EXEMPT INCOME FUNDS
INVEST IN GENERAL OBLIGATION BONDS, REVENUE BONDS, AND MUNICIPAL NOTES, ALL OF
WHICH FINANCE PUBLIC WORKS AND SERVICES. THESE FUNDS SEEK TO PROVIDE INCOME THAT
IS GENERALLY EXEMPT FROM FEDERAL INCOME TAX AND IN SOME CASES FROM STATE AND
LOCAL TAXES.
[SQUARE BULLET] INTERMEDIATE Seeks a high level of income exempt ...a conservative investment and seeks after-tax
MUNICIPAL from federal income tax consistent yields while protecting principal.
BOND FUND with the preservation of capital.
[SQUARE BULLET] PENNSYLVANIA Seeks a high level of current income, ...a moderate rate of tax-free income with less price
MUNICIPAL consistent with the preservation of volatility than long-term municipal bonds and the
BOND FUND capital, that is exempt from PA state enhanced investment performance of an actively managed
and local personal income tax. portfolio of tax-free securities.
</TABLE>
12
<PAGE>
[SQUARE BULLET] COREFUND FAMILY OF MUTUAL FUNDS
- --------------------------------------------------------------------------------
[SQUARE BULLET] TAX-EXEMPT INCOME FUNDS (CONTINUED)
<TABLE>
OBJECTIVE FOR A LONG-TERM INVESTOR WHO IS LOOKING FOR...
<S> <C> <C>
[SQUARE BULLET] NEW JERSEY Seeks a high level of current income ...a moderate rate of tax-free income with less price
MUNICIPAL consistent with the preservation of volatility than long-term municipal bonds and the
BOND FUND capital, that is exempt from New Jersey enhanced investment performance of an actively managed
state and local personal income tax. portfolio of tax-free securities.
[SQUARE BULLET] MONEY MARKET FUNDS
INVEST PRIMARILY IN QUALITY SHORT-TERM SECURITIES OF THE U.S. GOVERNMENT AND ITS
AGENCIES, COMMERCIAL PAPER, CERTIFICATES OF DEPOSIT, AND REPURCHASE AGREEMENTS.
THESE FUNDS SEEK TO MAINTAIN A CONSTANT SHARE PRICE OF $1.00 WITH INCOME VARYING
ACCORDING TO MARKET CONDITIONS AND INTEREST RATES. HOWEVER, MONEY MARKET FUNDS
ARE NOT INSURED OR GUARANTEED BY THE U.S. GOVERNMENT, AND THERE CAN BE NO
ASSURANCE THAT THESE FUNDS WILL BE ABLE TO MAINTAIN A STABLE NET ASSET VALUE OF
$1.00.
[SQUARE BULLET] TREASURY Seeks current income with liquidity ...liquidity of assets, current income, and
RESERVE and stability of principal, with stability of principal.
investments exclusively in U.S.
Treasury obligations.
[SQUARE BULLET] CASH RESERVE Seeks current income with liquidity ...liquidity of assets, current income, and
and stability of principal. stability of principal.
[SQUARE BULLET] TAX-FREE Seeks current income that is exempt ...current income exempt from federal income taxes,
RESERVE from regular income tax with stability of principal, and liquidity of assets.
liquidity and stability of principal.
</TABLE>
13
<PAGE>
CORESTATES
INVESTMENT
ADVISERS'
REVIEW
- --------------------------------------------------------------------------------
DECEMBER 31, 1997
ABOUT CORESTATES
INVESTMENT ADVISERS
(CSIA)
[SQUARE BULLET] INVESTMENT MANAGERS FOR THE
COREFUND FAMILY OF MUTUAL
FUNDS.
[SQUARE BULLET] AN AFFILIATE OF CORESTATES
FINANCIAL CORP, ONE OF THE
NATION'S LARGEST AND MOST
RESPECTED BANKING INSTITUTIONS.
[SQUARE BULLET] DEDICATED TO PROVIDING ITS
INVESTORS WITH PROFESSIONAL
INVESTMENT MANAGEMENT.
[SQUARE BULLET] SERVING THE NEEDS OF INSTITUTIONS,
CORPORATIONS, MUNICIPALITIES, AND
INDIVIDUAL INVESTORS.
[SQUARE BULLET] MANAGING MORE THAN $18 BILLION
IN ASSETS, INCLUDING MORE THAN
$4 BILLION IN COREFUNDS.
[SQUARE BULLET] SUPPORTING YOU WITH INVESTMENT
EXPERTISE FOR THE LONG TERM.
COREFUND INVESTMENT REVIEW
Q: How did the economic climate over the last six months of 1997 impact the
world's markets?
[PHOTO OF MARK STALNECKER OMITTED]
A: The U.S. economy was strong and stable through the period and continued
to grow at a real rate of nearly 4%. In addition, inflation, as measured by the
Consumer Price Index, was less than 2%, despite tighter labor markets, strong
consumer confidence and nearly double-digit growth in corporate profits.
[PHOTO OF MARK STALNECKER OMITTED]
During the six months, fears that the Federal Reserve would again move to
restrict monetary growth never became a reality. Subsequently, the inflation
picture remained favorable and short-term interest rates remained relatively
stable. Given the improved inflation outlook, intermediate and long-term U.S.
interest rates have declined. In fact, by year-end the 30-year U.S. Treasury
bond rate was below 6%.
Toward the end of the period, serious problems throughout the Southeast
Asian economy negatively impacted the world markets. International equities
underperformed the domestic markets. International bonds also had a challenging
six months.
[PHOTO OF MARK STALNECKER OMITTED]
Q: How did the CoreFunds perform overall during their semi-annual period?
[GRAPHIC OF POINTER OMITTED]
A: We are pleased to report that for the six-month period ending December
31, 1997, your fund managers produced largely positive returns for CoreFund
investors in spite of periods of volatility throughout the world economy.
Q: Why did equity investors experience such sudden market fluctuations
during the period?
A: Recent difficulties in the overseas market, and in Southeast Asia in
particular,
14
<PAGE>
[SQUARE BULLET] COREFUND
- --------------------------------------------------------------------------------
caused market uncertainty in late October, triggering a sudden sharp price drop
followed by a vigorous recovery.
However, for the full calendar year 1997, the broad U.S. stock market saw
solid gains as it continued to make bull market history. The large
capitalization S&P 500 Index (S&P) produced a total return of 33.36%. Most of
this return, 20.6%, was realized in the first half of 1997. For the last half of
the year (the first six-months of the funds' fiscal year), the market produced a
return of 10.58%.
[PHOTO OF MARK STALNECKER OMITTED]
Smaller capitalization stocks continued to provide investors with more
modest returns than the S&P 500 in 1997. The Russell 3000 Equal Weighted Index,
which includes both mid-cap and small-cap stocks, produced a return of 25.35%
for the full year 1997, including a return of 12.76% in the last six months. All
in all, U.S. stock prices benefited from lower interest rates and strong profit
growth. Expectations are that 1998 will bring slower profit growth.
And, if uncertainties continue in the international markets, it will be
unlikely that stock market conditions in 1998 will match those of 1997.
Q: How did uncertainties in the equity market affect U.S. bonds and money
market instruments?
A: After rising modestly in the first quarter of 1997, money market rates
stabilized. Asian economic worries and lower than anticipated inflation (the two
are not unrelated) allayed fears of Federal Reserve "tightening." In fact, by
year-end 1997, most market experts expected that the next policy action by the
Federal Reserve would be to "ease" money market rates rather than to raise them.
As long-term interest rates fell in response to these changed expectations,
the return on bond investments rose. For the full-year 1997, the bond market, as
measured by the Salomon
(CONTINUED)
[BAR GRAPH DEPICTING CAPITAL MARKET RETURNS]
CAPITAL MARKET RETURNS
(% OF TOTAL RETURN)
FULL YEAR (1/97-1/98) LAST SIX MONTHS `97
DJIA 24.94 4.01
S&P 500 33.36 10.58
SBBI 9.62 6.37
JPMGB 1.40 2.52
EAFE 1.78 (8.48)
DJIA = DOW JONES INDUSTRIAL AVERAGE
S&P 500 = STANDARD & POOR'S COMPOSITE INDEX
SBBI = SALOMON BROTHERS BROAD BOND INDEX
JPMGB = JP MORGAN GLOBAL BOND INDEX, US$ HEDGED
EAFE = MORGAN STANLEY EUROPE, AUSTRALIA AND FAR EAST INDEX
[LINE GRAPH DEPICTING CHANGES IN THE YIELD CURVE OMITTED]
CHANGES IN THE YIELD CURVE
(US TREASURY SECURITIES)
6/30/97 12/31/97
3 MO 5.172% 5.342%
6 MO 5.251% 5.435%
1 YR 5.651% 5.476%
2 YR 6.059% 5.642%
3 YR 6.209% 5.669%
5 YR 6.372% 5.705%
10 YR 6.491% 5.741%
30 YR 6.780% 5.924%
15
<PAGE>
CORESTATES
INVESTMENT
ADVISERS'
REVIEW
(CONCLUDED)
- --------------------------------------------------------------------------------
DECEMBER 31, 1997
[BAR GRAPH DEPICTING STOCKS -- INTERNATIONAL VS. DOMESTIC]
STOCKS -- INTERNATIONAL VS. DOMESTIC
(% OF TOTAL RETURN AS OF 12/97)
S&P 500 EAFE
1 YR. 33.36 1.78
2 YR. 28.05 3.90
3 YR. 31.13 6.28
4 YR. 22.94 6.65
5 YR. 20.25 11.39
S&P 500 = STANDARD & POOR'S 500 COMPOSITE INDEX
EAFE = MORGAN STANLEY EUROPE, AUSTRALIA AND FAR EAST INDEX
Brothers Broad Index, earned a total return of 9.62%. The Index return for the
first half of the year was 3.06%, and for the second half of the year was 6.37%.
With falling commodity prices, a strong U.S. dollar, and weaker international
economies, the outlook for U.S. interest rates remains optimistic.
[PHOTO OF MARK STALNECKER OMITTED]
Q: How have the international equity markets performed given the recent
conditions?
A: By and large, foreign equities continued to underperform domestic
equities. Troubles in Asia, generally disappointing growth, and weaker
currencies against the dollar all hurt returns. For the full-year 1997,
international equity returns (in U.S. dollar terms), as represented by the
Morgan Stanley EAFE Index, were 1.78%. For the first six months of the funds'
fiscal year, the return was (8.48)%, compared to 11.21% for the six months
ending June 30, 1997.
Q: What is the economic outlook for 1998?
A: While signs point to a continuing strong economy in the U.S. in 1998,
major uncertainty hangs over the markets. Distress in Asian markets, including
Japan, together with a drop in their foreign exchange rates could again have an
impact on domestic markets. Given the current high valuation of U.S. equities,
the market continues to remain vulnerable to negative surprises. While market
expectations are that the worst is now behind us, and while we believe the aid
packages put in place by international agencies to help Southeast Asia will
suffice, there remains a risk that this economic "flu" will spread and damage
the U.S. and other economies.
[PHOTO OF MARK STALNECKER OMITTED]
16
<PAGE>
[SQUARE BULLET] CORE FUND
- --------------------------------------------------------------------------------
Q: What advice do you have for CoreFund investors given current conditions?
A: Solid, long-term real returns can be realized by investors who stay with
their long-term investment plans through market cycles. Investors should view
any short-term market declines within the context of the returns earned during
the past decade. Investors should remain committed to their long-term investment
plan and not attempt to try to "time" market movements.
Thank you for your continued confidence in the CoreFund Family of Mutual
Funds. We are committed to providing investors with strong returns across all
investment objectives. For additional information concerning your fund(s), I
direct your attention to the comments by the fund portfolio managers.
[PHOTO OF MARK STALNECKER OMITTED]
/S/ SIGNATURE
MARK STALNECKER
CHAIRMAN, CSIA
17
<PAGE>
MANAGERS'
DISCUSSION
OF
FUND
PERFORMANCE
- --------------------------------------------------------------------------------
DECEMBER 31, 1997
COREFUND EQUITY MANAGERS
LARY AASHEIM
EQUITY INDEX
STEPHEN DALTON
GROWTH EQUITY AND BALANCED
(MANAGERS NOT SHOWN)
JOSEPH STOCKE
CORE EQUITY & SPECIAL EQUITY
MICHAEL GIBSON
MARTIN CURRIE, INC.
AND
BEVERLY HENDRY
ABERDEEN MANAGERS
INTERNATIONAL GROWTH
[PHOTO OF LARY AASHEIM AND STEPHEN DALTON OMITTED]
[SQUARE BULLET] EQUITY INDEX FUND
SEMI-ANNUAL RESULTS
[GRAPHIC OF POINTER OMITTED]
[SQUARE BULLET] This Fund returned 10.12% after expenses for the six months
ending December 31, 1997.
[SQUARE BULLET] The Fund's benchmark, the S&P 500 Composite Index (S&P 500),
returned 10.58% for the same period.
[SQUARE BULLET] Assets in the Fund grew 11% from$245.9 million to $272.7 million
during the six months.
COMMENTARY
The CoreFund Equity Index Fund is managed to mirror the S&P 500 Index. As it
reflects the performance of the overall stock market, the Fund offers investors
the potentially attractive long-term returns of the equity market, while
insulating them from the risks associated with any one investment management
style.
The Fund is invested in a well-diversified sampling of the 500 names of the S&P
500 Index. A quantitative model is used to make sure that sector weightings are
maintained in the same proportions as the Index. This minimizes the impact of
transaction costs which can have a negative impact on performance. We take
advantage of every opportunity to keep transaction costs as low as possible at
all times.
Even after taking out expenses, the Fund slightly underperformed the
Index for the semi-annual time period. One reason for this was the need to
maintain higher cash levels to support less predictable cash flows during this
period. The result was a slight drag on net performance which impacted the
Fund's ability to track, or match, Index performance.
Although the Fund is not managed in terms of market conditions, we closely
monitor the world economy. Looking ahead,
18
<PAGE>
[SQUARE BULLET] COREFUND
- --------------------------------------------------------------------------------
we expect market volatility to continue due to the Southeast Asia turmoil and
the strength of the U.S. dollar. On the bright side, the problems in Southeast
Asia have helped to lower interest rates. While corporate earnings are hurt by
Asian exposure, valuations are helped by the lower interest rates.
[BAR GRAPH OMITTED]
6-MONTH TOTAL RETURN %
----------------------
S&P 500 INDEX EQUITY INDEX (CLASS Y)
10.58 10.12
PERFORMANCE
- ---------------------------------------------
6-MONTH NAV NAV
TOTAL RETURN 6/30/97 12/31/97
(CUMULATIVE)
- ---------------------------------------------
CLASS Y 10.12% $37.39 $39.65
CLASS A W/O LOAD 2.74 37.37 39.66
CLASS A W/LOAD (2.90) 39.54 41.97
CLASS B W/O LOAD 3.37* -- 39.12
CLASS B W/LOAD (1.62)* -- --
S&P 500 INDEX 10.58 -- --
- ---------------------------------------------
*INCEPTION DATE 11/7/97
[SQUARE BULLET] CORE EQUITY FUND
[GRAPHIC OF POINTER]
SEMI-ANNUAL RESULTS
[SQUARE BULLET] This Fund returned 11.87% for the six months ending December 31,
1997.
[SQUARE BULLET] The Fund's benchmark, the S&P 500 Index, returned 10.58% for the
same period.
[SQUARE BULLET] Assets in the Fund grew 9% from$531.1 million to $576.8 million
during the six months.
COMMENTARY
During the last six months of 1997, the Core Equity Fund produced positive
results for shareholders and slightly outperformed its benchmark. Throughout the
period, we saw an equity market that was much more volatile than we've seen in
recent years.
There was a sell-off in October due to concern about the implications
of the situation in Asia on the United States A rebound followed, but the market
wasn't able to break through to new highs. As a result, we've entered a period
where the market is supported by low interest rates due to low inflation and a
strong dollar. But, these positives are being offset by the problems
EQUITY INDEX FUND
----------------
QUICK FUND FACTS
----------------
INCEPTION DATE:
FEBRUARY 14, 1985
PORTFOLIO SIZE:
$272.7 MILLION
SHARES OUTSTANDING:
6,877,433 (Y A&B COMBINED)
TOP FIVE HOLDINGS
----------------
(% OF FUND INVESTMENTS)
GENERAL ELECTRIC
3.2%
COCA-COLA
2.2%
MICROSOFT
2.0%
EXXON
2.0%
MERCK & COMPANY
1.7%
19
<PAGE>
MANAGERS'
DISCUSSION
OF
FUND
PERFORMANCE
(CONTINUED)
- --------------------------------------------------------------------------------
DECEMBER 31, 1997
CORE EQUITY FUND
----------------
QUICK FUND FACTS
----------------
INCEPTION DATE:
FEBRUARY 28, 1990
PORTFOLIO SIZE:
$576.8 MILLION
SHARES OUTSTANDING:
27,999,895 (Y, A&B COMBINED)
TOP FIVE HOLDINGS
----------------
(% OF FUND INVESTMENTS)
WORLDCOM
3.8%
CENDANT
3.5%
AIRTOUCH COMMUNICATIONS
3.3%
MOBIL
3.2%
NABISCO CLASS A
3.1%
[SQUARE BULLET] CORE EQUITY (CONTINUED)
in Asia which may put pressure oncorporate profits.
Throughout the period we kept to our Fund strategy, using a bottom-up
approach that combines quantitative and qualitative analysis, to invest in a
diversified group of the most attractive large- and mid-capitalization
companies.Overall, sector weightings within the Fund remained consistent
throughout the period.
The Fund benefited from an overweighting within the communication sector
including strong performance from such stocks as Storage Technology and America
Online. Investments in Lowe's Company and General Nutrition within the retail
sector also helped performance. The Fund was hurt by weak performance in the
basic materials sector and the healthcare sector.
Looking ahead, we expect the market to continue to be choppy, reacting on
a daily basis to whatever news is coming out of the Asian countries and the most
current economic data. Although investors are being pushed into the bond market
due to concerns about Asia, they are also being pulled back to the stock market
because of low, and declining, interest rates. As a result, the market is not
making a lot of progress in either direction and we wouldn't be surprised to see
these conditions continue for a while longer.
[BAR GRAPH OMITTED]
6-MONTH TOTAL RETURN %
----------------------
S&P 500 INDEX CORE EQUITY (CLASS Y)
10.58 11.87
PERFORMANCE
- ---------------------------------------------
6-MONTH NAV NAV
TOTAL RETURN 6/30/97 12/31/97
(CUMULATIVE)
- ---------------------------------------------
CLASS Y 11.87% $21.11 $20.60
CLASS A W/O LOAD 11.70 21.13 20.61
CLASS A W/LOAD 5.56 22.36 21.81
CLASS B W/O LOAD (7.39)* -- 18.31
CLASS B W/LOAD (11.36)* -- --
S&P 500 INDEX 10.58 -- --
- ---------------------------------------------
*INCEPTION DATE 11/7/97
20
<PAGE>
[SQUARE BULLET] COREFUND
- --------------------------------------------------------------------------------
[SQUARE BULLET] GROWTH EQUITY FUND
SEMI-ANNUAL RESULTS
[SQUARE BULLET] This Fund returned 14.11% for the six months ending December 31,
1997.
[SQUARE BULLET] The Fund's benchmarks, the Lipper Growth Funds Index and the S&P
500 returned 10.98% and 10.58% respectively for the six months.
[SQUARE BULLET] Assets in the Fund grew 11% from $152.4 million to $168.5
million during the six months.
COMMENTARY
[GRAPHIC OF POINTER OMITTED]
The CoreFund Growth Equity Fund outperformed its benchmarks while producing
positive returns for investors.
Sector leadership was rotational. Through October, the technology,
financial, and healthcare sectors led performance. In the second quarter,
electric utilities performed well, as did telecommunications services where we
saw strength based on consolidations and continued strong fundamentals.
Briefly, at the beginning of the period, smaller capitalization stocks
performed better than larger capitalization stocks. However, a flight to larger
capitalization, quality, domestic, and interest-sensitive sectors paced the
broader market's return in the second quarter. The stocks of companies perceived
to have significant Asian exposure or sectors containing stocks of companies
pre-announcing negative earnings surprises, such as oil service, technology, and
HMO's, were the weakest of the quarter.
The Fund benefited from better-than-expected earnings growth and
enjoyed great performance through September. However, the Fund's overweighting
in technology caused it to be negatively impacted by the Asian crisis the second
quarter.
Offsetting the weaker areas, an overweighting in financial stocks and
communications services helped performance. This was primarily due to
exceptional results by Teleport, McLeod, and Brooks Fiber Properties. During
this period we increased our holdings of consumer cyclicals, telecommunications
services, and financial stocks while reducing our energy and healthcare
holdings.
Looking ahead, we will remain fully invested with incremental buying in
domestically oriented sectors with strong growth characteristics, including
retail, media, food, and insurance. We will keep our lower
GROWTH EQUITY FUND
------------------
QUICK FUND FACTS
------------------
INCEPTION DATE:
FEBRUARY 3, 1992
PORTFOLIO SIZE:
$168.5 MILLION
SHARES OUTSTANDING:
10,318,439 (Y, A&B COMBINED)
TOP FIVE HOLDINGS
------------------
(% OF FUND INVESTMENTS)
DAYTON HUDSON
3.0%
GAP
2.8%
HEALTH MANAGEMENT
ASSOCIATES
2.7%
BMCSOFTWARE
2.6%
ALLSTATE
2.5%
21
<PAGE>
MANAGERS'
DISCUSSION
OF
FUND
PERFORMANCE
- --------------------------------------------------------------------------------
(CONTINUED)
DECEMBER 31, 1997
[SQUARE BULLET] GROWTH EQUITY (CONTINUED)
technology weighting, until we see what impact the Asian economic crisis will
have on this sector. The Asian crisis may have a negative effect on selected
companies and modestly slow the U.S. expansion. However, the positive impact of
lower inflation and interest rates may have an overall beneficial impact on U.S.
financial assets. [SQUARE BULLET]
- --------------------------------------------------------------------------------
[BAR GRAPH OMITTED]
6-MONTH TOTAL RETURN %
----------------------
GROWTH EQUITY (CLASS Y) LIPPER GROWTH EQUITY INDEX S&P 500 INDEX
14.11 10.98 10.58
PERFORMANCE
- ----------------------------------------------
6-MONTH NAV NAV
TOTAL RETURN 6/30/97 12/31/97
(CUMULATIVE)
- ----------------------------------------------
CLASS Y 14.11% $15.43 $16.33
CLASS A W/O LOAD 14.02 15.39 16.27
CLASS A W/LOAD 7.72 16.29 17.22
CLASS B W/O LOAD 0.85* -- 16.19
CLASS B W/LOAD (3.83)* -- --
LIPPER GROWTH 10.98 -- --
S&P 500 INDEX 10.58 -- --
- --------------------------------------------
*INCEPTION DATE 11/18/97
[SQUARE BULLET] SPECIAL EQUITY FUND
SEMI-ANNUAL RESULTS
[SQUARE BULLET] This Fund returned 8.14% for the six months ending December 31,
1997.
[SQUARE BULLET] The Fund's benchmark, the Russell 3000 Equal Weighted Index,
returned 12.76% for the same period.
[SQUARE BULLET] Assets in the Fund grew 4% from $74.3 million to $77.0 million
during the six months.
COMMENTARY
The CoreFund Special Equity Fund underperformed its benchmark during a volatile
period in its sector of the stock market. The underperformance was due primarily
to stock selection, profit taking, and an overall market gravitation away from
smaller companies to blue-chip companies as investors reacted to the crisis in
Asia.
There was a sell-off in October due to concerns about the implications
of the situation in Asia on the United States. A rebound followed, but the
market wasn't able to break through to new highs. As a result, we've entered a
period where the market is supported by low interest rates due to low
22
<PAGE>
[SQUARE BULLET] COREFUND
- --------------------------------------------------------------------------------
[BAR GRAPH OMITTED]
6-MONTH TOTAL RETURN %
----------------------
SPECIAL EQUITY (CLASS Y) RUSSELL 3000 (EW) INDEX
8.14 12.76
PERFORMANCE
- ----------------------------------------------
6-MONTH NAV NAV
TOTAL RETURN 6/30/97 12/31/97
(CUMULATIVE)
- ----------------------------------------------
CLASS Y 14.11% $15.43 $16.33
CLASS A W/O LOAD 14.02 15.39 16.27
CLASS A W/LOAD 7.72 16.29 17.22
CLASS B W/O LOAD 0.85* -- 16.19
CLASS B W/LOAD (3.83)* -- --
LIPPER GROWTH 10.98 -- --
S&P 500 INDEX 10.58 -- --
- ----------------------------------------------
*INCEPTION DATE 11/7/97
inflation and a strong dollar. But, these positives are being offset by the
problems in Asia which may put pressure on corporate profits.
Throughout the period we kept to our Fund strategy, using a bottom-up
approach combining quantitative and qualitative analysis, to invest in a
diversified group of the most attractive mid- and small-capitalization
companies. Overall, sector weightings within the Fund remained consistent
throughout the period.
[SQUARE POINTER OMITTEED]
The Fund benefited from strong performance from such stocks as Bright
Horizons (a daycare franchise), Mac-Gray (a laundry services company) as well as
America Online, within the technology sector, and General Nutrition within the
retail sector. Financial stocks were among the best performers, led by declining
interest rates and continuing consolidation among banks and brokers. Overall,
technology stocks had a poor year as fourth quarter concerns over the growing
Asian crisis were particularly harmful.
Looking ahead, we expect the market to continue to be choppy, reacting
on a daily basis to whatever news is coming out of the Asian countries and the
most current economic data. Although investors are being pushed into the bond
market due to concerns about Asia, they are also being pulled back to the stock
market because of low, and declining, interest rates. As a result, the market is
not making a lot of progress in either direction and we wouldn't be surprised to
see these conditions continue for a while longer. [SQUARE BULLET]
- --------------------------------------------------------------------------------
SPECIAL EQUITY FUND
-------------------
QUICK FUND FACTS
-------------------
INCEPTION DATE:
MARCH 15, 1994
PORTFOLIO SIZE:
$77.0 MILLION
SHARES OUTSTANDING:
7,232,439 (Y, A&BCOMBINED)
TOP FIVE HOLDINGS
(% OF FUND INVESTMENTS)
SCIOS NOVA
3.4%
CENDANT
2.8%
AMBPROPERTY
2.1%
LUCENT TECHNOLOGIES
1.8%
KUHLMAN
1.7%
23
<PAGE>
MANAGERS'
DISCUSSION
OF
FUND
PERFORMANCE
- --------------------------------------------------------------------------------
(CONTINUED)
DECEMBER 31, 1997
INTERNATIONAL GROWTH FUND
-------------------------
QUICK FUND FACTS
-------------------------
INCEPTION DATE:
FEBRUARY 12, 1990
PORTFOLIO SIZE:
$160.7 MILLION
SHARES OUTSTANDING:
12,101,514 (Y, A&BCOMBINED)
TOP FIVE HOLDINGS
-------------------------
(% OF FUND INVESTMENTS)
NOVARTIS AG
2.4%
VEBA
2.1%
EAUX
2.0%
ROCHE HOLDINGS
2.0%
CREDIT SUISSE GROUP
1.8%
[SQUARE BULLET] INTERNATIONAL GROWTH FUND
SEMI-ANNUAL RESULTS
[SQUARE BULLET] This Fund returned (4.89)% for the six months ending December
31, 1997.
[SQUARE BULLET] The Fund's benchmark, the Morgan Stanley Capital International
EAFE Index, returned (8.48)% for the same period.
[SQUARE BULLET] Assets in the Fund declined 2.9% from $165.5 million to $160.7
million during the six months.
COMMENTARY
[GRAPHIC OF POINTER OMITTED]
The CoreFund International Growth Fund beat its benchmark and provided investors
with strong relative performance during a very challenging economic period. The
Fund benefited from the added level of diversification gained by being
co-managed by Martin Currie, Inc. (80%) and Aberdeen Managers (20%).
The Fund's performance was primarily due to very good stock selection,
an underweighting of Japanese securities, a reduction of the Fund's overall
position in the Far East, and a higher than normal cash position. However, the
Fund was still significantly challenged by severe problems in Asia.
Overall, in the third quarter of 1997, the U.K and European markets
were very strong. The U.K. market rallied as interest rates fell. The pound
sterling was weak in the third quarter and strengthened in the fourth quarter.
In the fourth quarter, the U.K. was neutral and Europe was again strong. These
economies are being generally accepted as on track, which has had a positive
effect on investor psychology.
The stocks that performed best for the Fund were financials,
pharmaceutical, and utilities in the U.K. Similar performance was found in these
sectors of the European markets, and in stocks of companies experiencing
restructuring. In the third quarter, the Fund owned some companies with export
exposure, but sold them in the fourth quarter due to currency strengthening.
This move benefited the Fund.
Japan had a very difficult six months. It was down significantly in the
last half of 1997 due to wide spread economic weakness. The Fund is
significantly underweighted in Japan, and we are focusing primarily on those
Japanese companies that export to take advantage of the weak currency.
24
<PAGE>
[SQUARE BULLET] CORE FUND
- --------------------------------------------------------------------------------
Central and Latin America were not too severely impacted by Asian
problems during the third quarter, but caught a bit of the "flu" in the fourth
quarter. The Fund had strong exposure to Mexico and Brazil. But the Brazilian
exposure was reduced during the fourth quarter. We believe Mexico will continue
to do very well. We have excellent relative performance here and believe that
there is still opportunity as it is a more mature, and yet still emerging,
market.
The Asian market environment was very difficult and at times extremely
volatile throughout the period. The markets fell sharply due to severe currency
devaluation and some weakness in the economy. We believe the problems here are
going to take awhile to resolve themselves. In general, we started reducing our
exposure to this area when problems began to emerge at the end of 1996 and the
reduction continued throughout 1997.
Looking ahead, with the Economic Monetary Union still on track, we
expect continued growth in both the U.K. and Europe through 1998. The Fund will
remain focused on pharmaceuticals and financial companies, [BAR GRAPH OMITTED]
[BAR GRAPH OMITTED]
6-MONTH TOTAL RETURN %
----------------------
INTERNATIONAL GROWTH (CLASS Y) MSCI/EAFE INDEX
(8.48) (4.89)
PERFORMANCE
- ---------------------------------------------
6-MONTH NAV NAV
TOTAL RETURN 6/30/97 12/31/97
(CUMULATIVE)
- ---------------------------------------------
CLASS Y (4.89)% $14.72 $13.28
CLASS A W/O LOAD (4.98) 14.70 13.28
CLASS A W/LOAD (10.24) 15.56 14.05
CLASS B W/O LOAD 1.46* -- 13.28
CLASS B W/LOAD (3.35)* -- --
MSCI/EAFE (8.48) -- --
- ---------------------------------------------
*INCEPTION DATE 11/24/97
while reducing exposure to manufacturers with exports as a significant part of
their business.
As for the Asian markets, currently we're looking for buying opportunities.
With 70% of the world's population in this region, values are being created. We
will be closely focusing on the well-managed, well-financed companies which
survive and emerge strongly thereafter. [SQUARE BULLET]
- --------------------------------------------------------------------------------
25
<PAGE>
MANAGERS'
DISCUSSION
OF
FUND
PERFORMANCE
- --------------------------------------------------------------------------------
(CONTINUED)
DECEMBER 31, 1997
BALANCED FUND
----------------
QUICK FUND FACTS
----------------
INCEPTION DATE:
JANUARY 4, 1993
PORTFOLIO SIZE:
$127.4 MILLION
SHARES OUTSTANDING:
9,369,442 (Y, A&BCOMBINED)
TOP FIVE HOLDINGS
----------------
(% OF FUND INVESTMENTS)
HEALTH MANAGEMENT ASSOCIATES
1.5%
CRESTAR FINANCIAL
1.5%
BMCSOFTWARE
1.5%
HBO
1.5%
SCHERING PLOUGH
1.4%
[SQUARE BULLET] BALANCED FUND
SEMI-ANNUAL RESULTS
[SQUARE BULLET] This Fund returned 7.31% for the six months ending December 31,
1997.
[SQUARE BULLET] The Fund's benchmarks, the S&P 500 Index and the Lehman Brothers
Intermediate Government/Corporate Bond Index returned 10.58%
and 4.90%, respectively, for the same period.
[SQUARE BULLET] Assets in the Fund grew 8% from $117.8 million to $127.4 million
during the six months.
COMMENTARY
[GRAPHIC OF POINTER OMITTED]
The CoreFund Balanced Fund produced positive returns for investors for the
semi-annual period. The period was volatile, characterized by
better-than-expected earnings growth, as well as peaking and declining interest
rates. We also saw overwhelming concern about the Southeast Asian economic
crisis which seemed to rule the market and add additional volatility on the
downside to equities, and on the upside to bond yields.
On the equity side, sector leadership was rotational. In the first quarter
(through September), the technology, financial, and healthcare sectors led
performance. In the second quarter electric utilities performed well, as did
telecommunications services where we saw strength based on consolidations and
continued strong fundamentals both in the competitive local exchange carrier and
second-tier long distance stocks.
Briefly, at the beginning of the period, smaller capitalization stocks
performed better than larger capitalization stocks. However, a flight to larger
capitalization, quality, domestic, and interest-sensitive sectors paced the
broader market's return in the second quarter. The stocks of companies perceived
to have significant Asian exposure, and those sectors containing stocks of
companies preannouncing negative earnings surprises, including oil service,
technology and HMO's were the weakest of the quarter. We are now decreasing our
overweighting in energy stocks while increasing our underweighting in financial
stocks which we believe will improve performance.
On the bond side, we saw a peaking of yields at the beginning of this
period and a general decline that accelerated through the end of December. The
flight to quality coupled with the rally in the long bond made
26
<PAGE>
[SQUARE BULLET] CORE FUND
- --------------------------------------------------------------------------------
the 30-year U.S. Treasuries the best performing bonds. The bond portion of the
Fund (30%) underperformed it's index due to having a shorter average duration
than the index.
[BAR GRAPH OMITTED]
6-MONTH TOTAL RETURN %
- ----------------------
BALANCED (CLASS Y) S&P 500 INDEX LEHMAN INT. GOV'T/CORP INDEX
7.31 10.58 4.90
PERFORMANCE
- -----------------------------------------------
6-MONTH NAV NAV
TOTAL RETURN 6/30/97 12/31/97
(CUMULATIVE)
- -----------------------------------------------
CLASS Y 7.31% $13.52 $13.60
CLASS A W/O LOAD 7.19 13.52 13.60
CLASS A W/LOAD 1.27 14.31 14.39
CLASS B W/O LOAD (0.45)* -- 13.51
CLASS B W/LOAD (5.14)* -- --
S&P 500 INDEX 10.58 -- --
LEHMAN INT.
GOV'T/CORP.
BOND INDEX 4.90 -- --
- -----------------------------------------------
*INCEPTION DATE 11/5/97
[GRAPHIC OF POINTER OMITTED]
The Fund's asset allocation is currently 64% stocks, 30% bonds, and 6%
cash. Given current conditions, we plan to keep this breakdown consistent.
Looking ahead, the U.S. economy and corporate profits will be further impacted
by the Asian crisis. Negatively, Asian demand will probably decline for products
used in large projects and big ticket items. On the positive side, inflation,
interest rates, and economic activity in the U.S. should remain below current
expectations, which is beneficial for financial assets. We will thus focus on
domestically-oriented growth issues in equities, while looking to pick up yield
in the bond market. [SQUARE BULLET]
- --------------------------------------------------------------------------------
27
<PAGE>
MANAGERS'
DISCUSSION
OF
FUND
PERFORMANCE
- --------------------------------------------------------------------------------
(CONTINUED)
DECEMBER 31, 1997
SHORT TERM INCOME FUND
----------------------
QUICK FUND FACTS
----------------------
INCEPTION DATE:
MAY 15, 1995
PORTFOLIO SIZE:
$37.8 MILLION
SHARES OUTSTANDING:
3,782,284 (Y&A COMBINED)
AVERAGE WEIGHTED MATURITY:
0.96 YEARS
QUALITY DIVERSIFICATION
[PIE CHART OMITTED]
AAA 53%
AA 4%
A 31%
BBB 6%
OTHER 6%
INVESTMENT QUALITY RATINGS AS RATED BY MOODY'S
[SQUARE BULLET] SHORT TERM INCOME FUND
SEMI-ANNUAL RESULTS
[SQUARE BULLET] This Fund returned 3.00% for the six months ending December 31,
1997.
[SQUARE BULLET] The Fund's benchmark, the Merrill Lynch 1-year Treasury Bill
Index, returned 2.92% for the same period.
[SQUARE BULLET] Assets in the Fund grew 1% from $37.5 million to $37.8 million
during the six months.
COMMENTARY
[GRAPHIC OF POINTER OMITTED]
The CoreFund Short Term Income Fund provided investors with positive returns for
the year. The Fund's asset allocation is about 40% Treasuries, 40% corporates,
and 20% asset-backed securities. Duration matched Index throughout the period
with the exception of the end of the fourth quarter when duration was lengthened
slightly as year-end trades increased. This strategy benefited the Fund's
performance.
During the third quarter of 1997, inflation fears subsided and the
yield curve on short-term securities flattened in reaction to dampened concerns
about an impending increase in the Federal funds rate. Also, as the U.S. moves
closer to a budget surplus, there was a reduction in the supply of Treasury
securities coupled with a healthy demand, causing rates to drop. Corporates were
tightening to Treasuries in the third quarter.
In the fourth quarter, the Asian crisis impacted the market and corporates
began to widen as investors looking for stability moved money into Treasuries.
Events in Asia unraveled, causing investors to reassess value and risk factors
in the market in general. Also
[BAR GRAPH OMITTED]
6-MONTH TOTAL RETURN %
----------------------
SHORT TERM INCOME (CLASS Y) MERRILL LYNCH 1-YEAR T-BILL INDEX
3.00 2.92
YIELD 30-DAY %
--------------
SHORT TERM INCOME (CLASS Y) MERRILL LYNCH 1-YEAR T-BILL INDEX
5.46 5.49
PERFORMANCE
- -----------------------------------------------
6-MONTH YIELD NAV
TOTAL RETURN 30-DAY 12/31/97
(CUMULATIVE)
- -----------------------------------------------
CLASS Y 3.00% 5.46% $ 9.99
CLASS A W/O LOAD 2.87 5.46 9.98
CLASS A W/LOAD (0.43) 5.04 10.32
MERRILL LYNCH
1-YEAR T-BILL
INDEX 2.92 5.49 --
- -----------------------------------------------
28
<PAGE>
[SQUARE BULLET] COREFUND
- --------------------------------------------------------------------------------
in this quarter, U.S. Dollar short-term LIBOR Rates were driven higher and the
supply of Treasury Bills increased. Focus has shifted from LIBOR floater bonds
to Federal Fund-based and Prime-based floater bonds, since these securities tend
to fluctuate less.
Looking forward, we believe uncertainty due to the Asian crisis will
continue, which will keep money moving into the fixed-income market. However,
the impact of the crisis on domestic corporations is still unknown. We will
increase our emphasis on credit quality while maintaining our current neutral
duration structure. [SQUARE BULLET]
- --------------------------------------------------------------------------------
[SQUARE BULLET] SHORT-INTERMEDIATE BOND
SEMI-ANNUAL RESULTS
[GRAPHIC OF POINTER OMITTED]
[SQUARE BULLET] This Fund returned 4.25% for the six month ending December 31,
1997.
[SQUARE BULLET] The Fund's benchmark, the Merrill Lynch 1-3 year Treasury Index
returned 4.90% for the same period.
[SQUARE BULLET] Assets in the Fund grew 4% from $165.9 million to $172.8 million
during the six months.
COMMENTARY
The CoreFund Short-Intermediate Bond Fund outperformed it's benchmark and
provided investors with positive returns for the year. During the semi-annual
period, there was a significant rally in the bond market. The yield curve
declined, largely led by the 30-year Treasury. However, shorter-term securities
did not participate in the rally as much as longer-term bonds.
Treasury securities outperformed all other bonds throughout the period.
Events in Asia unraveled during the second half of the year, causing investors
to reassess value and risk factors in the market in general. As a result, more
money was shifted toward the Treasury market.
SHORT-INTERMEDIATE BOND FUND
----------------------------
QUICK FUND FACTS
----------------------------
INCEPTION DATE:
FEBRUARY 3, 1992
PORTFOLIO SIZE:
$172.8 MILLION
SHARES OUTSTANDING:
17,360,703 (Y&A COMBINED)
AVERAGE WEIGHTED MATURITY:
3.97 YEARS
QUALITY DIVERSIFICATION
AAA 65%
AA 13%
A 10%
BBB 8%
BB 1%
OTHER 3%
[PIE CHART OMITTED]
INVESTMENT QUALITY RATINGS AS RATED BY MOODY'S
29
<PAGE>
MANAGERS'
DISCUSSION
OF
FUND
PERFORMANCE
- --------------------------------------------------------------------------------
(CONTINUED)
DECEMBER 31, 1997
[SQUARE BULLET] SHORT-INTERMEDIATE (CONTINUED)
Coming into the second half of 1997, the Fund's duration was slightly
longer than the Index, which helped performance. The superior performance
resulting from the longer duration was somewhat offset by the Fund's
underweighting in Treasury securities relative to the 100% Treasury Index.
Duration was scaled back to more closely match the Index over the final quarter
of 1997.
COREFUND FIXED INCOME MANAGERS
[PHOTO OMITTED]
(LEFT TO RIGHT)
JOSEPH BAXTER
INTERMEDIATE, PA & NJ MUNI BONDS
DAN TAYLOR
SHORT-INTERMEDIATE BOND
BRIAN SNYDER
INTERMEDIATE, PA & NJ MUNI BONDS
JOHN ACKLER
SHORT TERM INCOME
WILLIAM LAWRENCE
GOVERNMENT INCOME & BOND
(MANAGER NOT SHOWN)
GEORGE MCNEILL
GLOBAL BOND
The yield advantage provided by the Fund's mortgage-backed and
asset-backed securities also added incremental return to the portfolio. However,
the higher yields were offset by the widening of these sectors, in the fourth
quarter of 1997. The Fund took advantage of historically wide asset-backed
securities spreads at year end to increase allocation to that sector.
Within the corporate sector the Fund has focused on banks and financial
companies with an emphasis on takeover themes and strong fundamentals.
Looking ahead to 1998, we will continue to work to add value through
security selection and sector allocation. We expect investors will continue to
be concerned about the impact of the Asian crisis. Accordingly, the high grade
segments of the fixed-income markets should continue to perform well. In
addition, prepayment protection in the mortgage-backed and asset-backed sectors
will become increasingly important the longer Treasury yields remain at these
historically low levels. We will likely lower the Fund's duration as short-term
Treasury yields continue their decline below the Federal Reserve's target
overnight rate. We will also continue to minimize prepayment risk in the Fund's
mortgage and asset-backed holdings. [SQUARE BULLET]
- --------------------------------------------------------------------------------
30
<PAGE>
[SQUARE BULLET] COREFUND
- --------------------------------------------------------------------------------
SHORT-INTERMEDIATE BOND FUND
[BAR GRAPH OMITTED]
6-MONTH TOTAL RETURN %
----------------------
SHORT-INTERMEDIATE (CLASS Y) MERRILL LYNCH 1-3 YR TREASURY INDEX
4.25 4.90
YIELD 30-DAY %
--------------
SHORT-INTERMEDIATE (CLASS Y) MERRILL LYNCH 1-3 YR TREASURY INDEX
5.65 5.91
PERFORMANCE
- ----------------------------------------------
6-MONTH YIELD NAV
TOTAL RETURN 30-DAY 12/31/97
(CUMULATIVE)
- ----------------------------------------------
CLASS Y 4.25% 5.65% $ 9.95
CLASS A W/O LOAD 4.14 5.65 9.95
CLASS A W/LOAD 0.76 5.29 10.28
MERRILL LYNCH
1-3 YR. TREASURY 4.90 5.91 --
- ----------------------------------------------
[SQUARE BULLET] GOVERNMENT INCOME FUND
SEMI-ANNUAL RESULTS
[SQUARE BULLET] This Fund returned 6.00% after expenses for the six months
ending December 31, 1997.
[SQUARE BULLET] The Fund's benchmarks, the Lehman Brothers Aggregate Bond Index
and the Salomon Brothers Broad Bond Index returned 6.38% and
6.37% respectively for the same period.
[GRAPHIC OF POINTER OMITTED]
[SQUARE BULLET] Assets in the Fund grew 11% from $20.7 million to $22.9 million
during the six months.
COMMENTARY
The CoreFund Government Income Fund produced positive results for shareholders
while nearly matching its benchmark. Throughout the third quarter of the
calendar year moderating retail sales and excellent inflation data were combined
with an improving Federal deficit and a decline in the number of Treasury
securities being auctioned.
In the fourth quarter of 1997, this rally continued but, for different
reasons. The Asian crisis dominated this period, fueling a global flight to
quality which helped both the U.S. Dollar and U.S. Treasury securities.
GOVERNMENT INCOME FUND
----------------------
QUICK FUND FACTS
----------------------
INCEPTION DATE:
APRIL 1, 1993
PORTFOLIO SIZE:
$22.9 MILLION
SHARES OUTSTANDING:
2,279,366 (Y&A COMBINED)
AVERAGE WEIGHTED MATURITY:
8.47 YEARS
MATURITY DIVERSIFICATION
UNDER 1 YEAR 2%
1-5 YEARS 49%
6-10 YEARS 36%
OVER 20 YEARS 13%
[PIE CHART OMITTED]
MATURITY IN YEARS -- % OF FUND INVESTMENTS.
31
<PAGE>
MANAGERS'
DISCUSSION
OF
FUND
PERFORMANCE
- --------------------------------------------------------------------------------
(CONTINUED)
DECEMBER 31, 1997
GOVERNMENT INCOME FUND
----------------------
QUICK FUND FACTS
----------------------
INCEPTION DATE:
APRIL 1, 1993
PORTFOLIO SIZE:
$22.9 MILLION
SHARES OUTSTANDING:
2,279,366 (Y&ACOMBINED)
AVERAGE WEIGHTED MATURITY:
8.47 YEARS
MATURITY DIVERSIFICATION
UNDER 1 YEAR 2%
1-5 YEARS 49%
6-10 YEARS 36%
OVER 20 YEARS 13%
[PIE CHART OMITTED]
MATURITY IN YEARS --% OF FUND INVESTMENTS
The Fund began the period heavily invested in mortgage-backed
securities with the balance in U.S. Treasuries. The Fund's average duration was
slightly longer than the Index. As the market rallied, the percent of Treasury
holdings was increased, but the Fund was still underweighted in this area. The
duration of the Treasury holdings was extended to offset the prepayment aspects
of the Fund's mortgage holdings. And, the Fund overall finished the year
slightly longer than the Index duration.
Fund performance was enhanced by the yield advantage of its mortgage
holdings and its duration structure. But, the underweighting in Treasuries and
overweighting in mortgages hurt the Fund's relative performance versus the
Index.
Investors should note that this was a very good period for high grade bond
investors. Looking forward, we believe that for at least the first half of 1998,
concern about the Asian crisis will result in investors being more risk opposed,
emphasizing credit quality and liquidity. The Fund should continue to benefit
from its large Treasury holdings. The Federal Reserve may ease interest rates
possibly resulting in the Treasury market becoming overpriced.
[BAR GRAPH OMITTED]
6-MONTH TOTAL RETURN %
----------------------
GOVERNMENT INCOME LEHMAN AGGREGATE SALOMON BROTHERS
(CLASS Y) BOND INDEX BOND INDEX
6.00 6.38 6.37
YIELD 30-DAY %
--------------
GOVERNMENT INCOME LEHMAN AGGREGATE SALOMON BROTHERS
(CLASS Y) BOND INDEX BOND INDEX
5.94 6.24 6.30
PERFORMANCE
- ----------------------------------------------
6-MONTH YIELD NAV
TOTAL RETURN 30-DAY 12/31/97
(CUMULATIVE)
- ----------------------------------------------
CLASS Y 6.00% 5.94% $10.03
CLASS A W/O LOAD 5.86 5.94 10.03
CLASS A W/LOAD 2.40 5.50 10.37
LEHMAN
AGGREGATE BOND 6.38 6.24 --
SALOMON
BROAD BOND 6.37 6.30 --
- ----------------------------------------------
The Fund will retain its fully invested posture and work to minimize
prepayment risk in its mortgage holdings. Mortgaged pass-through securities will
be utilized as a source of higher yield. [SQUARE BULLET]
- --------------------------------------------------------------------------------
32
<PAGE>
[SQUARE BULLET] COREFUND
- --------------------------------------------------------------------------------
[SQUARE BULLET] BOND FUND
SEMI-ANNUAL RESULTS
[SQUARE BULLET] This Fund returned 6.06% for the six months ending December 31,
1997.
[SQUARE BULLET] The Fund's benchmark, the Lehman Brothers Aggregate Bond Index,
returned 6.38% for the same period.
[SQUARE BULLET] Assets in the Fund declined 5% from $184.0 million to $175.6
million during the six months.
COMMENTARY
During the last year, CoreFund Bond Fund produced positive returns for investors
while nearly matching the performance of its benchmark. Throughout the third
quarter of the calendar year moderating retail sales and excellent inflation
data were combined with an improving Federal deficit and a decline in the number
of Treasury securities being auctioned.
In the fourth quarter of 1997, the rally continued, but, it did so for
different reasons. The Asian crisis dominated this period fueling a global
flight to quality which helped both the U.S. dollar and U.S. Treasury
securities. Also, with the Asian currencies dropping and their economies
weakening, import goods cheapened and global demand softened, giving us an
excellent inflation outlook.
The corporate bond market came under a lot of pressure as a result of the
Asian crisis. In particular, the emerging market subsector dramatically
underperformed in the fourth quarter as the markets of Malaysia, Thailand,
Indonesia, and Korea took hard hits. Domestic corporates also lagged the rally,
especially those companies that have a direct link to the Asian economy.
[GRAPHIC OF POINTER OMITTED]
The Fund's performance was helped by a maturity structure that was
longer than the Index. Early in the period, the Fund benefited from certain
corporate holdings in the finance sector (Salomon Brothers, Lehman Bros.,
BankBoston) due to the ongoing consolidation in the banking and securities
industries. Holdings in TCI and Time Warner also contributed to performance.
Performance was hurt by an underweighting in the U.S. Treasury sector and an
overweighting in the asset-backed sector.
Investors should note that this was a very good period for high grade
bond investors. Looking forward, we believe that
BOND FUND
----------------
QUICK FUND FACTS
----------------
INCEPTION DATE:
FEBRUARY 28, 1990
PORTFOLIO SIZE:
$175.6 MILLION
SHARES OUTSTANDING:
16,670,007 (Y&A COMBINED)
AVERAGE WEIGHTED MATURITY:
10.23 YEARS
QUALITY DIVERSIFICATION
AAA 64%
AA 3%
A 8%
BBB 12%
OTHER 13%
[PIE CHART OMITTED]
INVESTMENT QUALITY RATINGS AS RATED BY MOODY'S
33
<PAGE>
MANAGERS'
DISCUSSION
OF
FUND
PERFORMANCE
- --------------------------------------------------------------------------------
(CONTINUED)
DECEMBER 31, 1997
[SQUARE BULLET] BOND FUND (CONTINUED)
for at least the first half of 1998, investors will continue to be concerned
about the Asian crisis. As a result, they will be more risk opposed, emphasizing
credit quality and liquidity. The Fund should continue to benefit from its
Treasury holdings. The Federal Reserve may ease interest rates, but probably not
until later in the second quarter. [SQUARE BULLET]
- --------------------------------------------------------------------------------
[BAR GRAPH]
6-MONTH TOTAL RETURN %
----------------------
BOND (CLASS Y) LEHMAN AGGREGATE BOND INDEX
6.06 6.38
YIELD 30-DAY %
--------------
BOND (CLASS Y) LEHMAN AGGREGATE BOND INDEX
6.02 6.24
PERFORMANCE
- ------------------------------------------------
6-MONTH YIELD NAV
TOTAL RETURN 30-DAY 12/31/97
(CUMULATIVE)
- ------------------------------------------------
CLASS Y 6.06% 6.02% $10.53
CLASS A W/O LOAD 5.93 6.02 10.53
CLASS A W/LOAD 0.91 5.52 11.06
LEHMAN
AGGREGATE BOND 6.38 6.24 --
- ------------------------------------------------
[SQUARE BULLET] GLOBAL BOND FUND
SEMI-ANNUAL RESULTS
[SQUARE BULLET] This Fund returned 2.06% for the year ending December 31, 1997.
[SQUARE BULLET] The Fund's benchmark, the J.P. Morgan Global Bond Index,
returned 2.52% for the same period.
[SQUARE BULLET] Assets in the Fund grew 3% from $34.8 million to $35.9 million
during the six months.
COMMENTARY
During the past year, the Global Bond Fund reported modest positive returns for
investors within the context of a challenging economic environment. As the
period began, there were indications that the U.S. and the U.K. economies were
overheating and that, while there was no evidence of inflationary pressure,
labor markets were becoming tight.
Higher interest rates became a possibility, and the bond markets began
to look overvalued. The markets in Continental Europe also appeared to be
overvalued as they responded to difficult convergence criteria in advance of the
European Monetary Union. As the period progressed, these pressures increased. In
response, your managers took
34
<PAGE>
[SQUARE BULLET] COREFUND
- --------------------------------------------------------------------------------
[BAR GRAPH OMITTED]
6-MONTH TOTAL RETURN %
----------------------
GLOBAL BOND (CLASS Y) JPM GLOBAL BOND U.S. INDEX
2.06 2.52
YIELD 30-DAY %
--------------
GLOBAL BOND (CLASS Y)
4.95
PERFORMANCE
6-MONTH YIELD NAV
TOTAL RETURN 30-DAY 12/31/97
(CUMULATIVE)
CLASS Y 2.06% 4.95% $9.33
CLASS A W/O LOAD 2.05 4.95 9.32
CLASS A W/LOAD (2.75) 4.47 9.78
JPM GLOBAL BOND 2.52 N/A --
a low risk strategy with a relatively short maturity profile, while keeping some
interest rate hedges to provide for the possibility of further overheating.
The market became even more challenging during the last three months of
1997 as the period was dominated by troubles in a number of the Far East
economies. Over borrowing, overproduction, and unsound financial structures led
to huge devaluations of currencies. The outlook for the bigger economies of
Japan and China is still unclear. One of the consequences of these conditions
was the downgrading of growth forecasts for the developed economies. This
happens as exporting prospects to the Far East were reduced and the prospect of
an inflow of cheaper goods from the Far East was taken into account. Although
these events gave developed bond markets an additional boost as they became a
safe haven from the uncertainties and disasters elsewhere, it also made them
even more overvalued in fundamental terms.
[GRAPHIC OF POINTER OMITTED]
Currently, all the good news is in the market. Short term, nearly all the
markets look vulnerable. However, the bigger picture, looking slightly into the
future, is very encouraging. The U.S. may be close to the limits of domestically
inspired growth, as is the U.K. with its strong currency. European growth will
suffer from downgraded export prospects. Ignoring the impact of the Far East, we
have a sound bond environment. [SQUARE BULLET]
- --------------------------------------------------------------------------------
GLOBAL BOND FUND
----------------
QUICK FUND FACTS
----------------
INCEPTION DATE:
FEBRUARY 15, 1993
PORTFOLIO SIZE:
$35.9 MILLION
SHARES OUTSTANDING:
3,843,846 (Y&ACOMBINED)
AVERAGE WEIGHTED MATURITY:
9.2 YEARS
QUALITY DIVERSIFICATION
AAA 89%
AA 10%
NOT RATED 1%
[PIE CHART OMITTED]
INVESTMENT QUALITY RATINGS AS RATED BY MOODY'S
35
<PAGE>
MANAGERS'
DISCUSSION
OF
FUND
PERFORMANCE
- --------------------------------------------------------------------------------
(CONTINUED)
DECEMBER 31, 1997
INTERMEDIATE MUNICIPAL BOND FUND
--------------------------------
QUICK FUND FACTS
--------------------------------
INCEPTION DATE:
MARCH 3, 1993
PORTFOLIO SIZE:
$1.9 MILLION
SHARES OUTSTANDING:
182,592 (Y&A COMBINED)
AVERAGE WEIGHTED MATURITY:
6.2 YEARS
QUALITY DIVERSIFICATION
AAA 71%
AA 23%
A 3%
NOT RATED 3%
[PIE CHART OMITTED]
INVESTMENT QUALITY RATINGS AS RATED BY MOODY'S
[SQUARE BULLET] INTERMEDIATE MUNI BOND
SEMI-ANNUAL RESULTS
[SQUARE BULLET] This Fund returned 4.13% for the six months ending December 31,
1997.
[SQUARE BULLET] The Fund's benchmark, the Lehman Brothers 7-Year Municipal Bond
Index, returned 4.91% for the same period.
[SQUARE BULLET] Assets in the Fund declined 5% from $2.0 million to $1.9 million
during the six months.
COMMENTARY
[GRAPHIC OF POINTER OMITTED]
During the semi-annual period, CoreFund Intermediate Municipal Bond Fund
provided investors with positive returns as it outperformed its benchmark.
In general, the municipal bond market lagged the rally in U.S.
Treasuries during the last six months of 1997. During the Fund's first quarter
(through September) bond markets fluctuated in reaction to various economic
releases, inflation reports, and concerns about interest rates. In July,
favorable employment and inflation reports led to strong rallies and lower
municipal bond yields. Evidence of stronger economic growth and a weaker dollar
followed in August.
In September, new issues flooded the market as many municipalities
chose to refinance existing bonds to take advantage of the low rates. On the
positive side, legislation did not repeal the De Minimis exemption. This repeal
would have made it less attractive for corporations to invest in municipals, and
therefore may have resulted in the loss of key corporate support.
After reacting to inflation fears in October, bond market yields moved
lower on
[BAR GRAPH OMITTED]
6-MONTH TOTAL RETURN %
----------------------
INTERMEDIATE MUNI (CLASS Y) LEHMAN 7-YEAR MUNI INDEX
4.13 4.91
YIELD 30-DAY %
--------------
INTERMEDIATE MUNI (CLASS Y) LEHMAN 7-YEAR MUNI INDEX
3.86 4.37
PERFORMANCE
- ----------------------------------------------
6-MONTH YIELD NAV
TOTAL RETURN 30-DAY 12/31/97
(CUMULATIVE)
- ----------------------------------------------
CLASS Y 4.13% 3.86% $10.25
CLASS A W/O LOAD 4.00 3.86 10.25
CLASS A W/LOAD 0.60 3.49 10.59
LEHMAN 7-YEAR 4.91 4.37 --
- ----------------------------------------------
36
<PAGE>
[SQUARE BULLET] COREFUND
- --------------------------------------------------------------------------------
expectations that the Asian crisis would slow the U.S. economy and the belief
that the Federal Reserve would not tighten credit. As government bonds rallied,
municipals lagged due to heavy new issuance.
For the six months, issuance was 31% higher vs. 1996, causing municipals to
consistently underperform U.S. Treasuries. As Treasuries benefited from a
world-wide flight to quality, the oversupply within the municipal market kept a
ceiling on how far prices could rise.
Throughout this period, a reduction in Fund assets kept the Fund's duration
slightly shorter than the Index.
Looking ahead, we expect interest rates to remain stable, municipal bond
supply to come down, and municipal yields to tighten. Our strategy is to manage
duration to maximize opportunities. We will continue to manage cash flow. We
will also work to replace bonds that have reached their call prices with new
bonds. [SQUARE BULLET]
- --------------------------------------------------------------------------------
[SQUARE BULLET] PA MUNICIPAL BOND FUND
SEMI-ANNUAL RESULTS
[SQUARE BULLET] This Fund returned 5.51% for the six months ending December 31,
1997.
[SQUARE BULLET] The Fund's benchmark, the Lehman Brothers Pennsylvania Bond
Index, returned 5.54% for the same period.
[SQUARE BULLET] Assets in the Fund grew 43% from $12.2 million to $17.5 million
during the six months.
COMMENTARY
The CoreFund Pennsylvania Municipal Fund nearly mirrored the performance of its
benchmark for the semi-annual period, providing investors with positive tax-free
returns. Through October, the Fund received a 5-Star, rating from Morningstar on
its 1-year return and its assets grew significantly.
[GRAPHIC OF POINTER OMITTED]
In general, the municipal bond market lagged the rally in U.S. Treasuries
during the last six months of 1997. During the first quarter (through September)
bond markets fluctuated in reaction to various economic releases, inflation
reports, and concerns about interest rates. In July, favorable
PENNSYLVANIA MUNICIPAL BOND FUND
--------------------------------
QUICK FUND FACTS
--------------------------------
INCEPTION DATE:
MAY 16, 1994
PORTFOLIO SIZE:
$17.5 MILLION
SHARES OUTSTANDING:
1,624,413 (Y&A COMBINED)
AVERAGE WEIGHTED MATURITY:
10.6 YEARS
QUALITY DIVERSIFICATION
AAA 65%
AA 19%
A 6%
OTHER 10%
[PIE CHART OMITTED]
INVESTMENT QUALITY RATINGS AS RATED BY MOODY'S
37
<PAGE>
MANAGERS'
DISCUSSION
OF
FUND
PERFORMANCE
- --------------------------------------------------------------------------------
(CONTINUED)
DECEMBER 31, 1997
[SQUARE BULLET] PA MUNICIPAL BOND (CON'T.)
employment and inflation reports led to strong rallies and lower municipal bond
yields. Evidence of stronger economic growth and a weaker dollar followed in
August.
[BAR GRAPH OMITTED]
6-MONTH TOTAL RETURN %
----------------------
PA MUNICIPAL (CLASS Y) LEHMAN BROS. PA BOND INDEX
5.51 5.54
YIELD 30-DAY %
--------------
PA MUNICIPAL (CLASS Y) LEHMAN BROS. PA BOND INDEX
4.70 4.71
PERFORMANCE
- ---------------------------------------------
6-MONTH YIELD NAV
TOTAL RETURN 30-DAY 12/31/97
(CUMULATIVE)
- ---------------------------------------------
CLASS Y 5.51% 4.70% $10.77
CLASS A W/O LOAD 5.47 4.70 10.78
CLASS A W/LOAD 0.48 4.25 11.32
LEHMAN BROS.
PA BOND 5.54 4.71 --
- ---------------------------------------------
In September, new issues flooded the market as many municipalities
chose to refinance existing bonds to take advantage of the low rates. On the
positive side, legislation did not repeal the De Minimis exemption. This repeal
would have made it less attractive for corporations to invest in municipals, and
therefore may have resulted in the loss of key corporate support.
After reacting to inflation fears in October, bond market yields moved
lower on expectations that the Asian crisis would slow the U.S. economy and the
belief that the Federal Reserve would not tighten credit. As government bonds
rallied, municipals lagged due to heavy new issuance.
For the six months, issuance was 31% higher vs. 1996, causing
municipals to consistently underperform U.S. Treasuries. As Treasuries benefited
from a world-wide flight to quality, the oversupply within the municipal market
kept a ceiling on how far prices could rise.
Looking ahead, we expect interest rates to remain stable, municipal
supply to come down, and municipal yields to tighten. Our duration strategy has
been to stay slightly longer than the Index -- however, we plan to start
bringing it down to neutral with the Index in light of current conditions. We
38
<PAGE>
[SQUARE BULLET] COREFUND
- --------------------------------------------------------------------------------
will continue to work to replace bonds that have reached their call prices with
newer bonds. [SQUARE BULLET]
[SQUARE BULLET] NJ MUNICIPAL BOND FUND
SEMI-ANNUAL RESULTS
[SQUARE BULLET] This Fund returned 5.55% for the six months ending December 31,
1997.
[SQUARE BULLET] The Fund's benchmark, the Lehman Brothers New Jersey Bond Index,
returned 5.54% for the same period.
[SQUARE BULLET] Assets in the Fund grew 11% from $1.9 to $2.1 million during the
six months.
COMMENTARY
[GRAPHIC OF POINTER OMITTED]
The CoreFund NJ Municipal Fund provided investors with positive tax-free returns
for the semi-annual period while outperforming its benchmark.
In general, the municipal bond market lagged the rally in U.S. Treasuries
during the last six months of 1997. During the first quarter (through September)
bond markets fluctuated in reaction to various economic releases, inflation
reports, and concerns about interest rates. In July, favorable employment and
inflation reports led to strong rallies and lower municipal bond yields.
Evidence of stronger economic growth and a weaker dollar followed in August.
In September, new issues flooded the market as many municipalities chose to
NEW JERSEY MUNICIPAL BOND FUND
------------------------------
QUICK FUND FACTS
------------------------------
INCEPTION DATE:
MAY 16, 1994
PORTFOLIO SIZE:
$2.1 MILLION
SHARES OUTSTANDING:
202,830 (Y&A COMBINED)
AVERAGE WEIGHTED MATURITY:
10.6 YEARS
QUALITY DIVERSIFICATION
AAA 47%
AA 25%
NOT RATED 28%
[PIE CHART OMITTED]
INVESTMENT QUALITY RATINGS AS RATED BY MOODY'S
39
<PAGE>
MANAGERS'
DISCUSSION
OF
FUND
PERFORMANCE
- --------------------------------------------------------------------------------
(CONTINUED)
DECEMBER 31, 1997
[SQUARE BULLET] NJ MUNICIPAL BOND (CON'T.)
refinance existing bonds to take advantage of the low rates. On the positive
side, legislation did not repeal the De Minimis exemption. This repeal would
have made it less attractive for corporations to invest in municipals, and
therefore may have resulted in the loss of key corporate support.
After reacting to inflation fears in October, bond market yields moved
lower on expectations that the Asian crisis would slow the U.S. economy and the
belief that the Federal Reserve would not tighten credit. As government bonds
rallied, municipals lagged due to heavy new issuance.
For the six months, issuance was 31% higher vs. 1996, causing municipals to
consistently underperform U.S. Treasuries. As Treasuries benefited from a
world-wide flight to quality, the oversupply within the municipal market kept a
ceiling on how far prices could rise.
Looking ahead, we expect interest rates to remain stable, municipal
supply to come down, and municipal yields to tighten.
[BAR GRAPH]
6-MONTH TOTAL RETURN %
----------------------
NJ MUNICIPAL (CLASS Y) LEHMAN BROS. NJ BOND INDEX
5.55 5.54
YIELD 30-DAY %
--------------
NJ MUNICIPAL (CLASS Y) LEHMAN BROS. NJ BOND INDEX
4.72 4.32
PERFORMANCE
- ---------------------------------------------
6-MONTH YIELD NAV
TOTAL RETURN 30-DAY 12/31/97
(CUMULATIVE)
- ---------------------------------------------
CLASS Y 5.55% 4.72% $10.46
CLASS A W/O LOAD 5.42 4.72 10.45
CLASS A W/LOAD 0.37 4.26 10.97
LEHMAN BROS.
NJ BOND 5.54 4.32 --
- ---------------------------------------------
Our strategy is to manage duration to maximize opportunities. We will continue
to work to replace bonds that have reached their call prices with newer bonds.
[SQUARE BULLET]
- --------------------------------------------------------------------------------
40
<PAGE>
[SQUARE BULLET] COREFUND
- --------------------------------------------------------------------------------
[SQUARE BULLET] TREASURY RESERVE
SEMI-ANNUAL RESULTS
[SQUARE BULLET] This Fund returned 2.57% net of expenses for the six months
ending December 31, 1997.
[SQUARE BULLET] The Fund's benchmark, the IBC Financial U.S. Treasury & REPO
Average, returned 2.47%, net of expenses, for the same period.
[SQUARE BULLET] Assets in the Fund declined 2% from $847.5 million to $831.3
million during the six months.
COMMENTARY
[GRAPHIC OF POINTER OMITTED]
The average weighted maturity of the CoreFund Treasury Reserve remained stable
at 55 days during the semi-annual period. The Fund modestly outperformed its
benchmark, providing conservative money market investors with a competitive
yield.
Throughout the period, the one-year Treasury bill followed the rally in
the coupon sector. Tight supply and strong demand kept the T-bill market at very
rich levels. Three- and six-month bills decreased to their lowest yields since
February 1996. Stock market volatility, the Asian crisis, and the strong buying
of Central Banks have all contributed to the flight to quality and strong demand
for the short-term bills. During the period the dealer community and the central
banks controlled the bill market as there was very little retail buying.
Increases were made during the period to the percentage of holdings of
Treasury-bill alternatives such as old coupon notes and STRIPS, because they
offered a better spread over bills. The Fund also took advantage of higher
overnight yields by increasing its holdings in repurchase agreements.
The Treasury bill market should remain at very rich levels during the
first quarter of 1998. The tight supply/strong
COREFUND MONEY MARKET MANAGERS
[PHOTO OMITTED]
(LEFT TO RIGHT)
JOHN ACKLER
CASH RESERVE
FOLU ABIONA
TAX-FREE RESERVE
RONALD BRASTEN
TREASURY RESERVE
41
<PAGE>
MANAGERS'
DISCUSSION
OF
FUND
PERFORMANCE
- --------------------------------------------------------------------------------
(CONTINUED)
DECEMBER 31, 1997
TREASURY RESERVE
----------------
QUICK FUND FACTS
----------------
INCEPTION DATE:
NOVEMBER 21, 1988
PORTFOLIO SIZE:
$831.3 MILLION
AVERAGE WEIGHTED MATURITY:
55 DAYS
QUALITY DIVERSIFICATION
AAA 33%
NOT RATED 67%
[PIE CHART OMITTED]
INVESTMENT QUALITY RATINGS AS RATED BY MOODY'S
[SQUARE BULLET] TREASURY RESERVE (CON'T.)
demand scenario we have experienced the past several months will continue to be
a factor in the money markets. Other factors, such as the financial crises in
Asia and Federal Reserve Chairman Alan Greenspan's recent comments about the
possibility of deflation, have led the market to believe that the Fed may have
shifted their bias toward an easing in monetary policy. The Fund will continue
its strategy of purchasing Treasury bill alternatives where there are
opportunities. When the technical factors subside and yields rise, the Fund will
go back to its proven laddered approach to investing. [SQUARE BULLET]
- --------------------------------------------------------------------------------
[BAR GRAPH OMITTED]
6-MONTH TOTAL RETURN %
----------------------
TREASURY RESERVE (CLASS Y) IBC FINANCIAL TREASURY & REPO INDEX
2.57 2.47
YIELD 7-DAY %
-------------
TREASURY RESERVE (CLASS Y) IBC FINANCIAL TREASURY & REPO INDEX
5.11 4.88
PERFORMANCE
- -------------------------------------------
6-MONTH YIELD YIELD
TOTAL RETURN 7-DAY 30-DAY
(CUMULATIVE)
- -------------------------------------------
CLASS Y 2.57% 5.11% 5.08%
CLASS C 2.44 4.86 4.83
IBC TREASURY/
REPO 2.47 4.88 4.89
- -------------------------------------------
42
<PAGE>
[SQUARE BULLET] COREFUND
- --------------------------------------------------------------------------------
[SQUARE BULLET] CASH RESERVE
SEMI-ANNUAL RESULTS
[SQUARE BULLET] This Fund returned 2.65% for the six months ending December 31,
1997.
[SQUARE BULLET] The Fund's benchmark, the IBC Financial All-Taxable Money Fund
Average, returned 2.57% for the same period.
[SQUARE BULLET] Assets in the Fund grew 13% from $913.9 million to $1.04 billion
during the six months.
COMMENTARY
The CoreFund Cash Reserve provided money market investors with positive returns
for the semi-annual period. During the third quarter of 1997, inflation fears
subsided and the yield curve on short-term securities flattened in reaction to
dampened concerns about an impending increase in the Federal funds rate. Also,
as the U.S. moved closer to a budget surplus, there was a reduction in the
supply of Treasury securities coupled with a healthy demand, causing rates to
drop.
[BAR GRAPH OMITTED]
6-MONTH TOTAL RETURN %
----------------------
CASH RESERVE (CLASS Y) IBC FINANCIAL ALL-TAXABLE INDEX
2.65 2.57
YIELD 7-DAY %
-------------
CASH RESERVE (CLASS Y) IBC FINANCIAL ALL-TAXABLE INDEX
2.65 2.57
PERFORMANCE
- --------------------------------------------
6-MONTH YIELD YIELD
TOTAL RETURN 7-DAY 30-DAY
(CUMULATIVE)
- --------------------------------------------
CLASS Y 2.65% 5.28% 5.27%
CLASS C 2.52 5.03 5.02
CLASS B* 0.50 4.30 4.28
IBC TAXABLE 2.57 5.12 5.10
- --------------------------------------------
*INCEPTION DATE 11/18/97
However, in anticipation of this drop and the further increased demand
for year-end liquidity trades, dealers purchased large blocks of Treasury bills,
further tightening yields. Also, foreign investors found dollar-denominated
securities attractive due to the strong U.S. currency and high real interest
rates relative to their own.
[GRAPHIC OF POINTER OMITTED]
During the fourth quarter, yields on money market securities were
driven up significantly by the financial crisis in Asia, an increased supply in
the Treasury market, and the anticipation of tight funds over year end. Also in
this quarter, U.S. Dollar short-term LIBOR Rates were driven higher and the
supply of Treasury Bills increased. Focus has been shifted from LIBOR floater
bonds to Federal Fund-based and Prime-based floater
CASH RESERVE
----------------
QUICK FUND FACTS
----------------
INCEPTION DATE:
AUGUST 16, 1985
PORTFOLIO SIZE:
$1.04 BILLION
AVERAGE WEIGHTED MATURITY:
68 DAYS
QUALITY DIVERSIFICATION
AAA 2%
AA 7%
A 84%
NOT RATED 7%
[PIE CHART OMITTED]
INVESTMENT QUALITY RATINGS AS RATED BY MOODY'S
43
<PAGE>
MANAGERS'
DISCUSSION
OF
FUND
PERFORMANCE
- --------------------------------------------------------------------------------
(CONTINUED)
DECEMBER 31, 1997
[SQUARE BULLET] CASH RESERVE (CONTINUED)
bonds since these securities tend to fluctuate less. By the end of year the
market offered great opportunity for investors to buy.
Given these conditions, the Fund's strategy has been to maintain an
average weighted laddered maturity between 65 and 70 days while seeking products
that offer incremental yield. In anticipation of the flurry of year-end
liquidity trades, we placed securities to mature in December, making it possible
for us to buy a lot of longer-term paper during this favorable market.
Looking forward, we believe uncertainty due to the Asian crisis will
continue, which will keep money moving into the fixed-income market. However,
the impact of the crisis on domestic corporations is still unknown. We think
that economic conditions will cause money market yields to trend lower
throughout 1998. We will also increase our emphasis on credit quality while
maintaining our current duration structure. [SQUARE BULLET]
- --------------------------------------------------------------------------------
[SQUARE BULLET] TAX-FREE RESERVE (CONTINUED)
SEMI-ANNUAL RESULTS
[SQUARE BULLET] This Fund returned 1.63% for the six months ending December 31,
1997.
[SQUARE BULLET] The Fund's benchmark, the IBC Financial Tax-Free Average,
returned 1.59% for the same period.
[GRAPHIC OF POINTER OMITTED]
[SQUARE BULLET] Assets in the Fund grew 35% from $122.8 million to $165.2
million during the six months.
COMMENTARY
Moderately outperforming its benchmark, the Tax-Free Reserve provided positive
tax-free returns to shareholders during this semi-annual period. The 7-day yield
for Class Y shares as of December 31, 1997 was 3.32%. At the end of the period,
the Fund had an average weighted maturity of 48 days.
Throughout the six months, we saw a continuation of the trend toward
changing money market volume seasonality patterns. Rates overall were lower due
to volatility.
Yields were unusually attractive in July. In August, yields were lower
as there was an increase in money moving into the
44
<PAGE>
[SQUARE BULLET] COREFUND
- --------------------------------------------------------------------------------
[BAR GRAPH OMITTED]
6-MONTH TOTAL RETURN %
----------------------
TAX-FREE RESERVE (CLASS Y) IBC FINANCIAL TAX-FREE INDEX
1.63 1.59
YIELD 7-DAY %
-------------
TAX-FREE RESERVE (CLASS Y) IBC FINANCIAL TAX-FREE INDEX
3.32 3.38
PERFORMANCE
- ------------------------------------------
6-MONTH YIELD YIELD
TOTAL RETURN 7-DAY 30-DAY
(CUMULATIVE)
- ------------------------------------------
CLASS Y 1.63% 3.32% 3.23%
CLASS C 1.49 3.22 2.97
IBC TAX-FREE 1.59 3.38 3.21
- ------------------------------------------
short tax-exempt market in reaction to volatility in both the stock and bond
markets.
In October, strength in the Treasury market, coupled with troubles in the
Asian economies, caused more money to move into the short tax-exempt market at
an unexpected time. We took advantage of opportunities for maturity extension in
November. In December, the market was more challenging due to light supply.
Looking into 1998, we plan to maintain our current longer duration
strategy. We believe rates will move lower as the Asian crisis drags on the U.S.
economy and we will work to take advantage of any opportunities created by the
market volatility. [SQUARE BULLET]
- --------------------------------------------------------------------------------
TAX-FREE RESERVE
----------------
QUICK FUND FACTS
----------------
INCEPTION DATE:
APRIL 16, 1991
PORTFOLIO SIZE:
$165.2 MILLION
AVERAGE WEIGHTED MATURITY:
48 DAYS
QUALITY DIVERSIFICATION
AAA 13%
AA 9%
A 53%
NOT RATED 25%
[PIE CHART OMITTED]
INVESTMENT QUALITY RATINGS AS RATED BY MOODY'S
45
<PAGE>
[THIS PAGE INTENTIONALLY LEFT BLANK.]
<PAGE>
STATEMENT
OF
NET ASSETS
[SQUARE BULLET] COREFUND EQUITY FUNDS
- --------------------------------------------------------------------------------
AS OF
DECEMBER 31, 1997
(UNAUDITED)
EQUITY INDEX FUND
[PIT CHART OMITTED]
MISCELLANEOUS 8%
UTILITIES 9%
RETAIL 7%
OIL-ENERGY 7%
FINANCIAL 17%
CHEMICALS & DRUGS 13%
CONSUMER PRODUCTS 13%
DURABLE GOODS 26%
% OF TOTAL PORTFOLIO INVESTMENTS
- -------------------------------------------------------
DESCRIPTION SHARES VALUE (000)
- -------------------------------------------------------
COMMON STOCKS -- 99.9%
AEROSPACE & DEFENSE -- 0.9%
Lockheed Martin 6,800 $ 670
Northrop Grumman 1,700 195
Raytheon Company, Class B* 8,900 449
Rockwell International 8,763 458
United Technologies 8,600 626
-----------
2,398
-----------
AGRICULTURE -- 0.1%
Pioneer Hi-Bred International 3,000 322
-----------
AIR TRANSPORTATION -- 0.5%
AMR* 2,800 360
Delta Air Lines 2,500 297
Federal Express* 4,000 244
US Air Group* 7,800 487
-----------
1,388
-----------
AIRCRAFT -- 0.9%
Boeing 38,470 1,883
General Dynamics 1,500 130
Textron 8,000 500
-----------
2,513
-----------
APPAREL/TEXTILES -- 0.3%
Liz Claiborne 5,000 209
Nike, Class B 10,000 392
Russell 3,100 82
-----------
683
-----------
AUTOMOTIVE -- 2.4%
Allied Signal 18,200 709
Chrysler 26,200 922
Dana 6,500 309
Echlin 8,300 300
- --------------------------------------------------------
DESCRIPTION SHARES VALUE (000)
- --------------------------------------------------------
Ford Motor 43,400 $ 2,113
General Motors 27,600 1,673
Paccar 3,000 157
TRW 5,000 267
-----------
6,450
-----------
BANKS -- 8.6%
Banc One 20,944 1,138
Bank of New York 13,000 752
BankAmerica 25,600 1,869
BankBoston 4,500 423
Bankers Trust New York 3,800 427
Barnett Banks of Florida 6,800 489
BB&T 5,000 320
Chase Manhattan 15,766 1,726
Citicorp 16,800 2,124
Comerica 3,700 334
Fifth Third Bancorp 4,500 368
First Chicago 12,701 1,061
First Union 21,060 1,079
Fleet Financial Group 9,801 734
Golden West Financial 2,000 196
H.F. Ahmanson 2,000 134
J.P. Morgan 6,000 677
Keycorp 7,800 552
MBNA 17,887 489
National City 6,800 447
NationsBank 27,000 1,642
Norwest 30,600 1,182
PNC Bank 13,900 793
Providian Financial 2,300 104
State Street 6,000 349
Suntrust Banks 8,400 600
Synovus Financial 3,000 98
U.S. Bancorp 8,746 979
Wachovia 7,100 576
Washington Mutual 9,100 581
Wells Fargo 3,433 1,165
-----------
23,408
-----------
BEAUTY PRODUCTS -- 2.7%
Avon Products 3,200 196
Colgate Palmolive 10,492 771
Ecolab 5,000 277
Gillette 20,500 2,059
Procter & Gamble 50,800 4,054
-----------
7,357
-----------
BROADCASTING, CABLE TV, NEWSPAPERS
& ADVERTISING -- 1.0%
CBS 21,500 633
Clear Channel Communications* 2,000 159
Comcast, Class A 14,200 448
Tele-Communications, Class A* 18,424 515
U.S. West Media Group* 21,800 629
Viacom, Class B* 10,526 436
-----------
2,820
-----------
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
47
<PAGE>
STATEMENT
OF
NET ASSETS
- --------------------------------------------------------------------------------
AS OF
DECEMBER 31, 1997
(UNAUDITED)
EQUITY INDEX FUND (CONTINUED)
- --------------------------------------------------------
DESCRIPTION SHARES VALUE (000)
- --------------------------------------------------------
BUILDING & CONSTRUCTION -- 0.3%
Centex 2,400 $ 151
Fluor 1,900 71
Foster Wheeler 3,300 89
Halliburton 9,200 478
McDermott International 3,400 125
-----------
914
-----------
BUILDING MATERIALS -- 0.0%
Owens Corning 2,800 96
-----------
CHEMICALS -- 2.3%
Air Products & Chemical 3,100 255
Dow Chemical 8,150 827
E.I. DuPont de Nemours 40,000 2,402
Eastman Chemical 5,700 340
FMC* 2,200 148
Great Lakes Chemical 300 13
Hercules 2,700 135
Monsanto 19,500 819
Morton International 1,600 55
Nalco Chemical 5,700 226
Praxair 5,500 247
Rohm & Haas 2,500 239
Sigma Aldrich 10,600 421
W.R. Grace & Company 3,100 249
-----------
6,376
-----------
COMMUNICATIONS EQUIPMENT -- 2.6%
Andrew * 9,000 216
Cabletron Systems* 5,800 87
Cisco Systems* 36,900 2,057
ITT Industries 7,000 220
ITT* 3,600 298
Lucent Technologies 23,300 1,861
Motorola 20,600 1,175
NextLevel Systems* 5,800 104
Northern Telecom 8,300 739
Tellabs* 6,200 328
-----------
7,085
-----------
COMPUTERS, SOFTWARE & SERVICES-- 7.7%
3COM* 12,000 419
Adobe Systems 4,000 165
Automatic Data Processing 9,400 577
Bay Networks* 9,000 230
Ceridian* 3,400 156
Compaq Computer* 26,250 1,481
Computer Associates
International 18,075 956
Computer Sciences* 1,900 159
Dell Computer* 12,400 1,042
Digital Equipment* 3,900 144
EMC* 14,200 390
Equifax 6,000 213
First Data 15,400 450
Harris Computer Systems 3,200 147
Hewlett Packard 37,300 2,331
International Business Machines 35,000 3,660
Microsoft* 43,100 5,571
Novell* 29,300 220
Oracle Systems* 36,862 822
- -------------------------------------------------------
DESCRIPTION SHARES VALUE (000)
- -------------------------------------------------------
Parametric Technology* 5,000 $ 237
Pitney Bowes 5,000 450
Seagate Technology* 7,200 139
Shared Medical Systems 2,400 158
Silicon Graphics* 21,000 261
Sun Microsystems* 11,200 447
Tandy 4,000 154
-----------
20,979
-----------
CONTAINERS & PACKAGING -- 0.2%
Crown Cork & Seal 3,700 185
Owens-Illinois* 9,000 341
-----------
526
-----------
DRUGS -- 8.4%
Abbott Labs 28,000 1,836
Allergan 4,300 144
American Home Products 22,800 1,744
Amgen* 9,600 520
Baxter International 9,800 494
Bristol-Myers Squibb 37,040 3,505
Eli Lilly 39,800 2,771
Merck 44,400 4,717
Pfizer 48,200 3,594
Pharmacia & Upjohn 16,255 595
Schering Plough 27,200 1,690
Warner Lambert 9,400 1,166
-----------
22,776
-----------
ELECTRICAL EQUIPMENT -- 3.5%
Emerson Electric 14,600 824
General Electric 117,700 8,636
W.W. Grainger 2,000 194
-----------
9,654
-----------
ELECTRICAL SERVICES -- 2.6%
American Electric Power 5,300 274
Baltimore Gas & Electric 4,700 160
Carolina Power & Light 10,600 450
Central & South West 5,400 146
Cinergy 4,600 176
Consolidated Edison of New York 5,300 217
Dominion Resources of Virginia 5,500 234
DTE Energy 4,200 146
Duke Power 12,986 719
Edison International 13,400 364
Entergy 10,200 305
Firstenergy* 5,000 145
FPL Group 6,100 361
GPU 4,200 177
Houston Industries 13,343 356
Niagara Mohawk Power* 26,200 275
Pacificorp 6,400 175
PECO Energy 16,000 388
PG&E 15,500 472
PP&L Resources 5,500 132
Public Service Enterprise Group 5,500 174
Southern 20,100 520
Texas Utilities 8,785 365
Unicom 4,800 148
Union Electric Power 4,300 186
-----------
7,065
-----------
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
48
<PAGE>
[SQUARE BULLET] COREFUND EQUITY FUNDS
- --------------------------------------------------------------------------------
- --------------------------------------------------------
DESCRIPTION SHARES VALUE (000)
- --------------------------------------------------------
ENTERTAINMENT -- 1.1%
King World Productions 6,600 $ 381
Walt Disney 24,926 2,469
-----------
2,850
-----------
ENVIRONMENTAL SERVICES -- 0.3%
Browning Ferris Industries 5,900 218
Laidlaw 14,000 191
Waste Management 15,200 418
-----------
827
-----------
FINANCIAL SERVICES -- 3.9%
Allstate 15,700 1,427
American Express 16,600 1,482
Beneficial 2,400 199
Charles Schwab 9,600 403
Countrywide Credit Industries 6,000 257
FHLMC 30,200 1,267
FNMA 38,800 2,214
Green Tree Financial 5,900 155
Household International 4,100 523
Mellon Bank 11,400 691
Merrill Lynch 11,200 817
Morgan Stanley, Dean Witter,
Discover 19,330 1,143
-----------
10,578
-----------
FOOD, BEVERAGE & TOBACCO -- 8.0%
Anheuser Busch 16,400 722
Archer Daniels Midland 17,277 375
Campbell Soup 16,200 942
Coca Cola 91,600 6,103
ConAgra 14,600 479
Coors, Adolph, Class B 5,600 186
CPC International 5,400 583
Fortune Brands 6,700 248
General Mills 5,900 423
H.J. Heinz 16,650 846
Hershey Foods 4,000 248
Kellogg 15,200 754
Pepsico 56,800 2,070
Philip Morris 89,400 4,051
Ralston-Purina Group 3,900 362
Sara Lee 16,900 952
Seagram 12,300 397
Unilever 23,600 1,474
UST 10,200 377
Wrigley, William Jr. 4,000 318
-----------
21,910
-----------
GAS/NATURAL GAS -- 0.9%
Coastal 2,500 155
Columbia Gas Systems 3,500 275
Consolidated Natural Gas 6,000 363
Enron 11,200 465
Nicor 3,700 156
Oneok 5,900 238
Pacific Enterprises 3,800 143
Peoples Energy 4,100 161
- --------------------------------------------------------
DESCRIPTION SHARES VALUE (000)
- --------------------------------------------------------
Sonat 6,800 $ 311
Williams 7,500 213
-----------
2,480
-----------
GLASS PRODUCTS -- 0.3%
Corning 7,300 271
PPG Industries 7,300 417
-----------
688
-----------
HOTELS & LODGING -- 0.2%
Harrah's Entertainment* 10,000 189
Hilton Hotels 8,500 253
Marriott International 2,900 201
-----------
643
-----------
HOUSEHOLD FURNITURE & FIXTURES-- 0.2%
Armstrong World Industries 1,600 120
Masco 3,500 178
Newell 3,600 153
Sherwin Williams 4,600 128
-----------
579
-----------
HOUSEHOLD PRODUCTS -- 0.3%
Clorox 5,800 459
Whirlpool 5,700 313
-----------
772
-----------
INSURANCE -- 4.6%
Aetna 5,308 375
American General 9,716 525
American International Group 25,500 2,773
AON 5,250 308
Chubb 6,600 499
Cigna 2,900 502
Cincinnati Financial 3,000 422
Conseco 5,600 254
General Re 2,400 509
Hartford Financial Services Group 3,100 290
Jefferson-Pilot 4,500 350
Lincoln National 2,100 164
Loews 3,400 361
Marsh and McLennan 7,400 552
MBIA 3,800 254
MGIC Investment 5,000 332
Progressive of Ohio 2,200 264
Safeco 8,400 409
Sunamerica 6,750 289
Transamerica 2,000 213
Travelers 39,579 2,132
United Healthcare 5,100 253
Unum 6,000 326
USF&G 13,500 298
-----------
12,654
-----------
LUMBER & WOOD PRODUCTS -- 0.1%
Georgia Pacific 2,700 164
Potlatch 2,100 90
Timber Group* 2,700 61
-----------
315
-----------
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
49
<PAGE>
STATEMENT
OF
NET ASSETS
- --------------------------------------------------------------------------------
AS OF
DECEMBER 31, 1997
(UNAUDITED)
EQUITY INDEX FUND (CONTINUED)
- --------------------------------------------------------
DESCRIPTION SHARES VALUE (000)
- --------------------------------------------------------
MACHINERY -- 1.8%
Baker Hughes 6,000 $ 262
Black & Decker 3,500 137
Brunswick 9,500 288
Case 3,000 181
Caterpillar 13,800 670
Crane 4,650 202
Deere 7,800 455
Dover 5,600 202
Dresser Industries 4,500 189
Eaton 2,000 179
Illinois Tool Works 8,200 493
Ingersoll Rand 3,600 146
Snap-On Tools 4,050 177
Stanley Works 3,600 170
Tenneco 5,000 198
Timken 5,000 172
Tyco International Limited 17,800 802
-----------
4,923
-----------
MEASURING DEVICES -- 0.6%
Honeywell 4,400 301
Johnson Controls 9,000 430
KLA-Tencor* 3,000 116
Millipore 3,400 115
Parker Hannifin 4,275 196
Perkin Elmer 2,000 142
Tektronix 5,250 208
Thermo Electron* 5,100 227
-----------
1,735
-----------
MEDICAL INFORMATION SYSTEMS-- 0.1%
HBO 7,500 360
-----------
MEDICAL PRODUCTS & SERVICES-- 2.7%
Bausch & Lomb 2,000 79
Biomet* 7,400 190
Boston Scientific* 5,800 266
Cardinal Health 4,000 301
Columbia/HCA Healthcare 22,850 677
Guidant 5,000 311
Healthsouth* 11,000 305
Humana* 8,500 176
Johnson & Johnson 48,000 3,162
Mallinckrodt 4,500 171
Medtronic 16,000 837
St. Jude Medical* 7,000 214
Tenet Healthcare* 12,900 427
U.S. Surgical 6,000 176
-----------
7,292
-----------
METALS & MINING -- 0.6%
Alcan Aluminum 7,700 213
Aluminum Company of America 5,200 366
Asarco 3,300 74
Cyprus AMAX Minerals 7,400 114
Freeport-McMoran Copper
and Gold, Class B 6,000 95
Inco 7,600 129
Newmont Mining 10,770 316
Phelps Dodge 1,600 100
Reynolds Metals 3,500 210
-----------
1,617
-----------
- --------------------------------------------------------
DESCRIPTION SHARES VALUE (000)
- --------------------------------------------------------
MISCELLANEOUS BUSINESS SERVICES-- 0.4%
Cendant* 28,502 $ 980
National Service Industries 3,000 149
-----------
1,129
-----------
MISCELLANEOUS CHEMICAL PRODUCTS-- 0.1%
Raychem 3,800 164
-----------
MISCELLANEOUS CONSUMER SERVICES-- 0.2%
H&R Block 7,000 314
Service International 5,800 214
-----------
528
-----------
MISCELLANEOUS MANUFACTURING-- 0.2%
Hasbro 3,600 113
Mattel 8,250 307
-----------
420
-----------
PAPER & PAPER PRODUCTS -- 1.7%
Avery Dennison 4,600 206
Champion International 2,200 100
Fort James 6,700 256
International Paper 12,035 519
Kimberly Clark 23,704 1,169
Mead 6,600 185
Minnesota Mining
& Manufacturing 14,600 1,198
Stone Container* 3,800 40
Temple Inland 1,000 52
Union Camp 4,750 255
Westvaco 3,150 99
Weyerhaeuser 6,006 295
Willamette Industries 3,800 122
-----------
4,496
-----------
PETROLEUM REFINING -- 8.0%
Amerada Hess 2,100 115
Amoco 17,400 1,481
Ashland 4,300 231
Atlantic Richfield 12,000 962
Burlington Resources 6,400 287
Chevron 23,300 1,794
Exxon 90,600 5,544
Helmerich and Payne 3,300 224
Mobil 28,800 2,079
Occidental Petroleum 9,900 290
Oryx Energy* 8,400 214
Phillips Petroleum 7,200 350
Rowan Companies* 10,000 305
Royal Dutch Petro 75,500 4,091
Schlumberger 17,800 1,433
Sun 8,200 345
Texaco 18,600 1,011
Union Pacific Resources Group 8,629 209
Unocal 8,900 345
USX Marathon Group 9,500 321
Western Atlas* 3,000 222
-----------
21,853
-----------
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
50
<PAGE>
[SQUARE BULLET] COREFUND EQUITY FUNDS
- --------------------------------------------------------------------------------
- --------------------------------------------------------
DESCRIPTION SHARES VALUE (000)
- --------------------------------------------------------
PHOTOGRAPHIC EQUIPMENT & SUPPLIES-- 0.6%
Eastman Kodak 11,300 $ 687
Polaroid 3,000 146
Xerox 10,800 797
-----------
1,630
-----------
PRECIOUS METALS -- 0.1%
Barrick Gold 12,000 224
Echo Bay Mines* 9,100 22
Placer Dome Group 5,400 69
-----------
315
-----------
PRINTING & PUBLISHING -- 1.3%
Deluxe 2,500 86
Donnelly R.R. & Sons 9,200 343
Gannett 9,600 593
Knight-Ridder 3,000 156
McGraw-Hill 2,200 163
Meredith 6,000 214
New York Times, Class A 3,200 212
Time Warner, Class A 19,800 1,228
Times Mirror, Class A 5,900 363
Tribune 3,000 187
-----------
3,545
-----------
PROFESSIONAL SERVICES -- 0.2%
Cognizant 11,000 490
Dun & Bradstreet 4,700 145
-----------
635
-----------
RAILROADS -- 0.7%
Burlington Northern Santa Fe 5,464 508
CSX 8,200 443
Norfolk Southern 13,800 425
Union Pacific 8,300 518
-----------
1,894
-----------
RESTAURANTS -- 0.6%
Darden Restaurants 11,800 148
McDonald's 24,900 1,189
Tricon Global Restaurants* 4,000 116
Wendy's International 5,900 142
-----------
1,595
-----------
RETAIL -- 4.8%
Albertson's 8,400 398
American Stores 6,400 132
Autozone* 10,000 290
Charming Shoppes* 20,000 94
Costco Companies* 10,900 486
CVS 6,400 410
Dayton-Hudson 7,800 527
Dillards, Class A 9,700 342
Federated Department Stores* 5,700 245
Gap 14,700 521
Giant Food, Class A 3,900 131
Harcourt General 5,300 290
Home Depot 25,599 1,507
J.C. Penney 8,600 519
K Mart* 16,950 196
- --------------------------------------------------------
DESCRIPTION SHARES VALUE (000)
- --------------------------------------------------------
Kroger* 6,200 $ 229
Limited 9,500 242
Lowes 5,500 262
May Department Stores 6,900 364
Mercantile Stores 500 30
Nordstrom 6,000 362
Rite Aid 3,700 217
Sears Roebuck 13,500 611
TJX Companies 9,000 309
Toys R Us* 9,800 308
Wal Mart Stores 82,600 3,258
Walgreen 15,200 477
Winn Dixie Stores 5,000 218
Woolworth* 7,500 153
-----------
13,128
-----------
RUBBER & PLASTIC -- 0.3%
Goodyear Tire & Rubber 5,380 342
Reebok International 7,300 210
Rubbermaid 8,500 213
Tupperware 5,700 159
-----------
924
-----------
SEMI-CONDUCTORS/INSTRUMENTS-- 2.3%
Advanced Micro Devices* 7,500 135
AMP 6,200 260
Applied Materials* 13,200 398
Intel 60,200 4,229
LSI Logic* 10,000 198
National Semiconductor* 5,600 145
Texas Instruments 13,200 594
Thomas & Betts 5,000 236
-----------
6,195
-----------
SPECIALTY MACHINERY -- 0.1%
Cooper Industries 6,000 294
-----------
STEEL & STEEL WORKS -- 0.2%
Allegheny Teledyne 8,300 215
Nucor 6,000 290
USX U.S. Steel Group 1,900 59
-----------
564
-----------
TELEPHONES & TELECOMMUNICATION-- 7.0%
AT&T 58,736 3,598
Airtouch Communications* 19,100 794
Alltel 6,000 246
Ameritech 21,800 1,755
Bell Atlantic 28,612 2,604
Bellsouth 36,100 2,033
GTE 33,600 1,756
MCI Communications 24,458 1,047
SBC Telecommunications 33,586 2,460
Sprint 14,000 821
US West 17,600 794
Worldcom* 36,500 1,104
-----------
19,012
-----------
TRUCKING -- 0.1%
Ryder System 5,000 164
-----------
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
51
<PAGE>
STATEMENT
OF
NET ASSETS
- --------------------------------------------------------------------------------
AS OF
DECEMBER 31, 1997
(UNAUDITED)
EQUITY INDEX FUND (CONCLUDED)
- --------------------------------------------------------
DESCRIPTION SHARES/PAR (000) VALUE (000)
- --------------------------------------------------------
WHOLESALE -- 0.3%
Ikon Office Solutions 10,000 $ 281
Sysco 10,000 456
-----------
737
-----------
TOTAL COMMON STOCKS
(Cost $155,836) 272,255
-----------
REPURCHASE AGREEMENT -- 0.3%
Aubrey Lanston
6.50%, dated 12/31/97,
matures 01/02/98,
repurchase price $856,309
(collateralized by various U.S.
Treasury Notes, ranging
in par value $415,000-$440,000,
5.625%-8.25%, 07/15/98-
12/31/99; total market
value $876,803) $856 856
-----------
TOTAL REPURCHASE AGREEMENT
(Cost $856) 856
-----------
TOTAL INVESTMENTS -- 100.2%
(Cost $156,692) 273,111
-----------
OTHER ASSETS AND LIABILITIES,
NET-- (0.2%) (425)
-----------
NET ASSETS:
Portfolio Shares -- Class Y ($0.001 par
value -- 500 million authorized)
based on 6,628,613 outstanding shares 146,711
Portfolio Shares -- Class A ($0.001 par
value -- 500 million authorized)
based on 229,839 outstanding shares 8,338
Portfolio Shares -- Class B ($0.001 par
value -- 500 million authorized)
based on 18,981 outstanding shares 745
Accumulated Net Realized Gain
on Investments 469
Net Unrealized Appreciation
on Investments 116,419
Undistributed Net Investment Income 4
-----------
TOTAL NET ASSETS-- 100.0% $272,686
===========
NET ASSET VALUE, OFFERING AND REDEMPTION
PRICE PER SHARE -- CLASS Y $39.65
===========
NET ASSET VALUE AND REDEMPTION
PRICE PER SHARE-- CLASS A $39.66
===========
NET ASSET VALUE AND OFFERING
PRICE PER SHARE-- CLASS B $39.12
===========
* NON INCOME PRODUCING SECURITY
ADR --AMERICAN DEPOSITORY RECEIPT
FHLMC -- FEDERAL HOME LOAN MORTGAGE CORPORATION
FNMA -- FEDERAL NATIONAL MORTGAGE ASSOCIATION
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
CORE EQUITY FUND
[PIE CHART OMITTED]
MISCELLANEOUS 9%
UTILITIES 9%
REAL ESTATE INVESTMENT TRUST 3%
OIL-ENERGY 7%
FINANCIAL 13%
CHEMICALS & DRUGS 8%
CONSUMER PRODUCTS 12%
DURABLE GOODS 39%
% OF TOTAL PORTFOLIO INVESTMENTS
- --------------------------------------------------------
DESCRIPTION SHARES VALUE (000)
- --------------------------------------------------------
COMMON STOCKS -- 99.5%
AIRCRAFT -- 2.1%
Boeing 165,500 $ 8,099
Textron 60,000 3,750
-----------
11,849
-----------
AEROSPACE & DEFENSE -- 0.0%
Raytheon Company, Class A* 1,434 71
-----------
AUTOMOTIVE -- 2.4%
Allied Signal 120,000 4,672
Ford Motor 155,000 7,547
General Motors 22,500 1,364
-----------
13,583
-----------
BANKS -- 2.1%
BankAmerica 42,000 3,066
NationsBank 153,200 9,316
-----------
12,382
-----------
BROADCASTING, CABLE TV, NEWSPAPERS
& ADVERTISING -- 0.6%
Emmis Broadcasting* 77,500 3,536
-----------
BUILDING & CONSTRUCTION -- 1.1%
Clayton Homes 250,000 4,500
Foster Wheeler 62,500 1,691
-----------
6,191
-----------
CHEMICALS -- 2.8%
Hercules 20,000 1,001
IMC Global 115,000 3,766
Monsanto 99,000 4,158
Praxair 155,000 6,975
-----------
15,900
CLEANING PRODUCTS -- 0.1%
USA Detergents* 56,500 459
-----------
52
<PAGE>
[SQUARE BULLET] COREFUND EQUITY FUNDS
- --------------------------------------------------------------------------------
- -------------------------------------------------------
DESCRIPTION SHARES VALUE (000)
- -------------------------------------------------------
COMMUNICATIONS EQUIPMENT -- 1.2%
Lucent Technologies 89,000 $ 7,109
-----------
COMPUTERS, SOFTWARE & SERVICES -- 8.4%
3COM* 147,500 5,153
America Online* 35,000 3,122
Cabletron Systems* 86,000 1,290
Computer Associates
International 97,500 5,155
International Business
Machines 142,500 14,900
Microsoft* 93,000 12,020
Storage Technology* 111,400 6,900
-----------
48,540
-----------
CONTAINERS & PACKAGING -- 1.1%
Crown Cork & Seal 125,000 6,266
-----------
DRUGS -- 3.3%
Biogen* 165,000 6,002
Eli Lilly & Co. 109,400 7,617
Mylan Laboratories 265,000 5,548
-----------
19,167
-----------
ELECTRICAL SERVICES -- 2.1%
FPL Group 52,500 3,107
Pinnacle West Capital 125,000 5,297
Unicom 120,000 3,690
-----------
12,094
-----------
ENVIRONMENTAL SERVICES -- 1.5%
Browning Ferris Industries 240,000 8,880
-----------
FOOD, BEVERAGE & TOBACCO -- 9.2%
Canandaigua Wine, Class A* 195,005 10,798
Chiquita Brands International 700,000 11,419
Nabisco Holdings, Class A 375,400 18,183
Philip Morris 75,500 3,421
RJR Nabisco Holdings 249,300 9,349
-----------
53,170
-----------
GAS/NATURAL GAS -- 0.4%
Sonat 47,700 2,182
-----------
HEALTHCARE SERVICES -- 2.2%
Medpartners* 579,700 12,971
-----------
HOTELS & LODGING -- 1.7%
Felcor Suite Hotels 145,000 5,147
Hilton Hotels 150,000 4,463
-----------
9,610
-----------
INSURANCE -- 11.9%
Aetna 85,000 5,998
Conseco 270,000 12,268
Everest Reinsurance Holdings 284,000 11,715
General Re 34,000 7,208
Hartford Financial
Services Group 127,300 11,911
Hartford Life, Class A 108,000 4,894
- --------------------------------------------------------
DESCRIPTION SHARES VALUE (000)
- --------------------------------------------------------
Travelers 170,000 $ 9,159
Travelers Property Casualty 119,500 5,258
-----------
68,411
-----------
MACHINERY -- 2.1%
Case 45,000 2,720
Cummins Engine 51,800 3,059
Harnischfeger Industries 95,000 3,355
Thermo Electron* 65,000 2,893
-----------
12,027
-----------
MEDICAL PRODUCTS & SERVICES-- 3.2%
Alza* 175,000 5,567
Boston Scientific* 140,200 6,432
Human Genome Sciences* 43,600 1,733
United States Surgical 156,400 4,584
-----------
18,316
-----------
METALS & MINING -- 1.1%
Freeport-McMoran Copper and
Gold, Class B 130,000 2,048
Potash of Saskatchewan 54,000 4,482
-----------
6,530
-----------
MISCELLANEOUS BUSINESS SERVICES -- 3.5%
Cendant 589,006 20,247
-----------
MISCELLANEOUS MANUFACTURING -- 3.3%
Metromedia International
Group* 275,000 2,613
General Electric 207,500 15,225
ITT Industries 47,500 1,490
-----------
19,328
-----------
PETROLEUM & FUEL PRODUCTS -- 3.2%
Apache 80,000 2,805
Reading & Bates* 70,000 2,931
Repsol ADR 18,800 800
Tidewater 75,000 4,134
Triton Energy* 70,000 2,043
USX Marathon Group 165,000 5,569
-----------
18,282
-----------
PETROLEUM REFINING -- 6.0%
Ashland 60,000 3,221
British Petroleum ADR 138,176 11,011
Mobil 245,000 17,686
Texaco 55,000 2,991
-----------
34,909
-----------
PHOTOGRAPHIC EQUIPMENT & SUPPLIES -- 0.0%
Xerox 1,600 118
-----------
PRINTING & PUBLISHING -- 0.7%
Central Newspaper 21,500 1,590
News ADR 110,000 2,186
-----------
3,776
-----------
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
53
<PAGE>
STATEMENT
OF
NET ASSETS
- --------------------------------------------------------------------------------
AS OF
DECEMBER 31, 1997
(UNAUDITED)
CORE EQUITY FUND (CONCLUDED)
- --------------------------------------------------------
DESCRIPTION SHARES VALUE (000)
- --------------------------------------------------------
RAILROADS -- 0.6%
CSX 37,000 $ 1,998
Union Pacific 25,000 1,561
-----------
3,559
-----------
REAL ESTATE -- 2.5%
Equity Residential
Properties Trust 105,000 5,309
Glenborough Realty Trust 202,400 5,996
Prentiss Properties Trust 110,000 3,073
-----------
14,378
-----------
RESTAURANTS -- 1.0%
Darden Restaurants 399,700 4,996
Lone Star Steakhouse
& Saloon* 45,000 788
-----------
5,784
-----------
RETAIL -- 4.7%
CML Group 275,000 911
Corporate Express* 95,000 1,223
Dillards, Class A 37,500 1,322
General Nutrition* 287,100 9,761
Lowes 110,000 5,246
Pep Boys - Manny,
Moe & Jack 185,000 4,417
Saks Holdings* 175,000 3,620
Staples* 15,100 419
-----------
26,919
-----------
RUBBER & PLASTIC -- 0.8%
Goodyear Tire & Rubber 70,000 4,454
-----------
SEMI-CONDUCTORS/INSTRUMENTS-- 2.9%
Intel 150,000 10,538
National Semiconductor* 127,500 3,307
VLSI Technology* 135,000 3,189
-----------
17,034
-----------
TELEPHONES & TELECOMMUNICATION -- 8.7%
Airtouch Communications* 460,000 19,119
McLeodUSA, Class A* 127,500 4,080
Qualcomm* 101,800 5,141
Worldcom* 726,000 21,962
-----------
50,302
-----------
WATER TREATMENT -- 1.0%
U.S. Filter* 190,000 5,688
-----------
TOTAL COMMON STOCKS
(Cost $441,850) 574,022
-----------
TOTAL INVESTMENTS -- 99.5%
(Cost $441,851) 574,022
-----------
OTHER ASSETS AND LIABILITIES,
NET-- 0.5% 2,747
-----------
- --------------------------------------------------------
DESCRIPTION VALUE (000)
- --------------------------------------------------------
NET ASSETS:
Portfolio Shares -- Class Y ($0.001 par
value -- 50 million authorized) based on
27,068,563 outstanding shares $ 415,785
Portfolio Shares -- Class A ($0.001 par
value -- 50 million authorized) based on
924,049 outstanding shares 13,559
Portfolio Shares -- Class B ($0.001 par
value -- 50 million authorized) based on
7,283 outstanding shares 149
Accumulated Net Realized Gain
on Investments 15,119
Net Unrealized Appreciation
on Investments 132,172
Distributions in Excess of Net
Investment Income (15)
-----------
TOTAL NET ASSETS-- 100.0% $576,769
===========
NET ASSET VALUE, OFFERING AND REDEMPTION
PRICE PER SHARE -- CLASS Y $20.60
===========
NET ASSET VALUE AND REDEMPTION
PRICE PER SHARE-- CLASS A $20.61
===========
NET ASSET VALUE AND OFFERING
PRICE PER SHARE-- CLASS B $18.31
===========
* NON-INCOME PRODUCING SECURITY
ADR -- AMERICAN DEPOSITORY RECEIPT
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
54
<PAGE>
[SQUARE BULLET] COREFUND EQUITY FUNDS
- --------------------------------------------------------------------------------
GROWTH EQUITY FUND
[PIE CHART OMITTED]
Miscellaneous 5%
Utilities 2%
Retail 12%
Oil-Energy 3%
Financial 19%
Cash Equivalents 3%
Chemicals & Drugs 14%
Consumer Products 6%
Durable Goods 36%
% OF TOTAL INVESTMENTS
- --------------------------------------------------------
DESCRIPTION SHARES VALUE (000)
- --------------------------------------------------------
COMMON STOCKS -- 98.9%
BANKS -- 8.3%
BankAmerica 24,000 $ 1,752
Barnett Banks of Florida 50,000 3,594
Citicorp 13,643 1,725
Crestar Financial 73,000 4,161
Norwest 70,000 2,704
-----------
13,936
-----------
BEAUTY PRODUCTS -- 2.2%
Colgate Palmolive 24,400 1,793
Gillette 18,600 1,868
-----------
3,661
-----------
BROADCASTING, CABLE TV, NEWSPAPERS
& ADVERTISING -- 1.2%
CBS 70,400 2,072
-----------
COMMUNICATIONS EQUIPMENT -- 2.2%
Cisco Systems* 65,850 3,671
-----------
COMPUTERS, SOFTWARE & SERVICES-- 12.2%
America Online* 45,800 4,085
BMC Software* 68,000 4,463
Compaq Computer* 54,100 3,053
Computer Associates
International 65,889 3,484
Microsoft* 11,932 1,542
Peoplesoft* 100,000 3,900
-----------
20,527
-----------
DRUGS -- 7.3%
Johnson & Johnson 49,000 3,228
Merck 16,000 1,700
Schering Plough 56,000 3,479
SmithKline Beecham ADR 77,100 3,966
-----------
12,373
-----------
- --------------------------------------------------------
DESCRIPTION SHARES VALUE (000)
- --------------------------------------------------------
ELECTRICAL EQUIPMENT -- 5.4%
General Electric 47,178 $ 3,462
Honeywell 47,500 3,254
Illinois Tool Works 40,000 2,405
-----------
9,121
-----------
FINANCIAL SERVICES -- 4.6%
FHLMC 85,000 3,565
FNMA 74,656 4,260
-----------
7,825
-----------
FOOD, BEVERAGE & TOBACCO -- 4.9%
ConAgra 89,000 2,920
CPC International* 16,300 1,760
Hershey Foods 56,900 3,524
-----------
8,204
-----------
HEALTHCARE SERVICES -- 2.8%
Health Management
Associates* 186,037 4,697
-----------
HOUSEHOLD PRODUCTS -- 1.6%
Sunbeam Oster 62,100 2,616
-----------
INSURANCE -- 4.3%
Allstate 47,400 4,307
American International Group 27,600 3,002
-----------
7,309
-----------
MEDICAL INFORMATION SYSTEMS -- 2.2%
HBO 77,000 3,696
-----------
MEDICAL PRODUCTS & SERVICES-- 4.3%
Cardinal Health 51,600 3,876
Guidant 27,000 1,681
Medtronic 33,000 1,726
-----------
7,283
-----------
MISCELLANEOUS CHEMICAL PRODUCTS-- 0.1%
Solutia* 6,820 182
-----------
MISCELLANEOUS CONSUMER SERVICES -- 0.9%
Corestaff* 54,000 1,431
-----------
PETROLEUM REFINING -- 3.5%
Halliburton 65,000 3,376
Schlumberger 30,200 2,431
-----------
5,807
-----------
PRINTING & PUBLISHING -- 2.1%
Gannett 58,500 3,616
-----------
RETAIL -- 14.4%
Costco* 82,000 3,659
Dayton-Hudson 76,500 5,164
Gap 135,000 4,784
Home Depot 61,000 3,591
Nordstrom 55,000 3,321
Walgreen 122,000 3,828
-----------
24,347
-----------
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
55
<PAGE>
STATEMENT
OF
NET ASSETS
- --------------------------------------------------------------------------------
AS OF
DECEMBER 31, 1997
(UNAUDITED)
GROWTH EQUITY FUND (CONCLUDED)
- --------------------------------------------------------
DESCRIPTION SHARES/PAR (000) VALUE (000)
- --------------------------------------------------------
TECHNOLOGY, SERVICES -- 4.3%
Automatic Data Processing 60,400 $ 3,707
Paychex 69,000 3,493
-----------
7,200
-----------
TELEPHONES & TELECOMMUNICATION-- 10.1%
Brooks Fiber Properties* 60,459 3,325
ICG Communications* 68,100 1,856
McLeod USA, Class A* 82,000 2,624
Qualcomm* 53,000 2,677
Qwest Communications Int'l* 6,565 391
Teleport Communications
Group* 58,200 3,194
Worldcom* 100,300 3,034
-----------
17,101
-----------
TOTAL COMMON STOCKS
(Cost $111,339) 166,675
-----------
REPURCHASE AGREEMENTS -- 2.7%
Aubrey Lanston
6.50%, dated 12/31/97,
matures 01/02/98,
repurchase price $1,516,547
(collateralized by U.S. Treasury
Note, par value $1,550,000,
5.625%, 12/31/99; market
value $1,550,930) $1,516 1,516
Hong Kong Shanghai Bank
6.40%, dated 12/31/97, matures
01/02/98, repurchase price
$1,516,539 (collateralized by
U.S. Treasury Note, par value
$1,470,000, 6.625%, 07/31/01;
market value $1,554,819) 1,516 1,516
Morgan Stanley
6.20%, dated 12/31/97,
matures 01/02/98,
repurchase price $1,516,522
(collateralized by U.S. Treasury
Note, par value $1,555,000,
5.50%, 12/31/00; market
value $1,549,247) 1,516 1,516
-----------
TOTAL REPURCHASE AGREEMENTS
(Cost $4,548) 4,548
-----------
TOTAL INVESTMENTS -- 101.6%
(Cost $115,887) 171,223
-----------
OTHER ASSETS AND LIABILITIES,
NET-- (1.6%) (2,725)
-----------
- --------------------------------------------------------
DESCRIPTION VALUE (000)
- --------------------------------------------------------
NET ASSETS:
Portfolio Shares -- Class Y ($0.001 par
value -- 100 million authorized) based
on 9,962,047 outstanding shares $103,338
Portfolio Shares -- Class A ($0.001 par
value -- 100 million authorized) based
on 350,144 outstanding shares 4,018
Portfolio Shares -- Class B ($0.001 par
value -- 100 million authorized) based
on 6,248 outstanding shares 109
Accumulated Net Realized Gain
on Investments 5,833
Net Unrealized Appreciation
on Investments 55,336
Distributions in Excess of Net
Investment Income (136)
-----------
TOTAL NET ASSETS-- 100.0% $168,498
===========
NET ASSET VALUE, OFFERING AND REDEMPTION
PRICE PER SHARE -- CLASS Y $16.33
===========
NET ASSET VALUE AND REDEMPTION
PRICE PER SHARE-- CLASS A $16.27
===========
NET ASSET VALUE AND OFFERING
PRICE PER SHARE-- CLASS B $16.19
===========
* NON-INCOME PRODUCING SECURITY
ADR -- AMERICAN DEPOSITORY RECEIPT
FHLMC -- FEDERAL HOME LOAN MORTGAGE CORPORATION
FNMA -- FEDERAL NATIONAL MORTGAGE ASSOCIATION
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
56
<PAGE>
[SQUARE BULLET] COREFUND EQUITY FUNDS
- --------------------------------------------------------------------------------
SPECIAL EQUITY FUND
[PIE CHART OMITTED]
Miscellaneous 11%
Utilities 3%
Retail 1%
Real Estate Investment Trust 6%
Financial 4%
Cash Equivalents 3%
Chemicals & Drugs 8%
Consumer Products 7%
Durable Goods 57%
% OF TOTAL INVESTMENTS
- --------------------------------------------------------
DESCRIPTION SHARES VALUE (000)
- --------------------------------------------------------
COMMON STOCKS -- 96.7%
AIR TRANSPORTATION -- 0.9%
Midway Airlines 46,500 $ 703
---------
AIRCRAFT -- 0.4%
Boeing 6,750 330
---------
APPAREL/TEXTILES -- 0.6%
Haggar 20,000 315
Mothers Work* 17,500 138
---------
453
---------
AUTOMOTIVE -- 1.9%
Earl Scheib* 4,900 39
Ford Motor 20,000 974
Noble International* 46,500 416
Walbro 3,000 40
---------
1,469
---------
BROADCASTING, CABLE TV, NEWSPAPERS
& ADVERTISING -- 0.1%
@entertainment, Inc* 4,400 49
---------
BUILDING & CONSTRUCTION -- 3.9%
Comfort Systems USA Inc* 14,500 286
Foster Wheeler 20,000 541
Jacobs Engineering Group* 29,500 749
Royal Group Technologies Ltd* 27,500 638
Shaw Group* 35,000 805
---------
3,019
---------
CHEMICALS -- 0.2%
Kinark* 57,500 172
---------
COMMUNICATIONS EQUIPMENT -- 3.2%
Ciena* 10,700 654
ITT Industries 5,000 157
Scientific-Atlanta 31,000 519
VDI Media* 120,000 1,155
---------
2,485
---------
- --------------------------------------------------------
DESCRIPTION SHARES VALUE (000)
- --------------------------------------------------------
COMPUTERS, SOFTWARE & SERVICES-- 4.6%
America Online* 8,000 $ 713
Box Hill Systems* 27,900 291
Cabletron Systems* 20,000 300
Computer Associates
International 6,000 317
Gametek* 10,000 --
International Business
Machines 4,500 471
Mecon* 62,000 442
Mylex* 75,000 675
Storage Technology* 4,900 303
---------
3,512
---------
CONTAINERS & PACKAGING -- 0.2%
Cronos Group* 25,900 129
Silgan Holdings* 1,000 32
---------
161
---------
DRUGS -- 9.9%
Anesta* 45,200 740
Aphton* 52,500 532
Cellegy Pharmaceuticals Inc* 46,500 389
ChiRex* 42,000 740
Collagenex Pharmaceuticals* 46,300 579
Flamel Technologies (ADR)* 97,700 177
Guilford Pharmaceuticals* 40,500 815
Hybridon* 4,500 13
Ilex Oncology* 31,500 232
Isis Pharmaceutical* 27,300 336
Megabios Corp* 41,850 596
Pharmaceutical Resources* 105,000 157
Roberts Pharmaceuticals* 12,500 120
Scios Nova* 218,200 2,182
---------
7,608
---------
ELECTRICAL EQUIPMENT -- 4.3%
Kuhlman 32,500 1,272
Magnetek* 65,000 1,268
UCAR International* 18,500 739
---------
3,279
---------
ELECTRONICS -- 0.5%
Lam Research* 12,700 371
Smartflex Systems* 2,300 22
---------
393
---------
ENTERTAINMENT -- 1.5%
Meridian Sports* 17,300 13
Mikohn Gaming* 110,000 784
Sports Club* 38,000 352
---------
1,149
---------
ENVIRONMENTAL SERVICES -- 1.1%
Harding Lawson
Associates Group* 40,300 413
Philip Services* 32,500 467
---------
880
---------
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
57
<PAGE>
STATEMENT
OF
NET ASSETS
- --------------------------------------------------------------------------------
AS OF
DECEMBER 31, 1997
(UNAUDITED)
SPECIAL EQUITY FUND (CONTINUED)
- --------------------------------------------------------
DESCRIPTION SHARES VALUE (000)
- --------------------------------------------------------
FINANCIAL SERVICES -- 4.1%
Aames Financial 46,500 $ 602
Affiliated Managers Group* 11,160 324
Consolidation Cap Corp* 55,800 1,133
Delta Financial* 34,700 464
Imperial Credit* 41,800 611
---------
3,134
---------
FOOD, BEVERAGE & TOBACCO -- 0.9%
Cuisine Solutions* 21,000 21
Philip Morris 300 14
RJR Nabisco Holdings 16,700 626
---------
661
---------
HOTELS & LODGING -- 1.1%
American Skiing Corp* 4,650 69
John Q. Hammons Hotels* 9,600 86
Prime Hospitality* 31,500 642
U.S. Franchise Systems,
Class A* 4,500 45
---------
842
---------
HOUSEHOLD FURNISHINGS -- 1.4%
O'Sullivan 45,000 478
Winsloew Furniture* 44,180 641
---------
1,119
---------
INSURANCE -- 4.1%
Arm Financial 4,500 119
Conseco 14,000 636
Everest Reinsurance Holdings 21,300 879
Travelers 13,750 741
Travelers Property Casualty 18,100 796
---------
3,171
---------
MACHINERY -- 2.1%
Case 11,000 665
Cummins Engine 10,000 591
First Aviation* 45,000 335
---------
1,591
---------
MEASURING DEVICES -- 1.4%
Rofin-Sinar Technologies* 36,000 437
Teradyne* 21,300 682
---------
1,119
---------
MEDICAL PRODUCTS & SERVICES-- 10.4%
Acme United* 129,200 775
American Retirement 23,000 460
Centennial Heathcare 33,900 771
Computer Motion* 80,000 840
Emeritus* 27,000 344
Harborside Healthcare* 18,000 356
Innovasive Devices* 9,000 82
Genome Therapeutics* 45,000 284
Medpartners* 45,000 1,007
Metra Biosystems* 6,800 25
Molecular Dynamics* 1,400 23
- --------------------------------------------------------
DESCRIPTION SHARES VALUE (000)
- --------------------------------------------------------
Pace Health Management
Systems* 43,500 $ 16
Possis Medical* 22,600 249
Progenics Pharmaceuticals* 69,750 977
Quest Medical* 9,000 63
Resound* 47,400 261
Spectranetics* 27,000 84
U.S. Surgical 15,400 451
Urologix* 26,500 480
Vision Twenty-One* 46,500 430
---------
7,978
---------
METALS & MINING -- 1.0%
Freeport-McMoran Copper
and Gold, Class B 25,000 394
Potash of Saskatchewan 4,300 357
---------
751
---------
MISCELLANEOUS BUSINESS SERVICES -- 2.5%
Cendant 48,062 1,652
Mac-Gray* 18,600 291
---------
1,943
---------
MISCELLANEOUS MANUFACTURING-- 1.3%
RMI Titanium* 35,000 700
Toymax International* 37,200 321
---------
1,021
---------
PETROLEUM & FUEL PRODUCTS -- 2.3%
Bayard Drilling Technologies* 9,300 151
Callon Petroleum (A)* 9,000 147
IRI International* 19,100 267
Meridian Resource* 68,256 653
Tidewater 10,000 551
---------
1,769
---------
PRINTING & PUBLISHING -- 0.2%
CMP Media Inc., Class A* 9,100 157
---------
PROFESSIONAL SERVICES -- 0.1%
Bright Horizons Inc* 4,650 87
---------
RAILROADS -- 0.6%
Union Pacific 7,000 437
---------
REAL ESTATE -- 5.5%
AMB Property* 53,600 1,347
Agree Realty 9,400 204
Liberty Property Trust 25,800 737
Pacific Gulf Properties 31,400 746
Prentiss Properties Trust* 34,000 950
Trammell Crow* 9,300 239
---------
4,223
---------
RESTAURANTS/FOOD SERVICES -- 1.6%
Darden Restaurants 47,900 599
Uno Restaurant* 90,000 619
---------
1,218
---------
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
58
<PAGE>
[SQUARE BULLET] COREFUND EQUITY FUNDS
- --------------------------------------------------------------------------------
- --------------------------------------------------------
DESCRIPTION SHARES VALUE (000)
- --------------------------------------------------------
RETAIL -- 6.0%
Bon-Ton Stores* 46,300 $ 695
Corporate Express* 27,500 354
Chicos* 4,500 30
CML Group 92,200 305
Cross-Continent Auto
Retailers* 65,000 544
Drug Emporium* 92,100 363
Friendly Ice Cream 9,300 108
General Nutrition* 33,000 1,122
Hot Topic* 4,400 100
Microage* 22,500 339
Paper Warehouse * 18,600 142
Paul Harris Stores* 41,500 418
Sportmart* 14,400 33
Sportmart, Class A* 14,400 34
Strouds* 19,000 33
---------
4,620
---------
SEMI-CONDUCTORS/INSTRUMENTS-- 2.1%
Ess Technology* 4,600 35
Intel 8,000 562
VLSI Technology* 45,000 1,063
---------
1,660
---------
SPECIALTY CONSTRUCTION -- 1.1%
Oakwood Homes 25,000 830
---------
STEEL & STEEL WORKS -- 0.5%
Ispat International PLC Nv,
Class A* 18,690 404
---------
TELEPHONES & TELECOMMUNICATION-- 12.1%
Airtouch Communications* 18,500 769
Amnex* 171,500 172
Clearnet, Class A* 40,000 455
Hybrid Networks* 44,600 496
Intermedia Communications
of Florida* 14,900 905
Lucent Technologies 16,500 1,318
McLeod, Class A* 15,000 480
Metrocall* 25,000 123
Metromedia Fiber Network* 46,500 773
Metronet Communication* 46,500 808
Nextlink Communications* 32,500 693
Qualcomm* 12,000 606
Viatel* 200,000 1,000
Worldcom* 25,000 756
---------
9,354
---------
WATER TREATMENT -- 1.0%
U.S. Filter* 25,000 748
---------
TOTAL COMMON STOCKS
(Cost $69,775) 74,499
---------
- --------------------------------------------------------
DESCRIPTION PAR (000) VALUE (000)
- --------------------------------------------------------
REPURCHASE AGREEMENT -- 3.5%
Morgan Stanley
6.20%, dated 12/31/97,
matures 01/02/98,
repurchase price $2,653,914
(collateralized by U.S. Treasury
Note, par value $2,725,000,
5.50%, 12/31/00; market
value $2,714,918) $2,653 $ 2,653
---------
TOTAL REPURCHASE AGREEMENT
(Cost $2,653) 2,653
---------
TOTAL INVESTMENTS -- 100.2%
(Cost $72,428) 77,152
---------
OTHER ASSETS AND LIABILITIES,
NET-- (0.2%) (147)
---------
NET ASSETS:
Portfolio Shares -- Class Y ($0.001 par
value -- 1 billion authorized) based
on 6,951,309 outstanding shares 67,555
Portfolio Shares -- Class A ($0.001 par
value -- 1 billion authorized) based
on 269,517 outstanding shares 2,885
Portfolio Shares -- Class B ($0.001 par
value -- 1 billion authorized) based
on 11,613 outstanding shares 139
Accumulated Net Realized Gain
on Investments 1,961
Net Unrealized Appreciation
on Investments 4,724
Distributions in Excess of Net
Investment Income (259)
---------
TOTAL NET ASSETS-- 100.0% $77,005
=========
NET ASSET VALUE, OFFERING AND REDEMPTION
PRICE PER SHARE -- CLASS Y $10.65
=========
NET ASSET VALUE AND REDEMPTION
PRICE PER SHARE-- CLASS A $10.60
=========
NET ASSET VALUE AND OFFERING
PRICE PER SHARE-- CLASS B $10.48
=========
* NON-INCOME PRODUCING SECURITY
ADR -- AMERICAN DEPOSITORY RECEIPT
PLC --PUBLIC LIMITED COMPANY
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
59
<PAGE>
STATEMENT
OF
NET ASSETS
- --------------------------------------------------------------------------------
AS OF
DECEMBER 31, 1997
(UNAUDITED)
INTERNATIONAL GROWTH FUND
[PIE CHART OMITTED]
Miscelleaneous 18%
United Kingdom 25%
Switzerland 7%
Spain 3%
Australia 3%
France 7%
Germany 11%
Italy 3%
Japan 14%
Mexico 4%
Netherlands 5%
% OF TOTAL PORTFOLIO INVESTMENTS
- --------------------------------------------------------
DESCRIPTION SHARES VALUE (000)
- --------------------------------------------------------
FOREIGN STOCKS -- 91.2%
ARGENTINA -- 0.5%
Banco Frances ADR 6,025 $ 165
Irsa GDR 2,400 90
Perez Companc, Series B 83,643 597
-----------
852
-----------
AUSTRALIA -- 2.2%
Australian Gas Light 80,000 558
John Fairfax Holdings 230,000 480
Lend Lease 25,000 489
Mayne Nickless 107,000 565
QBE Insurance 187,500 844
Telstra Installment Receipts* 139,000 293
Woodside Petroleum 39,300 277
-----------
3,506
-----------
AUSTRIA -- 0.7%
VA Technologie 7,800 1,185
-----------
BELGIUM -- 1.0%
Generale Banque 3,500 1,524
-----------
BRAZIL -- 1.4%
Centrais Electricas GDR 750 81
Companhia Paranese 10,000 137
Companhia Brasileira de
Distribuicao Grupo de
Acucar ADR 6,000 116
Electrobras ADR 38,500 957
Telebras ADR 7,820 911
-----------
2,202
-----------
CHILE -- 0.6%
Compania de Telecom de
Chile ADR 32,000 956
Santa Isabel ADR 2,100 37
-----------
993
-----------
- --------------------------------------------------------
DESCRIPTION SHARES VALUE (000)
- --------------------------------------------------------
DENMARK -- 1.6%
Novo-Nordisk, Class B 16,200 $ 2,317
Sydbank 3,124 178
-----------
2,495
-----------
FINLAND -- 0.1%
Nokia AB, Series A 3,080 219
-----------
FRANCE -- 6.9%
Air Liquide 8,750 1,370
AXA 31,195 2,414
Cie Financiere de Paribas,
Class A 5,350 465
Cie Generale des Eaux 21,948 3,064
Cie Generale des Eaux
Warrants* 2,000 1
Dassault Systems 8,000 244
France Telecom* 6,000 218
Rhone Poulenc 51,500 2,308
Schneider 4,000 217
Societe Nationale Elf Aquitaine 3,590 418
Valeo 4,970 337
-----------
11,056
-----------
GERMANY -- 9.7%
Allianz 7,600 1,961
Bayer 7,500 278
BMW 2,550 1,907
Deutsche Bank 34,100 2,385
Fried Krupp 665 122
Hoechst 2 --
Mannesmann 5,000 2,510
Preussag 5,000 1,537
SGL Carbon 10,100 1,292
Veba 45,449 3,095
Volkswagen 900 503
-----------
15,590
-----------
GREECE -- 0.5%
Alpha Credit Bank 15,000 875
-----------
HONG KONG -- 2.0%
China Light & Power 82,000 455
Citic Pacific 84,500 336
First Pacific 186,000 90
Giordano 650,000 224
HSBC Holdings 20,681 510
Hutchison Whampoa 78,000 489
National Mutual Asia 600,000 596
New World Development 149,000 515
-----------
3,215
-----------
HUNGARY -- 1.0%
Richter Gedeon 2,500 284
Matav ADR* 45,000 1,170
Pannoplast 3,200 168
-----------
1,622
-----------
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
60
<PAGE>
[SQUARE BULLET] COREFUND EQUITY FUNDS
- --------------------------------------------------------------------------------
- --------------------------------------------------------
DESCRIPTION SHARES VALUE (000)
- --------------------------------------------------------
INDIA -- 1.8%
Himilayan Fund* 75,918 $ 812
ICICI GDR 60,000 746
Indian Opportunities Fund* 41,981 354
Mahanagar Telephone
Nigam GDR* 33,000 512
Videsh Sanchar Nigam GDR* 35,000 491
-----------
2,915
-----------
INDONESIA -- 0.4%
Bank Bali "F" 600,000 81
Indosat "F" 275,000 519
-----------
600
-----------
ISRAEL -- 1.3%
Near East Opportunity Fund* 59,000 928
Tadarin Limited 8,032 287
Teva Pharmaceuticals ADR 20,000 946
-----------
2,161
-----------
ITALY -- 2.5%
Autogrill* 65,010 348
Bulgari 46,000 234
ENI 255,967 1,452
INA 850,000 1,724
Telecom Italia 46,595 298
-----------
4,056
-----------
JAPAN -- 11.7%
77th Bank 33,000 235
Canon 62,000 1,444
Eiden Sakakiya 25,000 93
Hitachi 149,000 1,062
Honda Motor 36,000 1,321
Hoya 8,000 251
Ito Yokado 27,000 1,376
Kao 21,000 302
Kyocera 4,000 181
Mabuchi Motor 10,000 508
Marui Company 36,000 560
Mitsubishi Heavy Industries 171,000 713
Mitsui Fudosan 54,000 521
Nippon Express 73,000 364
Riso Kagaku Corporation 5,100 292
Rohm Company 13,000 1,325
Secom 16,000 1,022
Shimachu 17,000 267
Shin-Etsu Chemical 42,000 801
Sony Corporation 22,000 1,955
Sumitomo Electric 53,000 723
Suzuki Motor 24,000 217
Taisho Pharmaceutical 25,000 638
Toppan Printing 73,000 951
Toyota Motor 28,000 802
Yamanouchi Pharmaceutical 41,000 880
-----------
18,804
-----------
- --------------------------------------------------------
DESCRIPTION SHARES VALUE (000)
- --------------------------------------------------------
MALAYSIA -- 0.3%
AMMB Holdings 58,000 $ 38
AMMB Holdings Warrants* 10,000 1
Malaysian Oxygen 200,000 448
-----------
487
-----------
MEXICO -- 3.3%
ALFA, Series A 61,945 419
Cifra, Series C 520,000 1,160
Cifra, Series V 550,000 1,350
Grupo Elektra 60,000 106
Grupo Financiero Banamex
Accival, Series B* 280,000 836
Grupo Modelo, Series C 17,000 143
Grupo Radio Centro ADR 6,600 94
Industrias CH, Series B* 30,000 178
Panamerican Beverage, Series A 6,000 196
Telefonos de Mexico ADR,
Series L 14,500 813
-----------
5,295
-----------
NETHERLANDS -- 4.6%
Baan Company* 8,680 284
Elsevier 128,000 2,071
Fortis Amev 6,500 283
Gucci Group, NY
Registered Shares 26,520 1,111
ING Groep 35,005 1,475
Phillips Electronics 26,200 1,571
Royal Dutch Petroleum 5,190 285
Vendex International 4,000 221
Wolters Kluwer 800 103
-----------
7,404
-----------
NORWAY -- 0.2%
Tomra Systems 13,500 302
-----------
PERU -- 0.1%
Credicorp 4,230 76
-----------
PHILIPPINES -- 0.4%
Ayala Land, Series B 1,000,000 400
Belle* 5,200,000 203
Belle Warrants* 800,000 1
-----------
604
-----------
POLAND -- 0.1%
Bank Handlowy GDR* 14,000 186
-----------
SINGAPORE -- 0.3%
Development Bank of
Singapore "F" 57,000 488
-----------
SOUTH AFRICA -- 0.2%
NBS Boland Group 121,500 301
-----------
SOUTH KOREA -- 0.0%
Samsung Electronics 2,463 14
-----------
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
61
<PAGE>
STATEMENT
OF
NET ASSETS
- --------------------------------------------------------------------------------
AS OF
DECEMBER 31, 1997
(UNAUDITED)
INTERNATIONAL GROWTH FUND (CONCLUDED)
- --------------------------------------------------------
DESCRIPTION SHARES VALUE (000)
- --------------------------------------------------------
SPAIN -- 2.7%
Argentaria 3,200 $ 195
Banco de Santander 59,400 1,985
Corp Financiera Reunida* 37,000 198
Telefonica de Espana 68,000 1,942
-----------
4,320
-----------
SWEDEN -- 2.2%
Ericsson Telephone ADR 8,360 312
Incentive AB, Series A 19,000 1,712
Nordbanken Holding AB* 216,000 1,222
SSAB, Series A 20,000 328
-----------
3,574
-----------
SWITZERLAND -- 6.2%
Credit Suisse Group 18,000 2,785
Disetronic Holding 130 285
Novartis 2,217 3,597
Roche Holding 306 3,039
Swiss Bank 850 264
-----------
9,970
-----------
TAIWAN -- 0.5%
Standard Foods Taiwan GDR* 75,000 863
-----------
THAILAND -- 0.2%
Ruam Pattana Fund II* 1,281,000 131
Siam Commercial Bank 100,000 115
Siam Commercial
Bank Rights* 33,333 6
-----------
252
-----------
UNITED KINGDOM -- 23.5%
3i Group 35,130 291
Brit-Borneo Petroleum
Syndicate 52,248 363
British Aerospace 14,475 412
British Sky Broadcasting 24,100 180
Cable & Wireless 206,000 1,810
General Electric 158,000 1,024
GKN 74,500 1,526
Glaxo Wellcome 81,000 1,915
Granada Group 102,750 1,569
JJB Sports 34,200 366
Ladbroke 401,430 1,740
Lasmo 265,318 1,202
Lloyds TSB Group 212,900 2,751
Logica 24,342 463
Manchester United 115,400 299
Marks & Spencer 164,000 1,613
McKechnie 76,500 578
National Power 33,420 329
National Westminster Bank 100,000 1,658
Next 24,500 278
NFC 333,000 828
Prudential 28,100 339
Railtrack Group 28,090 446
Reckitt & Coleman 122,500 1,921
- --------------------------------------------------------
DESCRIPTION SHARES/PAR (000) VALUE (000)
- --------------------------------------------------------
Rentokil Group 79,000 $ 349
Royal Bank of Scotland 149,000 1,891
Safeway 158,144 891
Scottish Power 212,000 1,873
Shell Transportation
& Trading 350,050 2,529
Smithkline Beecham 54,660 560
Smiths Industries 97,782 1,362
Standard Chartered Bank 22,340 238
Tesco 55,750 453
Unilever 228,800 1,957
Wassall 119,625 658
Wolseley 98,000 777
Zeneca Group 10,820 380
-----------
37,819
-----------
VENEZUELA -- 0.5%
Cia Anonima Telecom ADR 21,000 874
-----------
TOTAL FOREIGN STOCKS
(Cost $128,227) 146,699
-----------
FOREIGN PREFERRED STOCKS -- 1.3%
AUSTRALIA -- 0.4%
Newscorp 130,000 643
-----------
BRAZIL -- 0.6%
Eletrobras ADR 6,000 156
Petroleo Brasileira ADR 35,000 796
-----------
952
-----------
GERMANY -- 0.3%
Fresenius 888 162
Wella 450 330
-----------
492
-----------
TOTAL FOREIGN PREFERRED STOCKS
(Cost $1,902) 2,087
-----------
FOREIGN CONVERTIBLE BONDS -- 1.5%
JAPAN -- 1.5%
Mitsubishi Bank
3.000%, 11/30/02 $ 900 928
Namco
4.700%, 09/30/98 35,000 332
Nitto Denko
2.200%, 03/31/99 74,000 695
Sakura Finance
0.750%, 10/01/01 72,000 400
-----------
2,355
-----------
MALAYSIA -- 0.0%
AMMB Holdings ICULS
7.500%, 05/08/02 100 7
-----------
TOTAL FOREIGN CONVERTIBLE BONDS
(Cost $2,655) 2,362
-----------
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
62
<PAGE>
[SQUARE BULLET] COREFUND EQUITY FUNDS
- --------------------------------------------------------------------------------
- --------------------------------------------------------
DESCRIPTION PAR (000) VALUE (000)
- --------------------------------------------------------
FOREIGN BOND -- 0.0%
MALAYSIA -- 0.0%
AMMB Holdings
5.000%, 05/13/02 $ 100 $ 12
-----------
TOTAL FOREIGN BOND
(Cost $40) 12
-----------
DEMAND DEPOSIT -- 3.7%
Morgan Stanley
4.750%, 01/01/98 5,939 5,939
-----------
TOTAL DEMAND DEPOSIT
(Cost $5,939) 5,939
-----------
TOTAL INVESTMENTS -- 97.7%
(Cost $138,763) 157,099
-----------
OTHER ASSETS AND LIABILITIES,
NET-- 2.3% 3,647
-----------
NET ASSETS:
Portfolio Shares -- Class Y ($0.001 par
value -- 25 million authorized) based
on 11,925,445 outstanding shares 142,047
Portfolio Shares -- Class A ($0.001 par
value -- 25 million authorized) based
on 175,016 outstanding shares 2,264
Portfolio Shares -- Class B ($0.001 par
value -- 25 million authorized) based
on 1,054 outstanding shares 15
Accumulated net realized loss
on investments (199)
Net unrealized depreciation on
forward foreign currency contracts,
foreign currency and translation
of other assets and liabilities
in foreign currency (15)
Net unrealized appreciation
on investments 18,336
Accumulated net investment loss (1,702)
-----------
TOTAL NET ASSETS-- 100.0% $160,746
===========
NET ASSET VALUE, OFFERING AND
REDEMPTION PRICE PER SHARE-- CLASS Y $13.28
===========
NET ASSET VALUE AND REDEMPTION
PRICE PER SHARE-- CLASS A $13.28
===========
NET ASSET VALUE AND OFFERING
PRICE PER SHARE-- CLASS B $13.28
===========
* NON-INCOME PRODUCING SECURITY
AMOUNTS DESIGNATED AS "--" ARE EITHER $0 OR HAVE BEEN ROUNDED TO $0.
ADR -- AMERICAN DEPOSITORY RECEIPT
"F" -- FOREIGN SHARES
GDR -- GLOBAL DEPOSITORY RECEIPT
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
BALANCED FUND
[PIE CHART OMITTED]
U.S. TREASURY OBLIGATIONS 18%
U.S. GOVERNMENT BACKED OBLIGATIONS 4%
U.S. AGENCY BACKED OBLIGATIONS 1%
CORPORATE OBLIGATIONS 7%
CASH EQUIVALENTS 6%
COMMON STOCK 64%
% OF TOTAL PORTFOLIO INVESTMENTS
- --------------------------------------------------------
DESCRIPTION SHARES VALUE (000)
- --------------------------------------------------------
COMMON STOCKS -- 64.9%
BANKS -- 3.0%
BankAmerica 15,700 $ 1,146
Citicorp 6,000 759
Crestar Financial 34,000 1,938
-----------
3,843
-----------
BEAUTY PRODUCTS -- 1.9%
Colgate Palmolive 10,000 735
Gillette 9,200 924
Kimberly Clark 8 --
Procter & Gamble 10,000 798
-----------
2,457
-----------
BROADCASTING, CABLE TV, NEWSPAPERS
& ADVERTISING -- 2.3%
CBS 47,000 1,384
Comcast, Class A 50,000 1,578
TCI Satellite Entertainment* 4,300 30
-----------
2,992
-----------
COMMUNICATIONS EQUIPMENT -- 1.3%
Cisco Systems* 29,400 1,639
-----------
COMPUTERS & SERVICES -- 4.5%
America Online* 18,000 1,605
Compaq Computer 26,100 1,473
Microsoft* 6,000 775
Peoplesoft* 47,000 1,833
-----------
5,686
-----------
DRUGS -- 4.1%
Glaxo ADR 29,400 1,408
Merck 7,600 807
Schering Plough 30,000 1,864
SmithKline Beecham ADR 23,600 1,214
-----------
5,293
-----------
ELECTRICAL EQUIPMENT -- 3.1%
Emerson Electric 17,300 976
General Electric 20,200 1,482
Honeywell 22,000 1,507
-----------
3,965
-----------
63
<PAGE>
STATEMENT
OF
NET ASSETS
- --------------------------------------------------------------------------------
AS OF
DECEMBER 31, 1997
(UNAUDITED)
BALANCED FUND (CONTINUED)
- --------------------------------------------------------
DESCRIPTION SHARES VALUE (000)
- --------------------------------------------------------
ENTERTAINMENT -- 0.7%
Walt Disney 8,500 $ 842
-----------
FINANCIAL SERVICES -- 2.7%
FHLMC 44,000 1,845
FNMA 28,000 1,598
-----------
3,443
-----------
FOOD, BEVERAGE & TOBACCO -- 4.4%
CPC International 8,000 864
ConAgra 45,000 1,477
Hershey Foods 29,000 1,796
Philip Morris 13,500 612
Sara Lee 15,000 845
-----------
5,594
-----------
HEALTHCARE SERVICES -- 1.5%
Health Management Associates* 78,448 1,981
-----------
HOUSEHOLD PRODUCTS -- 0.6%
Sunbeam Oster 19,000 800
-----------
INSURANCE -- 3.1%
Allstate 17,000 1,545
American International Group 12,000 1,305
General Re 5,000 1,060
-----------
3,910
-----------
MACHINERY -- 0.8%
Deere 17,500 1,020
-----------
MEDICAL INFORMATION SYSTEMS -- 1.5%
HBO 39,000 1,872
-----------
MEDICAL PRODUCTS & SERVICES-- 3.3%
Cardinal Health 22,850 1,717
Guidant 13,000 809
Johnson & Johnson 13,200 870
Medtronic 16,000 837
-----------
4,233
-----------
PETROLEUM REFINING -- 5.3%
Amoco 12,400 1,056
Atlantic Richfield 12,000 961
Chevron 17,100 1,317
Exxon 19,500 1,193
Mobil 16,200 1,169
Texaco 20,000 1,087
-----------
6,783
-----------
PETROLEUM SERVICES -- 1.9%
Halliburton 22,000 1,143
Schlumberger 15,400 1,240
-----------
2,383
-----------
PRINTING & PUBLISHING -- 1.3%
Gannett 26,000 1,607
-----------
- ---------------------------------------------------------
DESCRIPTION SHARES/PAR (000) VALUE (000)
- ---------------------------------------------------------
RETAIL -- 7.1%
Costco* 40,000 $ 1,785
Dayton-Hudson 38,000 2,565
Gap 45,000 1,595
Home Depot 26,400 1,554
Nordstrom 25,000 1,509
-----------
9,008
-----------
SOFTWARE -- 2.2%
BMC Software* 29,000 1,903
Computer Associates
International 18,000 952
-----------
2,855
-----------
TECHNOLOGY, SERVICES -- 3.4%
Automatic Data Processing 29,000 1,780
Corestaff* 28,000 742
Paychex 34,692 1,756
-----------
4,278
-----------
TELEPHONES & TELECOMMUNICATION-- 4.9%
ICG Communications* 29,300 798
McLeodUSA, Class A* 34,000 1,088
Qualcomm* 27,000 1,364
Qwest Communications Int'l* 3,623 216
Teleport Communications
Group* 28,000 1,537
Worldcom* 39,900 1,207
-----------
6,210
-----------
TESTING LABORATORIES -- 0.0%
Genzyme Corporation-
Tissue Repair* 900 6
-----------
TOTAL COMMON STOCKS
(Cost $60,675) 82,700
-----------
U.S. TREASURY OBLIGATIONS -- 16.0%
U.S. Treasury Bonds
6.000%, 08/15/99 $1,500 1,507
7.250%, 05/15/16 500 569
8.750%, 05/15/17 665 871
U.S. Treasury Notes
8.125%, 02/15/98 1,670 1,675
6.125%, 05/15/98 1,000 1,002
9.250%, 08/15/98 1,620 1,655
8.875%, 11/15/98 1,105 1,135
8.875%, 02/15/99 110 114
6.000%, 06/30/99 2,000 2,010
6.000%, 10/15/99 500 503
5.875%, 11/15/99 2,000 2,007
7.750%, 11/30/99 700 726
6.375%, 01/15/00 500 507
7.500%, 11/15/01 3,235 3,429
6.625%, 03/31/02 1,000 1,032
7.500%, 02/15/05 600 659
6.500%, 08/15/05 500 522
6.875%, 05/15/06 500 535
-----------
TOTAL U.S. TREASURY OBLIGATIONS
(Cost $20,239) 20,458
-----------
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
64
<PAGE>
[SQUARE BULLET] COREFUND EQUITY FUNDS
- --------------------------------------------------------------------------------
- --------------------------------------------------------
DESCRIPTION PAR (000) VALUE (000)
- --------------------------------------------------------
U.S. GOVERNMENT AGENCY OBLIGATIONS -- 2.4%
FHLMC
6.440%, 01/28/00 $ 500 $ 506
8.025%, 09/15/06 1,000 1,010
8.055%, 09/30/11 1,000 1,009
FNMA
5.940%, 12/12/05 500 497
----------
TOTAL U.S. GOVERNMENT AGENCY OBLIGATIONS
(Cost $2,998) 3,022
----------
U.S. GOVERNMENT MORTGAGE-BACKED BONDS -- 4.8%
FHLMC
6.000%, 05/01/08 640 630
5.500%, 11/01/08 546 527
FNMA
6.500%, 08/01/10 219 220
6.500%, 09/01/10 283 284
6.500%, 11/01/24 445 440
GNMA
7.500%, 10/15/11 2,273 2,342
9.000%, 10/15/19 146 156
7.500%, 03/15/26 1,471 1,507
----------
TOTAL U.S. GOVERNMENT MORTGAGE-
BACKED BONDS
(Cost $6,023) 6,106
----------
CORPORATE OBLIGATIONS -- 6.6%
BANKS -- 1.3%
First Bank System
6.875%, 09/15/07 500 511
Midland Bank
6.950%, 03/15/11 200 205
NationsBank
6.500%, 03/15/06 200 201
Provident Bank
6.125%, 12/15/00 25 25
Royal Bank of Scotland
6.375%, 02/01/11 205 200
U.S. Bancorp
6.750%, 10/15/05 500 508
----------
1,650
----------
FINANCIAL SERVICES -- 2.9%
Chrysler Financial
6.950%, 03/25/02 500 512
CSR Finance
7.700%, 07/21/25 200 221
Donaldson Lufkin & Jenrette
6.875%, 11/01/05 185 189
Ford Motor Credit
6.375%, 04/15/00 500 504
6.250%, 11/08/00 500 501
7.500%, 01/15/03 1,000 1,053
MBNA
7.250%, 09/15/02 185 190
- --------------------------------------------------------
DESCRIPTION PAR (000) VALUE (000)
- --------------------------------------------------------
Merrill Lynch
7.000%, 04/27/08 $ 250 $ 261
Noranda
8.125%, 06/15/04 195 211
Santander
7.250%, 11/01/15 100 104
----------
3,746
----------
INDUSTRIAL -- 2.0%
Arco Chemical
10.250%, 11/01/10 210 280
Coca Cola
6.000%, 07/15/03 1,000 991
Dayton Hudson
8.500%, 12/01/22 500 542
ITT
7.375%, 11/15/15 360 356
Laidlaw
8.750%, 04/15/25 75 90
MacMillan Bloedel
7.700%, 02/15/26 215 222
----------
2,481
----------
UTILITIES -- 0.4%
Bellsouth
7.000%, 02/01/05 500 523
----------
TOTAL CORPORATE OBLIGATIONS
(Cost $8,164) 8,400
----------
REPURCHASE AGREEMENTS -- 6.2%
Aubrey Lanston
6.50%, dated 12/31/97,
matures 01/02/98,
repurchase price $3,957,429
(collateralized by various
U.S. Treasury Notes, ranging
in par value $1,920,000-
$2,025,000, 5.625%-8.200,
07/15/98-12/31/99; market
value $4,035,120) 3,956 3,956
Hong Kong Shainghai Bank
6.40%, dated 12/31/97,
matures 01/02/98,
repurchase price $1,977,703
(collateralized by U.S. Treasury
Note, par value $1,915,000,
6.625%, 07/31/01;
market value $2,016,540) 1,977 1,977
Morgan Stanley
6.20%, dated 12/31/97,
matures 01/02/98,
repurchase price $ 1,977,681
(collateralized by U.S. Treasury
Note, par value $2,030,000,
5.50%, 12/31/00; market
value $2,022,480) 1,977 1,977
----------
TOTAL REPURCHASE AGREEMENTS
(Cost $7,910) 7,910
----------
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
65
<PAGE>
STATEMENT
OF
NET ASSETS
- --------------------------------------------------------------------------------
AS OF
DECEMBER 31, 1997
(UNAUDITED)
[SQUARE BULLET] COREFUND EQUITY FUNDS
- --------------------------------------------------------------------------------
BALANCED FUND (CONCLUDED)
- ---------------------------------------------------------
DESCRIPTION VALUE (000)
- ---------------------------------------------------------
TOTAL INVESTMENTS -- 100.9%
(Cost $106,009) $128,596
----------
OTHER ASSETS AND LIABILITIES,
NET-- (0.9%) (1,189)
----------
NET ASSETS:
Portfolio Shares -- Class Y ($0.001 par
value -- 100 million authorized) based
on 8,920,348 outstanding shares 96,944
Portfolio Shares -- Class A ($0.001 par
value -- 100 million authorized) based
on 406,668 outstanding shares 4,763
Portfolio Shares -- Class B ($0.001 par
value -- 100 million authorized) based
on 42,424 outstanding shares 598
Accumulated Net Realized Gain
on Investments 2,510
Net Unrealized Appreciation
on Investments 22,587
Undistributed Net Investment Income 5
----------
TOTAL NET ASSETS-- 100.0% $127,407
==========
NET ASSET VALUE, OFFERING AND REDEMPTION
PRICE PER SHARE -- CLASS Y $13.60
==========
NET ASSET VALUE AND REDEMPTION
PRICE PER SHARE-- CLASS A $13.60
==========
NET ASSET VALUE AND OFFERING
PRICE PER SHARE-- CLASS B $13.51
==========
*NON-INCOME PRODUCING SECURITY
ADR -- AMERICAN DEPOSITORY RECEIPT
CMO -- COLLATERALIZED MORTGAGE OBLIGATION
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.
66
<PAGE>
[SQUARE BULLET] COREFUND FIXED INCOME FUNDS
- --------------------------------------------------------------------------------
SHORT TERM INCOME FUND
[PIE CHART OMITTED]
U.S. TREASURY OBLIGATIONS 37%
U.S. AGENCY BACKED OBLIGATIONS 3%
CASH EQUIVALENTS 7%
CORPORATE OBLIGATIONS 53%
% OF TOTAL PORTFOLIO INVESTMENTS
- --------------------------------------------------------
DESCRIPTION PAR (000) VALUE (000)
- --------------------------------------------------------
CORPORATE BONDS -- 31.7%
BANKING -- 7.7%
American Express
Centurion Bank (A)
6.019%, 01/21/98 $1,000 $ 1,001
5.999%, 01/23/98 1,000 1,000
Citicorp (A)
6.075%, 02/23/98 500 502
NationsBank
5.375%, 04/15/00 395 389
---------
2,892
---------
FINANCIAL SERVICES -- 20.8%
Associates Corporation
of North America
6.250%, 03/15/99 525 527
Bear Stearns
6.250%, 12/01/00 200 200
Chrysler Financial
6.375%, 01/28/00 510 513
Credit Suisse (A)
5.920%, 01/13/98 1,000 1,000
Fleet Mortgage Group
6.500%, 09/15/99 500 503
General Motors Acceptance (A)
5.906%, 03/09/98 700 699
Lehman Brothers Holdings
6.375%, 06/01/98 500 501
Mellon Financial
7.625%, 11/15/99 255 263
Morgan Stanley Group (A)
5.915%, 02/26/98 1,250 1,250
Morgan Stanley Group
5.625%, 03/01/99 1,000 996
Salomon
6.500%, 03/01/00 750 755
Sears Roebuck Acceptance
6.380%, 02/16/99 650 653
---------
7,860
---------
- --------------------------------------------------------
DESCRIPTION PAR (000) VALUE (000)
- --------------------------------------------------------
INDUSTRIAL -- 1.9%
Time Warner
7.450%, 02/01/98 $ 735 $ 736
---------
TELEPHONES & TELECOMMUNICATION -- 1.3%
TCI Communications
6.375%, 09/15/99 500 500
---------
TOTAL CORPORATE BONDS
(Cost $11,964) 11,988
---------
U.S. TREASURY OBLIGATIONS -- 33.9%
U.S. Treasury Notes
6.125%, 03/31/98 500 501
5.875%, 04/30/98 2,000 2,003
6.125%, 05/15/98 1,000 1,002
6.000%, 05/31/98 1,000 1,002
6.125%, 08/31/98 1,000 1,003
6.000%, 09/30/98 2,250 2,257
5.875%, 10/31/98 1,000 1,002
5.750%, 12/31/98 1,000 1,002
6.375%, 01/15/99 1,000 1,008
5.875%, 01/31/99 1,000 1,002
6.000%, 08/15/00 1,000 1,007
---------
TOTAL U.S. TREASURY OBLIGATIONS
(Cost $12,760) 12,789
---------
U.S. AGENCY MORTGAGE-BACKED BONDS -- 2.7%
FNMA
5.894%, 10/20/98 500 500
5.870%, 10/25/99 500 500
---------
TOTAL U.S. AGENCY MORTGAGE-
BACKED BONDS
(Cost $999) 1,000
---------
TIME DEPOSIT -- 1.8%
Den Danske Bank
6.500%, 01/02/98 694 694
---------
TOTAL TIME DEPOSIT
(Cost $694) 694
---------
INSURANCE FUNDING AGREEMENT -- 5.3%
Allstate (A)
5.696%, 01/01/98 2,000 2,000
---------
TOTAL INSURANCE FUNDING AGREEMENT
(Cost $2,000) 2,000
---------
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
67
<PAGE>
STATEMENT
OF
NET ASSETS
- --------------------------------------------------------------------------------
AS OF
DECEMBER 31, 1997
(UNAUDITED)
SHORT TERM INCOME FUND (CONCLUDED)
- --------------------------------------------------------
DESCRIPTION PAR (000) VALUE (000)
- --------------------------------------------------------
ASSET-BACKED SECURITIES -- 20.5%
Aames Mortgage Trust,
Series 1996-B, Class A1B
7.275%, 05/15/20 $215 $ 217
Banc One Auto Grantor Trust,
Series 1997-B, Class A
6.290%, 07/20/04 750 755
Cit Rv Owner Trust,
Series 1995-B, Class A
6.500%, 04/15/11 216 218
Contimortgage Home Equity Loan
Trust, Series 1996-4, Class A5
6.600%, 10/15/11 210 211
Contimortgage Home Equity Loan
Trust, Series 1997-4, Class A3
6.260%, 07/15/12 500 500
EQCC Home Equity Loan Trust,
Series 1996-2, Class A2
6.700%, 09/15/08 250 252
EQCC Home Equity Loan Trust,
Series 1996-4, Class A3
6.260%, 11/15/06 175 176
EQCC Home Equity Loan Trust,
Series 1997-1, Class A3
6.840%, 09/15/11 750 762
Firstplus Home Loan Equity Trust,
Series 1997-3, Class A3
6.570%, 10/10/10 500 503
Heller Equipment Asset Receivables
Trust, Series 1997-1, Class A2
6.390%, 05/25/05 750 754
Independent National Mortgage,
Series 1996-A, Class A1
6.710%, 09/25/26 315 318
Money Store Home Equity Loan
Trust, Series 1993-B, Class A1
5.400%, 08/15/05 250 250
Navistar Financial Owner Trust,
Series 1996-B, Class A3
6.330%, 04/21/03 310 312
Navistar Financial Owner Trust,
Series 1997-A, Class A2
6.350%, 01/15/00 447 448
Student Loan Marketing Association,
Series 1997-1, Class A1 (A)
5.889%, 01/25/98 671 671
- --------------------------------------------------------
DESCRIPTION PAR (000) VALUE (000)
- --------------------------------------------------------
Union Acceptance,
Series 1996-A, Class A
5.400%, 04/07/03 $451 $ 447
Union Acceptance,
Series 1996-D, Class A2
6.170%, 10/09/02 250 251
Union Acceptance,
Series 1997-A, Class A
6.130%, 07/10/01 281 282
Vanderbilt Mortgage Finance,
Series 1997-B, Class 1A2
6.775%, 01/07/03 430 435
---------
TOTAL MORTGAGE RELATED
(Cost $7,735) 7,762
---------
TOTAL INVESTMENTS -- 95.9%
(Cost $36,152) 36,233
---------
OTHER ASSETS AND LIABILITIES -- 4.1%
Receivable - Investment Securities Sold 1,010
Other Assets and Liabilities 532
---------
TOTAL OTHER ASSETS AND LIABILITIES, NET 1,542
---------
NET ASSETS:
Portfolio Shares -- Class Y ($0.001 par
value -- 1 billion authorized) based
on 3,725,166 outstanding shares 37,207
Portfolio Shares -- Class A ($0.001 par
value -- 1 billion authorized) based
on 57,118 outstanding shares 568
Accumulated Net Realized Loss
on Investments (81)
Net Unrealized Appreciation
on Investments 81
---------
TOTAL NET ASSETS-- 100.0% $37,775
=========
NET ASSET VALUE, OFFERING AND REDEMPTION
PRICE PER SHARE -- CLASS Y $9.99
=========
NET ASSET VALUE AND REDEMPTION
PRICE PER SHARE-- CLASS A $9.98
=========
(A) VARIABLE RATE SECURITY -- THE RATE REFLECTED ON THE STATEMENT OF NET ASSETS
IS THE RATE IN EFFECT ON DECEMBER 31, 1997.
FNMA -- FEDERAL NATIONAL MORTGAGE ASSOCIATION
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
68
<PAGE>
[SQUARE BULLET] COREFUND FIXED INCOME FUNDS
- --------------------------------------------------------------------------------
SHORT-INTERMEDIATE BOND FUND
[PIE CHART OMITTED]
U.S. TREASURY OBLIGATIONS 48%
U.S. GOVERNMENT BACKED OBLIGATIONS 2%
U.S. AGENCY BACKED OBLIGATIONS 1%
CASH EQUIVALENTS 3%
CORPORATE OBLIGATIONS 46%
% OF TOTAL PORTFOLIO INVESTMENTS
- --------------------------------------------------------
DESCRIPTION PAR (000) VALUE (000)
- --------------------------------------------------------
U.S. TREASURY OBLIGATIONS -- 47.6%
U.S. Treasury Notes
5.125%, 03/02/98 $ 1,500 $ 1,499
6.000%, 05/31/98 12,145 12,169
7.125%, 10/15/98 17,290 17,490
8.875%, 02/15/99 1,755 1,816
6.500%, 04/30/99 15,035 15,198
5.875%, 07/31/99 1,993 1,999
6.000%, 10/15/99 2,200 2,213
5.625%, 10/31/99 4,750 4,745
7.750%, 12/31/99 2,450 2,545
7.750%, 01/31/00 8 8
7.125%, 02/29/00 5,715 5,880
6.750%, 04/30/00 1,630 1,667
8.000%, 05/15/01 5,280 5,639
6.625%, 07/31/01 5,310 5,458
6.125%, 08/15/07 3,852 3,958
---------
TOTAL U.S. TREASURY OBLIGATIONS
(Cost $81,925) 82,284
---------
U.S. AGENCY MORTGAGE-BACKED BONDS -- 3.5%
FHLMC
6.500%, 07/01/04 1,711 1,717
6.750%, 03/15/07 1,755 1,786
FNMA
6.500%, 08/01/10 1,379 1,380
6.500%, 10/01/10 1,096 1,098
---------
TOTAL U.S. AGENCY MORTGAGE-BACKED BONDS
(Cost $5,918) 5,981
---------
CORPORATE OBLIGATIONS -- 22.4%
BANKING -- 2.7%
Bank One
7.600%, 05/01/07 85 91
Banca Commerciale Italiana
8.250%, 07/15/07 819 905
- ---------------------------------------------------------
DESCRIPTION PAR (000) VALUE (000)
- ---------------------------------------------------------
Bank of Oklahoma
7.125%, 08/15/07 $1,815 $ 1,872
Bch Cayman Islands Limited
7.700%, 07/15/06 1,630 1,728
---------
4,596
---------
FINANCIAL SERVICES -- 11.0%
Associates Corporation
of North America
6.375%, 08/15/98 1,500 1,504
6.750%, 07/15/01 1,990 2,025
Bear Stearns
6.650%, 12/01/04 1,805 1,825
Dean Witter Discover
6.300%, 01/15/06 1,610 1,596
Lehman Brothers
6.710%, 10/12/99 75 76
7.250%, 04/15/03 2,720 2,812
Macsaver Financial
7.600%, 08/01/07 1,289 1,308
Paine Webber Group
6.500%, 11/01/05 1,745 1,719
Salomon
7.200%, 02/01/04 2,810 2,919
Security Pacific
11.500%, 11/15/00 2,050 2,329
Societe Generale
7.400%, 06/01/06 942 991
---------
19,104
---------
INDUSTRIALS -- 6.8%
Barrick Gold
7.500%, 05/01/07 1,780 1,880
CSR America
6.875%, 07/21/05 1,670 1,716
Loews
6.750%, 12/15/06 1,775 1,806
RJR Nabisco
8.750%, 04/15/04 1,710 1,832
Tele-Communications
7.250%, 08/01/05 985 1,012
Time Warner
7.750%, 06/15/05 1,770 1,876
USX
9.625%, 08/15/03 1,490 1,708
---------
11,830
---------
UTILITIES -- 1.9%
Penn Power and Light
7.750%, 05/01/02 1,280 1,347
Tosco
7.625%, 05/15/06 1,790 1,913
---------
3,260
---------
TOTAL CORPORATE OBLIGATIONS
(Cost $37,592) 38,790
---------
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
69
<PAGE>
STATEMENT
OF
NET ASSETS
- --------------------------------------------------------------------------------
AS OF
DECEMBER 31, 1997
(UNAUDITED)
SHORT-INTERMEDIATE BOND FUND (CONCLUDED)
- --------------------------------------------------------
DESCRIPTION PAR (000) VALUE (000)
- --------------------------------------------------------
ASSET-BACKED SECURITIES -- 23.0%
Banc One Auto Grantor Trust,
Series 1997-B, Class A
6.290%, 07/20/04 $1,952 $ 1,964
Case Equipment Loan Trust,
Series 1997-5, Class A4
6.410%, 09/15/04 1,857 1,864
Citicorp Mortgage Securities,
Series 1997-1, Class A2
7.250%, 02/25/27 1,775 1,784
Contimortgage Home Equity
Loan Trust, Series 1997-2,
Class A9
7.090%, 04/15/28 3,185 3,254
Contimortgage Home Equity
Loan Trust, Series 1997-4,
Class A3
6.260%, 07/15/12 1,720 1,720
Countrywide Mortgage Broker
Services, Series 1997, Class A1
7.000%, 03/25/27 1,661 1,670
EQCC, Series 1996-4, Class A5
6.710%, 07/15/11 1,945 1,977
Firstplus Home Loan Trust,
Series 1997-3, Class A5
6.860%, 10/10/13 2,535 2,573
General Electric Capital
Mortgage Services,
Series 1997-3, Class A4
7.500%, 04/25/27 1,800 1,820
Heller Equipment Asset
Receivables Trust,
Series 1997-1, Class A2
6.390%, 05/25/05 1,780 1,790
IMC Home Equity Loan Trust,
Series 1997-2, Class A3
6.940%, 11/20/11 1,391 1,408
Metlife Captial Equipment Loan
Trust, Series 1997-A, Class A
6.850%, 05/20/08 1,675 1,712
Money Store Home Equity Loan
Trust, Series 1996-D, Class A9
7.000%, 04/15/28 2,447 2,515
Money Store Home Equity Loan
Trust, Series 1997-D, Class A7
6.485%, 12/15/28 1,500 1,500
Premier Auto Trust,
Series 1997-3, Class A5
6.340%, 01/06/02 2,265 2,271
Residential Asset Securization
Trust, Series 1997, Class A10
7.250%, 05/25/27 1,770 1,787
Sears Credit Account Master
Trust, Series 1995-3, Class A
7.000%, 10/15/04 3,000 3,062
- --------------------------------------------------------
DESCRIPTION PAR (000) VALUE (000)
- --------------------------------------------------------
Standard Credit Card Master
Trust, Series 1995-6, Class A
6.750%, 06/07/00 $2,000 $ 2,007
Union Acceptance,
Series 1996-A, Class A
5.400%, 04/07/03 1,275 1,264
Vanderbilt Mortgage Finance,
Series 1997-C, Class 1A2
6.480%, 09/07/07 1,790 1,796
---------
TOTAL ASSET-BACKED SECURITIES
(Cost $39,391) 39,738
---------
REPURCHASE AGREEMENT -- 2.5%
Morgan Stanley
6.20%, dated 12/31/97,
matures 01/02/98,
repurchase price $4,349,498
(collateralized by U.S. Treasury
Note, par value $4,465,000,
5.50%, 12/31/00; market
value $4,448,480) 4,348 4,348
---------
TOTAL REPURCHASE AGREEMENT
(Cost $4,348) 4,348
---------
TOTAL INVESTMENTS -- 99.0%
(Cost $169,174) 171,141
---------
OTHER ASSETS AND LIABILITIES,
NET-- 1.0% 1,680
---------
NET ASSETS:
Portfolio Shares -- Class Y ($0.001 par
value -- 100 million authorized) based
on 17,076,303 outstanding shares 169,915
Portfolio Shares -- Class A ($0.001 par
value -- 100 million authorized) based
on 284,400 outstanding shares 3,423
Accumulated Net Realized Loss
on Investments (2,490)
Net Unrealized Appreciation
on Investments 1,967
Undistributed Net Investment Income 6
---------
TOTAL NET ASSETS-- 100.0% $172,821
=========
NET ASSET VALUE, OFFERING AND REDEMPTION
PRICE PER SHARE -- CLASS Y $9.95
=========
NET ASSET VALUE AND REDEMPTION
PRICE PER SHARE-- CLASS A $9.95
=========
FHLMC -- FEDERAL HOME LOAN MORTGAGE CORPORATION
FNMA -- FEDERAL NATIONAL MORTGAGE ASSOCIATION
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
70
<PAGE>
[SQUARE BULLET] COREFUND FIXED INCOME FUNDS
- --------------------------------------------------------------------------------
GOVERNMENT INCOME FUND
[PIE CHART OMITTED]
U.S. TREASURY OBLIGATIONS 32%
U.S. GOVERNMENT BACKED OBLIGATIONS 66%
CASH EQUIVALENTS 2%
% OF TOTAL PORTFOLIO INVESTMENTS
- --------------------------------------------------------
DESCRIPTION PAR (000) VALUE (000)
- --------------------------------------------------------
U.S. GOVERNMENT MORTGAGE-BACKED BONDS -- 55.8%
GNMA
8.000%, 09/15/09 $ 552 $ 574
8.000%, 02/15/22 298 309
8.000%, 09/15/22 50 52
8.000%, 10/15/22 226 235
8.000%, 11/15/22 418 434
7.000%, 04/15/23 334 337
7.500%, 08/15/23 1,019 1,045
6.500%, 11/15/23 423 419
7.000%, 01/15/24 799 806
8.000%, 05/15/25 834 866
6.500%, 12/15/25 985 975
7.500%, 02/15/26 433 444
6.500%, 04/15/26 469 464
8.000%, 05/15/26 955 991
8.000%, 06/15/26 669 694
8.000%, 08/15/26 1,978 2,051
8.000%, 09/15/26 1,982 2,056
---------
TOTAL U.S. GOVERNMENT MORTGAGE-BACKED BONDS
(Cost $12,461) 12,752
---------
U.S. AGENCY MORTGAGE-BACKED BONDS -- 10.2%
FHLMC
6.000%, 05/01/08 304 300
FNMA
7.000%, 10/01/22 644 649
7.000%, 11/01/26 386 389
7.500%, 05/01/27 965 988
---------
TOTAL U.S. AGENCY MORTGAGE-BACKED BONDS
(Cost $2,293) 2,326
---------
- --------------------------------------------------------
DESCRIPTION PAR (000) VALUE (000)
- --------------------------------------------------------
U.S. TREASURY OBLIGATIONS -- 32.0%
U.S. Treasury Bonds
6.375%, 08/15/27 $2,300 $ 2,427
6.125%, 11/15/27 600 617
U.S. Treasury Notes
6.375%, 05/15/99 970 979
8.000%, 05/15/01 1,200 1,281
6.625%, 07/31/01 600 617
6.250%, 01/31/02 300 305
6.625%, 04/30/02 300 310
6.125%, 08/15/07 750 771
---------
TOTAL U.S. TREASURY OBLIGATIONS
(Cost $7,076) 7,307
---------
REPURCHASE AGREEMENT -- 1.4%
Morgan Stanley
6.20%, dated 12/31/97,
matures 01/02/98,
repurchase price $332,114
(collateralized by U.S. Treasury
Note, par value $340,000,
5.50%, 12/31/00; market
value $338,742) 332 332
---------
TOTAL REPURCHASE AGREEMENT
(Cost $332) 332
---------
TOTAL INVESTMENTS -- 99.4%
(Cost $22,162) 22,717
---------
OTHER ASSETS AND LIABILITIES,
NET-- 0.6% 142
---------
NET ASSETS:
Portfolio Shares -- Class Y ($0.001 par
value -- 100 million authorized) based
on 2,097,233 outstanding shares 20,757
Portfolio Shares -- Class A ($0.001 par
value -- 100 million authorized) based
on 182,133 outstanding shares 1,844
Accumulated Net Realized Loss
on Investments (297)
Net Unrealized Appreciation
on Investments 555
---------
TOTAL NET ASSETS-- 100.0% $22,859
=========
NET ASSET VALUE, OFFERING AND REDEMPTION
PRICE PER SHARE -- CLASS Y $10.03
=========
NET ASSET VALUE AND REDEMPTION
PRICE PER SHARE-- CLASS A $10.03
=========
FHLMC -- FEDERAL HOME LOAN MORTGAGE CORPORATION
FNMA -- FEDERAL NATIONAL MORTGAGE CORPORATION
GNMA -- GOVERNMENT NATIONAL MORTGAGE CORPORATION
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
71
<PAGE>
STATEMENT
OF
NET ASSETS
- --------------------------------------------------------------------------------
AS OF
DECEMBER 31, 1997
(UNAUDITED)
BOND FUND
[PIE CHART OMITTED]
U.S. TREASURY OBLIGATIONS 27%
U.S. GOVERNMENT BACKED OBLIGATIONS 29%
CASH EQUIVALENTS 3%
CORPORATE OBLIGATIONS 40%
U.S. AGENCY BACKED OBLIGATIONS 1%
% OF TOTAL PORTFOLIO INVESTMENTS
- --------------------------------------------------------
DESCRIPTION PAR (000) VALUE (000)
- --------------------------------------------------------
U.S. TREASURY OBLIGATIONS -- 26.4%
U.S. Treasury Bonds
6.500%, 11/15/26 $2,895 $ 3,090
6.375%, 08/15/27 5,511 5,815
6.125%, 11/15/27 3,193 3,282
U.S. Treasury Notes
8.875%, 02/15/99 6,470 6,694
6.500%, 04/30/99 3,305 3,341
5.875%, 07/31/99 1,950 1,956
5.625%, 10/31/99 2,135 2,133
7.750%, 01/31/00 503 523
6.750%, 04/30/00 5,525 5,649
8.000%, 05/15/01 3,795 4,053
6.625%, 07/31/01 2,548 2,619
7.500%, 11/15/01 3,835 4,064
6.250%, 02/28/02 442 450
6.125%, 08/15/07 2,515 2,584
---------
TOTAL U.S. TREASURY OBLIGATIONS
(Cost $45,367) 46,253
---------
U.S. GOVERNMENT MORTGAGE-BACKED BONDS -- 29.2%
FHLMC
6.750%, 03/15/07 2,355 2,396
7.500%, 10/01/10 2,363 2,425
8.000%, 07/01/25 3,145 3,255
FNMA
6.500%, 08/01/10 2,880 2,884
6.500%, 09/01/10 3,225 3,229
7.500%, 06/01/11 2,273 2,333
6.500%, 03/25/19 1,690 1,681
8.500%, 02/01/25 1,271 1,328
7.500%, 08/01/25 2,813 2,879
8.500%, 08/01/26 3,030 3,164
7.000%, 11/01/26 3,862 3,890
7.500%, 05/01/27 4,374 4,476
- --------------------------------------------------------
DESCRIPTION PAR (000) VALUE (000)
- --------------------------------------------------------
GNMA
7.500%, 12/15/25 $5,170 $ 5,298
6.500%, 04/15/26 5,719 5,661
7.000%, 06/15/26 1,826 1,848
8.000%, 12/15/26 1,881 1,951
7.500%, 06/15/27 2,455 2,516
---------
TOTAL U.S. GOVERNMENT MORTGAGE-BACKED BONDS
(Cost $50,030) 51,214
---------
ASSET-BACKED SECURITIES -- 13.5%
BankBoston RV Trust,
Series 1997-1, Class A8
6.540%, 02/15/09 1,855 1,877
Carco Auto Loan,
Series 1997-1, Class A
6.689%, 08/15/04 1,510 1,519
Case Equipment Loan Trust,
Series 1997-5, Class A4
6.410%, 09/15/04 1,955 1,962
EQCC, Series 1996-4, Class A5
6.710%, 07/15/11 2,000 2,033
First Plus Home Loan Trust,
Series 1997-2, Class A5
6.820%, 04/10/23 2,200 2,245
First Plus Home Loan Trust,
Series 1997-3, Class A5
6.860%, 10/10/13 2,755 2,796
Green Tree Financial,
Series 1993-3, Class A7
6.400%, 10/15/18 1,785 1,760
Heller Equipment Asset
Receivables Trust,
Series 1997-1, Class A2
6.390%, 05/25/05 1,855 1,865
Metlife Captial Equipment Loan
Trust, Series 1997-A, Class A
6.850%, 05/20/08 1,800 1,840
Money Store Home Equity Loan
Trust, Series 1997-1, Class A3
6.680%, 08/15/12 2,275 2,272
Money Store Home Equity Loan
Trust, Series 1997-D, Class A7
6.485%, 12/15/28 1,735 1,735
Vanderbilt Mortgage Finance,
Series 1997-B, Class 1A4
7.190%, 02/07/14 1,404 1,454
Vanderbilt Mortgage Finance,
Series 1997-C, Class 1A2
6.480%, 09/07/07 400 401
---------
TOTAL ASSET-BACKED SECURITIES
(Cost $23,519) 23,759
---------
NON-AGENCY MORTGAGE-BACKED BONDS -- 4.6%
Citicorp Mortgage Securities,
Series 1997-1, Class A2 CMO
7.250%, 02/25/27 2,060 2,071
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
72
<PAGE>
[SQUARE BULLET] COREFUND FIXED INCOME FUNDS
- --------------------------------------------------------------------------------
- --------------------------------------------------------
DESCRIPTION PAR (000) VALUE (000)
- --------------------------------------------------------
Countrywide Mortgage Broker
Services, Series 1997-A1,
Class A1 CMO
7.000%, 03/25/27 $1,844 $ 1,854
General Electric Capital
Mortgage Services,
Series 1997-3, Class A4 CMO
7.500%, 04/25/27 2,300 2,326
Residential Asset Securization
Trust, Series 1997-A3,
Class A10 CMO
7.250%, 05/25/27 1,835 1,852
---------
TOTAL NON-AGENCY MORTGAGE-BACKED BONDS
(Cost $7,977) 8,103
---------
CORPORATE BONDS -- 22.0%
BANKING -- 4.9%
Banca Commerciale Italiana
8.250%, 07/15/07 973 1,075
Banco Santiago
7.000%, 07/18/07 2,000 1,970
BankBoston
7.000%, 09/15/07 1,740 1,788
First Union Capital I
7.935%, 01/15/27 1,820 1,943
Keycorp
7.500%, 06/15/06 1,805 1,918
---------
8,694
---------
FINANCIAL SERVICES -- 5.8%
Associates Corporation
of North America
6.750%, 07/15/01 700 712
6.500%, 10/15/02 1,810 1,826
CNA Financial
7.250%, 11/15/23 725 742
Fairfax Financial Holdings
8.300%, 04/15/26 1,515 1,693
Lehman Brothers Holdings
7.375%, 05/15/04 1,320 1,371
Loews
6.750%, 12/15/06 1,880 1,913
Santander Finance
6.375%, 02/15/11 1,955 1,906
---------
10,163
---------
INDUSTRIAL -- 11.3%
American Stores
8.000%, 06/01/26 2,110 2,329
Barrick Gold
7.500%, 05/01/07 1,855 1,959
Belo A H
6.875%, 06/01/02 1,202 1,226
- --------------------------------------------------------
DESCRIPTION PAR (000) VALUE (000)
- --------------------------------------------------------
Lasmo USA
6.750%, 12/15/07 $1,200 $ 1,209
Legrand S.A.
8.500%, 02/15/25 2,590 3,121
RJR Nabisco
8.750%, 04/15/04 1,935 2,073
Skandinaviska Enskilda
6.875%, 02/15/09 1,145 1,176
Tele-Communications
7.250%, 08/01/05 1,000 1,028
Time Warner
7.750%, 06/15/05 1,985 2,104
Tosco
7.625%, 05/15/06 2,185 2,335
Weyerhauser
6.950%, 08/01/17 1,244 1,267
---------
19,827
---------
TOTAL CORPORATE BONDS
(Cost $36,955) 38,684
---------
REPURCHASE AGREEMENT -- 3.1%
Morgan Stanley
6.20%, dated 12/31/97,
matures 01/02/98,
repurchase price $5,476,886
(collateralized by U.S. Treasury
Note, par value $5,625,000,
5.50%, 12/31/00; market
value $5,604,188) 5,475 5,475
---------
TOTAL REPURCHASE AGREEMENT
(Cost $5,475) 5,475
---------
TOTAL INVESTMENTS -- 98.8%
(Cost $169,323) 173,488
---------
OTHER ASSETS AND LIABILITIES,
NET-- 1.2% 2,104
---------
NET ASSETS:
Portfolio Shares -- Class Y ($0.001 par
value -- 1 billion authorized) based
on 16,477,588 outstanding shares 169,665
Portfolio Shares -- Class A ($0.001 par
value -- 1 billion authorized) based
on 192,419 outstanding shares 2,020
Accumulated Net Realized Loss
on Investments (258)
Net Unrealized Appreciation
on Investments 4,165
---------
TOTAL NET ASSETS-- 100.0% $175,592
=========
NET ASSET VALUE, OFFERING AND REDEMPTION
PRICE PER SHARE -- CLASS Y $10.53
=========
NET ASSET VALUE AND REDEMPTION
PRICE PER SHARE-- CLASS A $10.53
=========
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.
73
<PAGE>
STATEMENT
OF
NET ASSETS
- --------------------------------------------------------------------------------
AS OF
DECEMBER 31, 1997
(UNAUDITED)
GLOBAL BOND FUND
[PIE CHART OMITTED]
UNITED STATES 20%
UNITED KINGDOM 9%
SWEDEN 5%
NEW ZEALAND 10%
LUXEMBURG 6%
AUSTRALIA 4%
AUSTRIA 3%
CYPRUS 3%
DENMARK 8%
FRANCE 8%
GERMANY 17%
IRELAND 7%
% OF TOTAL PORTFOLIO INVESTMENTS
- --------------------------------------------------------
DESCRIPTION PAR (000) VALUE (000)
- --------------------------------------------------------
FOREIGN BONDS -- 48.8%
AUSTRALIA -- 3.5%
New South Wales Treasury
12.000%, 12/01/01 $ 1,600 $ 1,264
---------
DENMARK -- 7.7%
Kingdom of Denmark
7.000%, 11/10/24 16,850 2,737
---------
FRANCE -- 4.8%
Government of France OAT
6.000%, 10/25/25 10,250 1,726
---------
GERMANY -- 15.5%
Bundesrepublic
6.250%, 01/04/24 9,590 5,553
---------
NEW ZEALAND -- 4.0%
Government of New Zealand
8.000%, 11/15/06 2,320 1,430
---------
SWEDEN -- 4.6%
Government of Sweden
8.000%, 08/15/07 11,500 1,657
---------
UNITED KINGDOM -- 8.7%
Chubu Elecectric Power
6.750%, 08/10/99 950 1,543
Halifax Building
8.375%, 12/15/99 950 1,590
---------
3,133
---------
TOTAL FOREIGN BONDS
(Cost $17,415) 17,500
---------
- --------------------------------------------------------
DESCRIPTION PAR (000) VALUE (000)
- --------------------------------------------------------
COMMERCIAL PAPER -- 26.3%
Bank of Austria
5.340%, 01/12/98 $ 1,000 $ 998
CEDEL Bank
5.720%, 01/16/98 1,000 987
CREGEM North America
5.310%, 01/20/98 1,000 997
DEPFA Bank of Europe
5.740%, 03/05/98 1,500 1,485
EFIC
5.490%, 02/02/98 1,000 995
Helaba Dublin
5.610%, 01/26/98 1,000 996
MTF Securities
5.130%, 01/07/98 1,000 999
New Zealand Dairy
Board Financial
5.700%, 02/26/98 1,000 991
Republic of Cyprus
5.700%, 02/17/98 1,000 993
---------
TOTAL COMMERCIAL PAPER
(Cost $9,441) 9,441
---------
U.S. TREASURY OBLIGATION -- 18.9%
U.S. Treasury Note
4.750%, 09/30/98 6,800 6,758
---------
TOTAL U.S. TREASURY OBLIGATION
(Cost $6,786) 6,758
---------
DEBT OPTIONS -- 0.9%
FRANCE -- 0.1%
Government of France
OAT 6.00% Put,
strike @ 96.93* 10,250,000 3
Government of France
OAT 7.50% Put,
strike @ 113.61* 23,000,000 19
---------
22
---------
GERMANY -- 0.2%
Bundesrepublic 7.375% Put,
strike @ 111.68* 7,300,000 14
Bundesrepublic 6.25% Put,
strike @ 105.00* 6,000,000 71
---------
85
---------
SWEDEN -- 0.1%
Government of Sweden
8.00% Put, strike
@ 113.75* 11,500,000 19
---------
UNITED STATES -- 0.5%
U.S. Treasury Note 6.375%
Call, strike @
101.734375* 5,000,000 192
---------
TOTAL DEBT OPTIONS
(Cost $423) 318
---------
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
74
<PAGE>
[SQUARE BULLET] COREFUND FIXED INCOME FUNDS
- --------------------------------------------------------------------------------
- --------------------------------------------------------
DESCRIPTION PAR (000) VALUE (000)
- --------------------------------------------------------
CURRENCY OPTIONS -- 0.0%
GERMANY -- 0.0%
Deutsche Mark Call,
strike @ 1.7037* $7,000,000 $ 12
---------
JAPAN -- 0.0%
Yen Call, strike @ 122.00* 7,000,000 3
---------
TOTAL CURRENCY OPTIONS
(Cost $294) 15
---------
DEMAND DEPOSIT -- 3.1%
Morgan Stanley
4.750%, 01/01/98 1,119 1,119
---------
TOTAL DEMAND DEPOSIT
(Cost $1,119) 1,119
---------
TOTAL INVESTMENTS -- 98.0%
(Cost $35,478) 35,151
---------
OTHER ASSETS AND LIABILITIES,
NET-- 2.0% 720
---------
NET ASSETS:
Portfolio Shares -- Class Y ($0.001 par
value -- 25 million authorized) based
on 3,817,509 outstanding shares 37,800
Portfolio Shares -- Class A ($0.001 par
value -- 25 million authorized) based
on 26,337 outstanding shares 258
Accumulated net realized loss
on investments (2,014)
Net unrealized appreciation on
forward foreign currency contracts,
foreign currency and translation of
other assets and liabilities in
foreign currency 113
Net unrealized depreciation
on investments (327)
Accumulated net investment income 41
---------
TOTAL NET ASSETS-- 100.0% $35,871
=========
NET ASSET VALUE, OFFERING AND REDEMPTION
PRICE PER SHARE -- CLASS Y $9.33
=========
NET ASSET VALUE AND REDEMPTION
PRICE PER SHARE-- CLASS A $9.32
=========
* NON-INCOME PRODUCING SECURITY
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
INTERMEDIATE MUNICIPAL BOND FUND
[PIE CHART OMITTED]
REVENUE BONDS 48%
CASH EQUIVALENT 3%
GENERAL OBLIGATIONS 38%
PRE-REFUNDED SECURITIES 11%
% OF TOTAL PORTFOLIO INVESTMENTS
- --------------------------------------------------------
DESCRIPTION PAR (000) VALUE (000)
- --------------------------------------------------------
MUNICIPAL BONDS -- 95.5%
COLORADO -- 1.1%
El Paso County, Colorado GO
5.200%, 12/01/02 $20 $ 21
---------
FLORIDA -- 2.8%
Jacksonville, Florida Electric
Authority Revenue Bond,
Series 3-A
5.200%, 10/01/02 50 52
---------
GEORGIA -- 3.9%
Atlanta, Georgia Water & Sewer
Revenue Bond FGIC
4.500%, 01/01/04 20 20
De Kalb County, Georgia Health
Facilities GO
5.300%, 01/01/03 50 53
---------
73
---------
HAWAII -- 2.8%
Hawaii State GO
5.200%, 06/01/04 50 52
---------
ILLINOIS -- 8.0%
Bloomingdale, Illinois GO
5.450%, 01/01/09 85 89
Illinois State Sales Tax Revenue
Bond, Series S
4.900%, 06/15/07 60 61
---------
150
---------
MARYLAND -- 2.8%
Maryland State Health &
Higher Education Facilities
Authority Revenue Bond,
Johns Hopkins Project
5.125%, 07/01/03 50 52
---------
MASSACHUSETTS -- 2.8%
Massachusetts Bay Transportation
Authority Revenue Bond, Series A
5.300%, 03/01/05 50 53
---------
75
<PAGE>
STATEMENT
OF
NET ASSETS
- --------------------------------------------------------------------------------
AS OF
DECEMBER 31, 1997
(UNAUDITED)
INTERMEDIATE MUNICIPAL BOND FUND (CONCLUDED)
- --------------------------------------------------------
DESCRIPTION PAR (000) VALUE (000)
- --------------------------------------------------------
NEW JERSEY -- 6.5%
Burlington County, New Jersey
Community Bridge Systems
Revenue Bond, Callable
10/01/03 at 101 CG
5.050%, 10/01/04 $ 50 $ 52
Medford Township, New Jersey
Board of Education GO FGIC
5.950%, 02/01/03 65 70
---------
122
---------
PENNSYLVANIA -- 64.8%
Allegheny County, Pennsylvania,
Series C-33, GO
7.450%, 02/15/98 50 50
Governor Mifflin, Pennsylvania
School District GO AMBAC
4.850%, 11/15/01 50 52
Lehigh County, Pennsylvania
GO FGIC
5.125%, 11/15/08 110 114
Luzerne County, Pennsylvania,
Series A, GO, Pre-Refunded
09/15/00 at 100 FGIC
5.850%, 09/15/02 50 52
Pennsylvania State Higher
Education Facilities Authority
Hospital Revenue Bond,
Thomas Jefferson University
Project, Pre-Refunded
01/01/98 at 102
8.000%, 01/01/18 85 87
Pennsylvania State Industrial
Development Authority
Revenue Bond AMBAC
5.000%, 07/01/04 100 104
Pennsylvania State Infrastructure
Authority Revenue Bond for
Pennvest Loan Pool Project MBIA
6.000%, 09/01/03 65 71
Pennsylvania State Turnpike
Commission Revenue Bond,
Series 1, Pre-Refunded
12/01/01 at 102 FGIC
7.150%, 12/01/11 50 56
Pennsylvania State Turnpike
Commission Revenue Bond,
Series F, Pre-Refunded 12/01/99
at 102 AMBAC
7.250%, 12/01/17 50 54
Philadelphia, Pennsylvania Airport
Parking Authority Revenue
Bond AMBAC
5.500%, 09/01/05 80 86
- --------------------------------------------------------
DESCRIPTION PAR (000) VALUE (000)
- --------------------------------------------------------
Pittsburgh, Pennsylvania School
District, Series A, GO FGIC
4.850%, 09/01/03 $100 $ 103
Pittsburgh, Pennsylvania Water
and Sewer Authority Revenue
Bond, Series A FGIC
4.800%, 09/01/06 70 72
Reading, Pennsylvania Parking
Authority Revenue Bond MBIA
4.950%, 11/15/02 50 52
Scranton-Lackawana, Pennsylvania
Health and Welfare Authority
Revenue Bond for Mercy Health
Project, Series B MBIA
5.000%, 01/01/06 50 52
University of Pittsburgh,
Pennsylvania Revenue Bond for
University Capital Projects FGIC
5.050%, 06/01/10 90 93
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 62
---------
1,212
---------
TOTAL MUNICIPAL BONDS
(Cost $1,731) 1,787
---------
CASH EQUIVALENT -- 2.8%
SEI Tax Exempt Trust Institutional
Tax Free Portfolio 52 52
---------
TOTAL CASH EQUIVALENT
(Cost $52) 52
---------
TOTAL INVESTMENTS -- 98.3%
(Cost $1,783) 1,839
---------
OTHER ASSETS AND LIABILITIES,
NET-- 1.7% 33
---------
NET ASSETS:
Portfolio Shares -- Class Y ($0.001 par
value -- 100 million authorized) based
on 88,385 outstanding shares 919
Portfolio Shares -- Class A (unlimited
authorization -- no par value) based
on 94,207 outstanding shares 977
Accumulated Net Realized Loss
on Investments (80)
Net Unrealized Appreciation
on Investments 56
---------
TOTAL NET ASSETS-- 100.0% $1,872
=========
NET ASSET VALUE, OFFERING AND REDEMPTION
PRICE PER SHARE -- CLASS Y $10.25
=========
NET ASSET VALUE AND REDEMPTION
PRICE PER SHARE-- CLASS A $10.25
=========
(A) VARIABLE RATE SECURITY -- THE RATE REFLECTED ON THE STATEMENT OF NET ASSETS
IS THE RATE IN EFFECT ON DECEMBER 31, 1997.
AMBAC -- AMERICAN MUNICIPAL BOND ASSURANCE COMPANY
CG -- COUNTY GUARANTY
FGIC -- FINANCIAL GUARANTY INSURANCE COMPANY
GO -- GENERAL OBLIGATION
MBIA -- MUNICIPAL BOND INVESTORS ASSURANCE
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
76
<PAGE>
[SQUARE BULLET] COREFUND FIXED INCOME FUNDS
- --------------------------------------------------------------------------------
PENNSYLVANIA MUNICIPAL BOND FUND
[PIE CHART OMITTED]
TAX ANTICIPATION NOTES 3%
REVENUE BONDS 70%
CASH EQUIVALENT 1%
GENERAL OBLIGATIONS 25%
PRE-REFUNDED SECURITIES 1%
% OF TOTAL PORTFOLIO INVESTMENTS
- --------------------------------------------------------
DESCRIPTION PAR (000) VALUE (000)
- --------------------------------------------------------
MUNICIPAL BONDS -- 102.2%
OHIO -- 2.9%
Cleveland, Ohio Bond Anticipation
Notes, Series B
4.500%, 10/01/99 $500 $ 503
---------
PENNSYLVANIA -- 99.3%
Allegheny County, Pennsylvania
GO, Series C-43, Callable
09/15/04 at 100 MBIA
5.875%, 09/15/10 60 64
Allegheny County, Pennsylvania
Hospital Development Authority
Revenue Bond for Mercy
Hospital of Pittsburgh AMBAC
6.450%, 04/01/01 200 214
Allegheny County, Pennsylvania
Hospital Development Authority
Revenue Bond for Montefiore
Hospital Association
5.800%, 10/01/03 110 116
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 27
Allegheny County, Pennsylvania
Hospital Development Authority
Revenue Bonds for Allegheny
Health Center - UPMC
Health, Series B
5.000%, 07/01/16 500 489
Allegheny County, Pennsylvania
Redevelopment Authority
Revenue Bond for Home
Improvement Loan Project,
Series A, Callable 02/01/04
at 102 FHA
5.700%, 02/01/07 10 10
- --------------------------------------------------------
DESCRIPTION PAR (000) VALUE (000)
- --------------------------------------------------------
Allegheny County, Pennsylvania
Sanitation Authority Sewer
Revenue Bond, Series B,
Pre-Refunded 06/01/99
at 100 FGIC
7.450%, 12/01/09 $130 $ 136
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 70
Bucks County, Pennsylvania
Community College Authority
Revenue Bond
5.500%, 06/15/14 300 314
Center City District, Pennsylvania
Business Improvement
Assessment Bond, Callable
12/01/07 at 100 AMBAC
5.600%, 12/01/08 60 65
Central Bucks, Pennsylvania
School District GO,
Callable 02/01/01 at 100
6.600%, 02/01/03 175 187
Crawford, Pennsylvania Central
School District GO FGIC
7.000%, 02/15/05 100 116
Dauphin County, Pennsylvania
Dauphin County General
Authority School District
Pooled Financing
Program II AMBAC
4.450%, 09/01/32 500 500
Delaware County, Pennsylvania GO
7.100%, 12/01/98 170 170
5.500%, 10/01/15 75 78
Delaware County, Pennsylvania
Revenue Bond for Villanova
University AMBAC
5.400%, 08/01/08 200 213
Dover Township, Pennsylvania
Sewer Authority Revenue Bond
6.250%, 05/01/12 20 22
Easton, Pennsylvania Area
Sewer Authority Revenue
Bonds, Series A FSA
4.200%, 12/01/01 575 574
5.000%, 12/01/14 500 496
Exeter Township, Pennsylvania
General Obligation Bonds,
Series B FGIC
4.800%, 07/15/09 500 509
Hampden Township, Pennsylvania
Sewer Authority Special
Obligation Bond, Callable
10/01/96 at 100
5.350%, 04/01/03 95 98
Hollidaysburg, Pennsylvania Sewer
Authority Revenue Bonds
5.000%, 12/01/18 1,000 979
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
77
<PAGE>
STATEMENT
OF
NET ASSETS
- --------------------------------------------------------------------------------
AS OF
DECEMBER 31, 1997
(UNAUDITED)
PENNSYLVANIA MUNICIPAL BOND FUND (CONCLUDED)
- --------------------------------------------------------
DESCRIPTION PAR (000) VALUE (000)
- --------------------------------------------------------
Keystone Oaks, Pennsylvania
School District GO FGIC
5.000%, 09/01/11 $500 $ 506
Lehigh County, Pennsylvania
General Purpose Authority
Revenue Bonds for Muhlenberg
College Project AMBAC
4.150%, 08/01/02 300 298
Lower Burrell, Pennsylvania City
Municipal Sewer Authority
Revenue Bond AMBAC
5.125%, 02/01/16 250 250
Lower Merion Township,
Pennsylvania GO, Callable
08/01/02 at 100
5.625%, 08/01/05 100 105
Manheim, Pennsylvania Central
School District GO, Callable
05/15/04 at 100 FGIC
6.100%, 05/15/14 100 107
Millcreek Township, Pennsylvania
Sewer Authority Revenue Bond,
Callable 11/01/99 at 100 MBIA
6.000%, 11/01/06 150 155
Montgomery County, Pennsylvania
Higher Education and Health
Authority Revenue Bond for
Abington Memorial Hospital,
Series A AMBAC
5.125%, 06/01/14 250 250
Neshaminy, Pennsylvania
Neshaminy School District
GO FGIC
5.250%, 02/15/07 500 532
North Wales, Pennsylvania Water
Authority Revenue Bond
Pre-Refunded 11/01/04 at 100
6.750%, 11/01/10 100 114
Northampton County,
Pennsylvania Higher Education
Authority Revenue Bond for
Lehigh University, Series A MBIA
5.750%, 11/15/18 150 157
Pennsylvania Housing Finance
Agency Single Family
Mortgage - 55 Revenue Bond
4.700%, 10/01/01 100 102
Pennsylvania State Convention
Center Authority Revenue Bond,
Series A FGIC
6.700%, 09/01/16 75 89
Pennsylvania State GO
5.125%, 09/15/04 450 471
5.000%, 11/15/12 500 506
Pennsylvania State GO, Series 2
6.000%, 07/01/05 25 28
6.250%, 07/01/11 60 69
Pennsylvania State GO,
Third Series
5.000%, 09/01/07 250 259
- --------------------------------------------------------
DESCRIPTION PAR (000) VALUE (000)
- --------------------------------------------------------
Pennsylvania State GO,
Third Series, Callable
09/01/03 at 101
5.000%, 09/01/12 $350 $ 352
Pennsylvania State Higher
Education Facilities Authority
Health Services Revenue Bond
for Allegheny/Delaware Valley,
Series A MBIA
5.500%, 11/15/08 400 433
Pennsylvania State Higher
Education Facilities Authority
Revenue Bond for
Health Services, Series A,
Callable 01/01/04 at 102
6.000%, 01/01/10 100 109
Pennsylvania State Higher
Education Facilities Authority
Revenue Bond for Thomas
Jefferson University, Series A,
Callable 07/01/99 at 102
6.000%, 07/01/19 150 155
Pennsylvania State Higher
Education Facilities Authority
Revenue Bond for University of
Pennsylvania, Series B
5.700%, 01/01/11 150 159
5.850%, 09/01/13 100 106
Pennsylvania State Higher
Educational Facilities Authority
Revenue Bond for
University of Pennsylvania
Project, Series B
5.250%, 01/01/07 500 528
Pennsylvania State Housing
Finance Agency Revenue
Bond, Series C
6.400%, 07/01/12 300 318
Pennsylvania State Industrial
Development Authority
Revenue Bond AMBAC
5.800%, 07/01/09 250 276
6.000%, 07/01/09 305 342
6.000%, 01/01/12 100 108
Pennsylvania State Industrial
Development Authority
Revenue Bond for Economic
Development AMBAC
6.000%, 07/01/08 600 673
Pennsylvania State Industrial
Development Authority Revenue
Bond, State Infrastructure
Investment Authority for
Pennvest Loan Pool MBIA
6.000%, 09/01/04 400 438
Pennsylvania State Turnpike
Commission Revenue
Bond, Series P
5.800%, 12/01/06 75 80
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
78
<PAGE>
[SQUARE BULLET] COREFUND FIXED INCOME FUNDS
- --------------------------------------------------------------------------------
- --------------------------------------------------------
DESCRIPTION PAR (000) VALUE (000)
- --------------------------------------------------------
Pennsylvania State Turnpike
Commission Revenue Bond,
Series O, Callable 12/01/02
at 102 FGIC
5.900%, 12/01/08 $125 $ 135
Pennsylvania State Turnpike
Commission Revenue
Bond, Series P
5.100%, 12/01/99 150 153
Pennsylvania State University
Revenue Bond,
Callable 03/01/04 at 100
6.150%, 03/01/05 185 201
Philadelphia, Pennsylvania Parking
Authority Revenue Bond
5.750%, 09/01/07 400 439
Philadelphia, Pennsylvania
Industrial Authority
Revenue Bond
5.250%, 11/15/09 500 519
Philadelphia, Pennsylvania
Hospitals and Higher Education
Facilities Authority Revenue
Bond for Pennsylvania
Hospital, Series A FGIC
5.250%, 02/15/14 100 101
Pittsburgh, Pennsylvania GO,
Series D, Callable 09/01/02
at 102 AMBAC
6.125%, 09/01/17 25 27
Radnor Township, Pennsylvania
GO, Callable 05/01/06 at 100
5.250%, 11/01/16 200 205
Scranton-Lackawana, Pennsylvania
Health and Welfare Authority
Revenue Bond Mercy Health
Project, Series B MBIA
5.000%, 01/01/06 250 259
Scranton-Lackawana, Pennsylvania
Health and Welfare Authority
Revenue Bonds for Community
Medical Center Project
4.500%, 07/01/04 800 805
Scranton-Lackawanna,
Pennsylvania Health and
Welfare Authority Revenue
Bond for University of
Scranton, Series A
6.150%, 03/01/03 150 162
Seneca Valley, Pennsylvania GO
5.850%, 02/15/15 105 111
- --------------------------------------------------------
DESCRIPTION PAR (000) VALUE (000)
- --------------------------------------------------------
University of Pittsburgh,
Pennsylvania Unrefunded
Balance of Series A Revenue
Bonds MBIA
6.125%, 06/01/21 $ 40 $ 43
West View, Pennsylvania
Municipal Authority Water
Revenue Bonds FGIC
5.150%, 11/15/17 615 621
York, Pennsylvania City School
District GO, Callable
03/01/03 at 100 FGIC
5.600%, 03/01/07 75 79
----------
17,382
----------
TOTAL MUNICIPAL BONDS
(Cost $17,250) 17,885
----------
CASH EQUIVALENT -- 1.2%
SEI Tax Exempt Trust Institutional
Tax Free Portfolio 216 216
----------
TOTAL CASH EQUIVALENT
(Cost $216) 216
----------
TOTAL INVESTMENTS -- 103.4%
(Cost $17,466) 18,101
----------
OTHER ASSETS AND LIABILITIES -- (3.4%)
Liabilities - Investment Securities Purchased (980)
Other Assets and Liabilities 381
----------
TOTAL OTHER ASSETS AND LIABILITIES, NET (599)
----------
NET ASSETS:
Portfolio Shares -- Class Y ($0.001 par
value -- 100 million authorized shares)
based on 1,198,485 outstanding shares 12,448
Portfolio Shares -- Class A ($0.001 par
value -- 100 million authorized shares)
based on 425,928 outstanding shares 4,475
Accumulated Net Realized Loss
on Investments (57)
Net Unrealized Appreciation
on Investments 636
----------
TOTAL NET ASSETS-- 100.0% $17,502
==========
NET ASSET VALUE, OFFERING AND REDEMPTION
PRICE PER SHARE -- CLASS Y $10.77
==========
NET ASSET VALUE AND REDEMPTION
PRICE PER SHARE-- CLASS A $10.78
==========
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.
79
<PAGE>
STATEMENT
OF
NET ASSETS
- --------------------------------------------------------------------------------
AS OF
DECEMBER 31, 1997
(UNAUDITED)
NEW JERSEY MUNICIPAL BOND FUND
[PIE CHART OMITTED]
REVENUE BONDS 45%
CASH EQUIVALENTS 3%
GENERAL OBLIGATIONS 52%
% OF TOTAL PORTFOLIO INVESTMENTS
- --------------------------------------------------------
DESCRIPTION PAR (000) VALUE (000)
- --------------------------------------------------------
MUNICIPAL BONDS -- 96.1%
NEW JERSEY -- 96.1%
Bayonne, New Jersey GO FGIC
5.900%, 05/01/08 $150 $ 162
Burlington County, New Jersey GO
5.200%, 10/01/05 80 83
Cherry Hill Township,
New Jersey GO
5.900%, 06/01/05 50 54
Flemington-Raritan, New Jersey
Regional School District GO
5.700%, 05/01/06 50 54
Manalapan Township, New Jersey
Fire District Number 1 GO
5.300%, 12/15/99 80 82
Marlboro Township, New Jersey
Board of Education GO FGIC
5.500%, 07/15/09 40 42
Middlesex County New Jersey
Revenue Bond FGIC
5.125%, 12/01/16 70 70
Monmouth County, New Jersey
Improvement Authority
Revenue Bond CG
6.625%, 12/01/05 40 43
New Jersey Health Care Facilities
Finance Authority Revenue Bond
for Bridgeton Hospital Association
Project, Series B
6.000%, 07/01/13 50 55
New Jersey Health Care Facilities
Finance Authority Revenue Bond
for Burlington County Memorial
Hospital Project
6.000%, 07/01/12 50 54
New Jersey State Economic
Development Authority Revenue
Bond for Peddie School
Project, Series A
5.400%, 02/01/06 50 53
- --------------------------------------------------------
DESCRIPTION PAR (000) VALUE (000)
- --------------------------------------------------------
New Jersey State Economic
Development Authority Revenue
Bond for Rutgers State
University-Civic Square AMBAC
6.125%, 07/01/24 $ 55 $ 59
New Jersey State Educational
Facilities Authority Revenue
Bond for Princeton University
Project, Series A
5.500%, 07/01/04 100 108
New Jersey State Educational
Facilities Authority Revenue
Bond for University of Medicine
and Dentistry, Series B AMBAC
5.250%, 12/01/13 60 62
New Jersey State Transportation
Authority Revenue Bond MBIA
5.000%, 06/15/15 100 99
New York & New Jersey States
Port Authority Revenue
Bond, Series 81
5.700%, 08/01/07 50 53
North Bergen Township,
New Jersey GO AMBAC
5.000%, 08/15/09 75 78
North Brunswick Township,
New Jersey Board of
Education GO
6.300%, 02/01/12 150 167
North Brunswick Township,
New Jersey Board of Education
GO FGIC
5.000%, 02/01/12 100 101
North Brunswick Township,
New Jersey GO
6.125%, 05/15/04 24 26
North New Jersey District Water
Supply Revenue Bond MBIA
5.050%, 11/15/11 90 92
Ocean County, New Jersey GO
5.650%, 07/01/03 75 80
Ocean County, New Jersey
Utilities Authority Wastewater
Revenue Bond
5.125%, 01/01/11 75 77
Secaucus, New Jersey Utilities
Authority Sewer Revenue
Bond, Series A
6.100%, 12/01/10 60 67
South Brunswick Township,
New Jersey GO
5.950%, 08/01/14 100 108
South Monmouth, New Jersey
Regional Sewer Authority
Revenue Bond MBIA
5.550%, 01/15/06 50 54
West Windsor Township,
New Jersey Parking Authority
Revenue Bond
6.100%, 12/01/12 50 55
----------
2,038
----------
TOTAL MUNICIPAL BONDS
(Cost $1,934) 2,038
----------
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
80
<PAGE>
[SQUARE BULLET] COREFUND MONEY MARKET FUNDS
- --------------------------------------------------------------------------------
- --------------------------------------------------------
DESCRIPTION PAR (000) VALUE (000)
- --------------------------------------------------------
CASH EQUIVALENT -- 2.8%
SEITax Exempt Trust Institutional
Tax Free Portfolio $58 $ 59
--------
TOTAL CASH EQUIVALENT
(Cost $59) 59
--------
TOTAL INVESTMENTS -- 98.9%
(Cost $1,993) 2,097
--------
OTHER ASSETS AND LIABILITIES,
NET-- 1.1% 23
--------
NET ASSETS:
Portfolio Shares -- Class Y ($0.001 par
value -- 100 million authorized) based
on 153,520 outstanding shares 1,513
Portfolio Shares -- Class A ($0.001 par
value -- 100 million authorized) based
on 49,310 outstanding shares 507
Accumulated Net Realized Loss
on Investments (4)
Net Unrealized Appreciation
on Investments 104
--------
TOTAL NET ASSETS-- 100.0% $2,120
========
NET ASSET VALUE AND REDEMPTION
PRICE PER SHARE-- CLASS Y $10.46
========
NET ASSET VALUE AND REDEMPTION
PRICE PER SHARE-- CLASS A $10.45
========
AMBAC -- AMERICAN MUNICIPAL BOND ASSURANCE COMPANY
CG -- COUNTY GUARANTY
FGIC -- FINANCIAL GUARANTY INSURANCE COMPANY
FSA --FINANCIAL SECURITY ASSURANCE
GO -- GENERAL OBLIGATION
MBIA -- MUNICIPAL BOND INVESTORS ASSURANCE
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
TREASURY RESERVE
[PIE CHART OMITTED]
U.S. TREASURY SECURITIES 34%
CASH EQUIVALENTS 66%
% OF TOTAL PORTFOLIO INVESTMENTS
- --------------------------------------------------------
DESCRIPTION PAR (000) VALUE (000)
- --------------------------------------------------------
U.S. TREASURY OBLIGATIONS -- 34.4%
U.S. Treasury Bills+
5.700%, 01/08/98 $ 8,500 $ 8,491
5.180%, 01/22/98 39,000 38,884
5.587%, 02/05/98 7,000 6,964
5.650%, 03/05/98 10,000 9,906
5.797%, 04/02/98 10,000 9,861
5.793%, 04/30/98 10,000 9,818
5.580%, 05/28/98 10,000 9,783
5.530%, 06/25/98 10,000 9,744
5.572%, 07/23/98 10,000 9,703
5.544%, 08/20/98 10,000 9,658
U.S. Treasury Notes
5.580%, 01/31/98 10,000 9,995
5.600%, 01/31/98 15,000 15,000
5.690%, 07/31/98 15,000 14,962
5.780%, 08/15/98 10,000 10,005
5.610%, 08/31/98 15,000 15,004
5.630%, 09/30/98 5,000 4,969
5.640%, 09/30/98 10,000 10,026
5.650%, 10/31/98 10,000 10,017
5.730%, 11/15/98 15,000 14,970
5.740%, 11/30/98 15,000 14,985
U.S. Treasury STRIPS
5.710%, 02/15/98 10,000 9,933
5.725%, 05/15/98 14,600 14,305
5.735%, 08/15/98 20,000 19,319
--------
TOTAL U.S. TREASURY OBLIGATIONS
(Cost $286,302) 286,302
--------
REPURCHASE AGREEMENTS -- 65.8%
Aubrey Lanston
5.25%, dated 12/31/97, matures
01/02/98, repurchase price
$37,217,852 (collateralized by
U.S. Treasury Note, par value
$38,190,000 5.625%, 12/31/02;
market value $38,178,543) 37,207 37,207
81
<PAGE>
STATEMENT
OF
NET ASSETS
- --------------------------------------------------------------------------------
AS OF
DECEMBER 31, 1997
(UNAUDITED)
TREASURY RESERVE (CONCLUDED)
- --------------------------------------------------------
DESCRIPTION PAR (000) VALUE (000)
- --------------------------------------------------------
Goldman Sachs
6.35%, dated 12/31/97, matures
01/02/98, repurchase price
$19,506,879 (collateralized by
U.S. Treasury Note, par value
$19,120,000, 6.875%,
03/31/00; market
value $19,945,984) $ 19,500 $ 19,500
Hong Kong Shanghai Bank
6.40%, dated 12/31/97, matures
01/02/98, repurchase price
$200,071,111 (collateralized
by various U.S. Treasury Notes,
ranging in par value $21,780,000-
50,000,000, 6.375%-7.125%,
04/30/99-04/30/00; total
market value $204,152,180) 200,000 200,000
Merrill Lynch
6.40%, dated 12/31/97, matures
01/02/98, repurchase price
$30,010,667 (collateralized by
various U.S. Treasury Notes,
ranging in par value $12,590,000-
$15,810,000, 8.00%,
05/15/01; total market
value $30,697,720) 30,000 30,000
Morgan Stanley
6.20%, dated 12/31/97, matures
01/02/98, repurchase price
$30,010,333 (collateralized by
U.S. Treasury Note, par value
$30,810,000, 5.50%, 12/31/00;
market value $30,696,003) 30,000 30,000
State Street Bank
5.50%, dated 12/31/97, matures
01/02/98, repurchase price
$200,061,111 (collateralized by
various U.S. Treasury Notes,
ranging in par value $13,990,000-
$50,000,000, 6.125%,
03/31/98; total market
value $204,152,580) 200,000 200,000
- --------------------------------------------------------
DESCRIPTION PAR (000) VALUE (000)
- --------------------------------------------------------
Swiss Bank
6.40%, dated 12/31/97, matures
01/02/98, repurchase price
$30,010,667 (collateralized by
various U.S. Treasury Notes,
ranging in par value $12,790,000-
$15,675,000, 7.50%,
05/15/02; total market
value $30,736,507) $30,000 $ 30,000
--------
TOTAL REPURCHASE AGREEMENTS
(Cost $546,707) 546,707
--------
TOTAL INVESTMENTS -- 100.2%
(Cost $833,009) 833,009
--------
OTHER ASSETS AND LIABILITIES,
NET-- (0.2%) (1,740)
--------
NET ASSETS:
Portfolio Shares -- Class Y ($0.001 par
value -- 1,250 million authorized) based
on 806,957,000 outstanding shares 806,957
Portfolio Shares -- Class C ($0.001 par
value -- 1,250 million authorized) based
on 24,292,618 outstanding shares 24,292
Accumulated Net Realized Gain
on Investments 20
--------
TOTAL NET ASSETS-- 100.0% $831,269
========
NET ASSET VALUE AND REDEMPTION
PRICE PER SHARE-- CLASS Y $1.00
========
NET ASSET VALUE AND REDEMPTION
PRICE PER SHARE-- CLASS C $1.00
========
+ EFFECTIVE YIELD
STRIPS -- SEPARATELY TRADED REGISTERED INTEREST AND PRINCIPAL SECURITIES
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
82
<PAGE>
[SQUARE BULLET] COREFUND MONEY MARKET FUNDS
- --------------------------------------------------------------------------------
CASH RESERVE
CASH RESERVE
[PIE CHART OMITTED]
U.S. GOVERNMENT OBLIGATIONS 6%
CASH EQUIVALENTS 14%
CORPORATE OBLIGATIONS 80%
% OF TOTAL PORTFOLIO INVESTMENTS
- --------------------------------------------------------
DESCRIPTION PAR (000) VALUE (000)
- --------------------------------------------------------
COMMERCIAL PAPER -- 50.7%
BANKING -- 6.0%
Banc One Funding
5.830%, 01/29/98 $ 9,262 $ 9,220
5.838%, 02/09/98 10,000 9,937
5.840%, 02/13/98 10,000 9,931
NationsBank
5.858%, 01/30/98 10,000 9,953
5.813%, 03/17/98 14,000 13,833
Society Generale
5.900%, 06/16/98 9,000 8,996
--------
61,870
--------
FINANCIAL SERVICES -- 30.7%
Aig Funding
5.806%, 07/31/98 12,100 11,704
Asset Securitization Coop
5.679%, 02/04/98 10,000 9,947
5.800%, 02/12/98 10,000 9,932
5.810%, 02/27/98 10,000 9,909
Caisse de Depots En
Consignations
5.678%, 03/17/98 20,000 19,770
Cafco
6.653%, 01/02/98 20,000 19,996
5.837%, 02/19/98 10,000 9,921
Ciesco
5.809%, 02/17/98 9,500 9,429
5.801%, 03/03/98 19,000 18,816
Credit Agricole USA
5.753%, 01/16/98 10,000 9,976
Eureka Securitization
5.701%, 02/03/98 10,000 9,949
5.854%, 02/25/98 10,000 9,912
5.835%, 03/23/98 15,000 14,806
- --------------------------------------------------------
DESCRIPTION PAR (000) VALUE (000)
- --------------------------------------------------------
Goldman Sachs
5.709%, 05/07/98 $10,000 $ 9,806
Merrill Lynch
5.679%, 01/30/98 10,000 9,955
5.709%, 03/31/98 5,000 4,931
5.803%, 05/13/98 10,000 9,792
5.812%, 05/29/98 10,000 9,768
Morgan Stanley
5.673%, 01/21/98 5,000 4,984
5.679%, 02/04/98 10,000 9,947
Morgan Stanley (A)
5.915%, 01/13/98 15,500 15,500
Met Life Funding
5.757%, 01/13/98 10,000 9,981
5.758%, 01/27/98 10,000 9,959
5.937%, 02/05/98 4,050 4,027
New Center Asset Trust
5.674%, 01/30/98 7,000 6,968
5.784%, 03/09/98 10,000 9,894
5.699%, 03/30/98 14,000 13,810
Norwest Financial
5.661%, 01/20/98 15,250 15,205
Swedish Export Credit
5.818%, 05/07/98 10,000 9,801
--------
318,395
--------
INDUSTRIAL -- 12.4%
BP America
6.402%, 01/02/98 18,000 17,997
Campbell Soup
5.753%, 05/26/98 12,475 12,194
Ford Motor Credit
5.718%, 03/30/98 11,780 11,620
General Electric Capital
5.646%, 02/03/98 5,000 4,975
5.715%, 02/27/98 10,000 9,911
5.736%, 04/23/98 14,950 14,690
Mitsubishi International
5.826%, 01/12/98 13,300 13,277
Pitney Bowes Credit
6.066%, 01/14/98 2,016 2,012
5.656%, 01/20/98 15,000 14,956
Procter & Gamble
5.777%, 04/14/98 16,000 15,740
Southwestern Bell
5.631%, 01/29/98 11,000 10,953
--------
128,325
--------
UTILITIES -- 1.6%
National Rural Utilities
5.617%, 01/09/98 7,100 7,091
5.651%, 01/21/98 10,000 9,969
--------
17,060
--------
TOTAL COMMERCIAL PAPER
(Cost $525,650) 525,650
--------
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
83
<PAGE>
STATEMENT
OF
NET ASSETS
- --------------------------------------------------------------------------------
AS OF
DECEMBER 31, 1997
(UNAUDITED)
CASH RESERVE (CONCLUDED)
- --------------------------------------------------------
DESCRIPTION PAR (000) VALUE (000)
- --------------------------------------------------------
U.S. GOVERNMENT AGENCY OBLIGATIONS -- 6.2%
FFCB (A)
5.520%, 01/02/98 $ 5,250 $ 5,248
FHLB (A)
5.899%, 01/07/98 4,200 4,199
FHLB
5.810%, 01/23/98 11,000 11,000
5.805%, 02/13/98 13,400 13,400
5.850%, 03/17/98 5,000 5,000
FNMA (A)
5.894%, 01/06/98 15,000 14,995
SLMA (A)
5.779%, 01/06/98 10,000 10,000
--------
TOTAL U.S. GOVERNMENT AGENCY OBLIGATIONS
(Cost $63,842) 63,842
--------
CORPORATE OBLIGATIONS -- 11.5%
BANKING -- 0.2%
Morgan Guaranty (A)
6.230%, 01/02/98 2,000 2,000
--------
FINANCIAL SERVICES -- 8.8%
Abbey National Treasury
Services (A)
5.575%, 01/02/98 20,000 19,983
5.650%, 01/02/98 17,000 16,999
Associates Corporation of
North America (A)
6.120%, 01/02/98 15,000 14,998
Credit Suisse First Boston (A)
5.670%, 01/02/98 10,000 10,000
5.921%, 01/13/98 10,000 10,000
Goldman Sachs
6.100%, 04/15/98 6,825 6,826
Paccar Financial (A)
5.841%, 01/20/98 12,000 11,997
--------
90,803
--------
INDUSTRIAL -- 2.5%
Ford Motor Credit
5.700%, 01/02/98 15,000 14,999
6.350%, 02/12/98 1,800 1,801
Exxon Capital
8.000%, 10/02/98 4,249 4,311
Merck
5.250%, 12/22/98 5,000 4,967
--------
26,078
--------
TOTAL CORPORATE OBLIGATIONS
(Cost $118,881) 118,881
--------
TIME DEPOSITS -- 6.8%
Banque Nationale de Paris
6.625%, 01/02/98 30,000 30,000
State Street Bank
5.500%, 01/02/98 40,000 40,000
--------
TOTAL TIME DEPOSITS
(Cost $70,000) 70,000
--------
- --------------------------------------------------------
DESCRIPTION PAR (000) VALUE (000)
- --------------------------------------------------------
MASTER NOTE -- 0.9%
Associates Corporation of
North America (A)
5.506%, 01/02/98 $ 8,950 $ 8,950
--------
TOTAL MASTER NOTE
(Cost $8,950) 8,950
--------
CERTIFICATES OF DEPOSIT -- 12.2%
Barclays Bank PLC
5.910%, 03/09/98 14,750 14,749
5.940%, 06/19/98 5,000 4,999
Credit Suisse
6.310%, 04/16/98 10,000 10,000
Deutche Bank
5.840%, 10/14/98 5,000 4,998
5.940%, 10/22/98 9,250 9,247
National Westminster Bank
5.860%, 03/10/98 10,000 9,999
5.940%, 06/26/98 15,000 14,996
5.830%, 10/14/98 5,000 4,999
Societe Generale
6.350%, 04/15/98 10,000 10,001
6.080%, 06/09/98 10,000 9,998
Swiss Bank
5.976%, 03/19/98 7,000 7,000
6.020%, 06/12/98 10,000 10,001
5.825%, 10/02/98 10,000 9,997
5.852%, 11/20/98 5,000 4,999
--------
TOTAL CERTIFICATES OF DEPOSIT
(Cost $125,983) 125,983
--------
INSURANCE FUNDING AGREEMENTS -- 6.1%
Allstate (A)
5.696%, 01/01/98 18,000 18,000
Combined Insurance of
America (A)
5.959%, 01/01/98 20,000 20,000
Pacific Mutual Insurance (A)
6.076%, 01/01/98 25,000 25,000
--------
TOTAL INSURANCE FUNDING AGREEMENTS
(Cost $63,000) 63,000
--------
ASSET-BACKED SECURITIES -- 4.3%
Asset Backed Securities
Investment Trust, Series
1997-C, Class N (A)
5.961%, 01/15/98 15,000 15,000
Capita Equipment Receivables
Trust, Series 1996-1, Class A2
5.950%, 07/15/98 1,607 1,607
Case Equipment Loan Trust,
Series 1997-B, Class A1
5.612%, 10/13/98 9,544 9,544
Contimortgage Home Equity
Loan Trust, Series
1997-5, Class A1
5.906%, 12/15/98 8,500 8,500
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
84
<PAGE>
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- --------------------------------------------------------------------------------
- --------------------------------------------------------
DESCRIPTION PAR (000) VALUE (000)
- --------------------------------------------------------
Key Auto Finance Trust,
Series 1997-2, Class A1
5.835%, 01/05/99 $10,000 $ 10,000
----------
TOTAL MORTGAGE RELATED
(Cost $44,651) 44,651
----------
BANKERS ACCEPTANCE -- 1.1%
Toronto Dominion Bank
5.735%, 03/23/98 12,000 11,847
----------
TOTAL BANKERS ACCEPTANCE
(Cost $11,847) 11,847
----------
TOTAL INVESTMENTS -- 99.7%
(Cost $1,032,804) 1,032,804
----------
OTHER ASSETS AND LIABILITIES,
NET-- 0.3% 3,356
----------
NET ASSETS:
Portfolio Shares -- Class Y ($0.001 par
value -- 1 billion authorized) based
on 956,501,408 outstanding shares 956,732
Portfolio Shares -- Class C ($0.001 par
value -- 1 billion authorized) based
on 79,278,426 outstanding shares 79,484
Portfolio Shares -- Class B ($0.001 par
value -- 1 billion authorized) based
on 80,044 outstanding shares 80
Accumulated Net Realized Loss
on Investments (136)
----------
TOTAL NET ASSETS-- 100.0% $1,036,160
==========
NET ASSET VALUE AND REDEMPTION
PRICE PER SHARE-- CLASS Y $1.00
==========
NET ASSET VALUE AND REDEMPTION
PRICE PER SHARE-- CLASS C $1.00
==========
NET ASSET VALUE AND REDEMPTION
PRICE PER SHARE-- CLASS B $1.00
==========
(A) VARIABLE RATE SECURITIES -- THE RATE REFLECTED ON
THE STATEMENT OF NET ASSETS IS THE RATE IN EFFECT ON DECEMBER 31, 1997.
FHLB -- FEDERAL HOME LOAN BANK
FNMA -- FEDERAL NATIONAL MORTGAGE ASSOCIATION
SLMA -- STUDENT LOAN MARKETING ASSOCIATION
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
TAX-FREE RESERVE
[PIE CHART OMITTED]
TAX-EXEMPT COMMERCIAL PAPER 21%
TAX ANTICIPATION NOTES 4%
GENERAL OBLIGATIONS 6%
PRE-REFUNDED SECURITIES 2%
REVENUE BONDS 67%
% OF TOTAL PORTFOLIO INVESTMENTS
- --------------------------------------------------------
DESCRIPTION PAR (000) VALUE (000)
- --------------------------------------------------------
MUNICIPAL BONDS -- 99.1%
ALABAMA -- 0.9%
North Alabama Environmental
Improvement Authority
Reynold Metals Project
(A) (B) (C)
5.000%, 01/02/98 $1,500 $ 1,500
----------
ARIZONA -- 0.9%
Arizona State TRAN (B)
7.400%, 02/09/98 650 661
Flagstaff, Arizona TECP
3.700%, 04/08/98 750 750
----------
1,411
----------
CALIFORNIA -- 1.4%
Los Angeles County
California TRAN
4.500%, 06/30/98 2,000 2,006
Santa Clara, California Electric
Revenue Bond, Series A
(A) (B) (C)
3.400%, 01/07/98 340 340
----------
2,346
----------
COLORADO -- 0.3%
Colorado State TRAN, Series A
4.500%, 06/26/98 500 502
----------
DELAWARE -- 0.8%
Delaware State TECP
3.700%, 04/08/98 750 750
Wilmington, Delaware Franciscan
Health System (A) (B) (C) (D)
5.000%, 01/02/98 300 300
Wilmington, Delaware Hospital
Franciscan Health Systems
Project, Series A
(A) (B) (C) (D)
5.000%, 01/02/98 300 300
----------
1,350
----------
85
<PAGE>
STATEMENT
OF
NET ASSETS
- --------------------------------------------------------------------------------
AS OF
DECEMBER 31, 1997
(UNAUDITED)
TAX-FREE RESERVE (CONTINUED)
- --------------------------------------------------------
DESCRIPTION PAR (000) VALUE (000)
- --------------------------------------------------------
FLORIDA -- 2.5%
Broward County, Florida Housing
Financial Authority Multi-family
Housing Sanctuary Apartments
Project (A) (C)
4.250%, 02/01/09 $ 500 $ 500
Florida Municipal Power TECP
3.650%, 02/11/98 1,700 1,700
Sunshine State Florida TECP
3.750%, 03/27/98 2,000 2,000
----------
4,200
----------
ILLINOIS -- 10.9%
Chicago, Illinois O'Hare
International Airport Revenue
Industrial Lien, Series C (A) (B)
3.650%, 01/07/98 1,500 1,500
Illinois Development Finance
Authority Illinois Power
Company Project, Series B (A)
3.700%, 01/07/98 1,400 1,400
Illinois Development Finance
Authority Revenue Bond
(A) (B) (C)
3.650%, 01/07/98 1,800 1,800
Illinois State Pollution Control
Authority Amoco Oil
Company Project (A) (B)
4.950%, 01/02/98 900 900
Illinois State Sales Tax Revenue
Revenue Bond (B) (D)
8.000%, 06/15/98 3,000 3,115
Illinois State Toll Highway
Authority, Series B
MBIA (A) (B)
3.650%, 01/07/98 4,400 4,400
Schaumburg, Illinois Multi-family
Housing Revenue Bond
(A) (B) (C)
3.950%, 01/02/98 3,500 3,500
St. Charles, Illinois Revenue
Bond (A) (B) (C)
3.750%, 01/07/98 1,300 1,300
----------
17,915
----------
INDIANA -- 4.3%
Chesapeake, Indiana TECP
3.750%, 01/15/98 1,000 1,000
Mt. Vernon, Indiana TECP
3.750%, 04/07/98 1,900 1,900
Gary, Indiana Industrial
Environmental Improvement
Authority U.S. Steel
Corporation Project (A) (B) (C)
4.050%, 01/15/98 1,600 1,600
Hammond, Indiana Pollution
Control Amoco Oil Company
Project (A) (B)
4.950%, 01/02/98 300 300
- --------------------------------------------------------
DESCRIPTION PAR (000) VALUE (000)
- --------------------------------------------------------
Sullivan, Indiana TECP
3.750%, 01/09/98 $1,050 $ 1,050
3.800%, 03/06/98 1,200 1,200
----------
7,050
----------
IOWA -- 0.2%
Des Moines, Iowa Commercial
Development Revenue Bond
Capitol Center III Project
(A) (B)
3.800%, 01/07/98 400 400
----------
KANSAS -- 4.7%
Burlington, Kansas TECP
3.750%, 01/08/98 1,450 1,450
3.700%, 01/16/98 600 600
3.850%, 03/09/98 2,500 2,500
3.850%, 03/10/98 1,200 1,200
3.700%, 04/08/98 600 600
Kansas City, Kansas Highway
Roads Revenue Bonds (B)
9.000%, 07/01/98 1,300 1,333
----------
7,683
----------
KENTUCKY -- 1.8%
Mayfield, Kentucky Multi-City
Lease Revenue Bond Kentucky
League of Cities Funding
Project (A)
3.900%, 01/07/98 2,000 2,000
Pendleton, Kentucky TECP
3.850%, 03/09/98 1,000 1,000
----------
3,000
----------
LOUISIANA -- 3.9%
De Soto Parish, Louisiana
Central Louisiana Electric
Company Pollution Control
Revenue Bond (A) (B)
3.600%, 01/07/98 700 700
Jefferson Parish, Louisiana
Industrial Development Board
George J. Ackel, Sr.
Project (A) (B)
3.850%, 01/07/98 1,850 1,850
Louisiana State Public
Facilities Authority Kenner
Hotel Project (A) (B) (C)
5.100%, 01/02/98 400 400
Saint Charles Parish, Louisiana
Pollution Control Revenue
Shell Oil Company Project,
Series B (A) (B)
4.900%, 01/02/98 1,550 1,550
South Louisiana Port Common
Marine Terminal Revenue
Bond (A) (B) (C)
3.650%, 01/07/98 2,000 2,000
----------
6,500
----------
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
86
<PAGE>
[SQUARE BULLET] COREFUND MONEY MARKET FUNDS
- --------------------------------------------------------------------------------
- ---------------------------------------------------------
DESCRIPTION PAR (000) VALUE (000)
- ---------------------------------------------------------
MICHIGAN -- 1.8%
Delta County, Michigan
Environmental Improvement
Authority Revenue Bond,
Mead Escambia Paper,
Series C (A) (B)
5.100%, 01/02/98 $ 700 $ 700
Michigan State Consumers
Power Project (A) (B)
4.950%, 01/02/98 300 300
Michigan State Storage TECP
3.750%, 02/05/98 2,000 2,000
----------
3,000
----------
MINNESOTA -- 1.9%
Minnesota State GO (D)
6.600%, 08/01/98 3,150 3,199
----------
MISSISSIPPI -- 1.8%
Claiborne County,
Mississippi TECP
3.750%, 02/13/98 1,300 1,300
Jackson County, Mississippi
Chevron USA Incorporated
Project (A) (B)
4.950%, 01/02/98 1,600 1,600
----------
2,900
----------
MISSOURI -- 5.0%
Independence, Missouri TECP
3.850%, 01/16/98 1,050 1,050
Missouri State Development
Finance Board Revenue Bond
(A) (B) (C)
4.500%, 01/02/98 2,700 2,700
Missouri State Environmental
Improvement & Energy
Pollution Control Revenue
Bond (A) (B)
3.950%, 01/02/98 1,800 1,800
Missouri State Health and
Educational Facilities
Authority Washington
University, Series A (A) (B)
5.000%, 01/02/98 300 300
Missouri State Health and
Educational Facilities
Authority Washington
University Series A (A) (B) (C)
5.000%, 01/02/98 400 400
Missouri State Health and
Educational Facilities
Authority GO
4.500%, 09/14/98 2,000 2,008
----------
8,258
----------
MONTANA -- 0.7%
Forsyth, Montana Pollution
Control Portland General
Electric Project (A) (B)
3.700%, 01/07/98 200 200
- --------------------------------------------------------
DESCRIPTION PAR (000) VALUE (000)
- --------------------------------------------------------
Forsyth, Montana Pollution
Control Portland General
Electric Project, Series B
(A) (B)
3.750%, 01/07/98 $ 100 $ 100
Forsyth, Montana Pollution
Control Pacificorp Project,
Series 1988 (A) (B) (C)
4.500%, 01/02/98 900 900
----------
1,200
----------
NEVADA -- 1.8%
Clark County, Nevada Industrial
Development Revenue
Series C (A) (B)
3.850%, 01/07/98 2,000 2,000
Las Vegas, Nevada GO,
Series A FGIC
4.750%, 11/01/98 1,000 1,007
----------
3,007
----------
NEW MEXICO -- 0.6%
Albuquerque, New Mexico
Gross Receipts Revenue
Bond (A) (B) (C)
3.700%, 01/07/98 1,000 1,000
----------
NEW YORK -- 2.1%
New York City, New York
GO (A) (B) (C)
4.000%, 01/02/98 1,500 1,500
4.150%, 01/02/98 1,900 1,900
----------
3,400
----------
NORTH CAROLINA -- 2.2%
Lexington, North Carolina
Lexington Memorial
Hospital Project (A) (B)
5.000%, 01/02/98 1,500 1,500
North Carolina Eastern
Municipal Power (B) (D)
8.000%, 01/02/98 1,305 1,331
Wake County, North Carolina
Carolina Power &
Light Company (A) (B)
3.700%, 01/07/98 800 800
----------
3,631
----------
OHIO -- 0.3%
Ohio State Air Quality Revenue
Bond, Series B (A) (B) (C)
4.500%, 01/02/98 300 300
Ohio State Water Development
Authority Environmental
Mead Company, Series B
(A) (B) (C)
5.000%, 01/02/98 200 200
----------
500
----------
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
87
<PAGE>
STATEMENT
OF
NET ASSETS
- --------------------------------------------------------------------------------
AS OF
DECEMBER 31, 1997
(UNAUDITED)
TAX-FREE RESERVE (CONTINUED)
- ---------------------------------------------------------
DESCRIPTION PAR (000) VALUE (000)
- ---------------------------------------------------------
OREGON -- 0.7%
Port of Portland, Oregon
Pollution Control Revenue
Bond for Reynold Metals
Project (A) (B) (C)
5.000%, 01/02/98 $ 100 $ 100
Port of St. Helens Portland,
Oregon Pollution Control
Revenue Bond (A) (B)
4.950%, 01/02/98 600 600
Umatilla County, Oregon
Franciscan Health System
Revenue Bond, Series A
(A) (B) (C) (D)
5.000%, 01/02/98 300 300
Umatilla County, Oregon
Franciscan Health System
Revenue Bond, Series B
(A) (B) (C) (D)
5.000%, 01/02/98 200 200
----------
1,200
----------
PENNSYLVANIA -- 14.8%
Allegheny County, Pennsylvania
Hospital Development
Presbyterian University
Hospital Project, Series B2
(A) (B) (C)
4.250%, 01/02/98 2,600 2,600
Allegheny County, Pennsylvania
Hospital Development
Presbyterian University
Hospital Project, Series B1
(A) (B) (C)
4.250%, 01/02/98 2,000 2,000
Allegheny County, Pennsylvania
Hospital Development
Presbyterian University
Hospital Project,
Series B3 (A) (B)
4.250%, 01/02/98 1,305 1,305
Beaver County,
Pennsylvania TECP
3.750%, 03/05/98 1,100 1,100
Beaver County, Pennsylvania
Industrial Development
Authority Duquesne Light
Company Project, Series B
(A) (B) (C)
3.650%, 01/07/98 100 100
Lehigh County, Pennsylvania
Industrial Development
Authority Pollution Control
(A) (B)
3.800%, 01/02/98 200 200
Montgomery County,
Pennsylvania TECP
3.850%, 01/22/98 2,600 2,600
3.750%, 02/05/98 1,000 1,000
Montgomery County,
Pennsylvania TECP
3.750%, 02/09/98 2,500 2,500
- --------------------------------------------------------
DESCRIPTION PAR (000) VALUE (000)
- --------------------------------------------------------
Pennsylvania State Higher
Education Authority Carnegie
Mellon University Revenue
Bond, Series D (A) (B)
4.850%, 01/02/98 $ 700 $ 700
Pennsylvania State Higher
Educational Facilities
Authority Hospital Thomas
Jefferson University Project (D)
8.000%, 01/02/98 1,910 1,948
Temple University,
Pennsylvania GO
4.750%, 05/18/98 1,000 1,003
Washington County,
Pennsylvania Lease Revenue
Bond (A) (B) (C)
3.850%, 01/07/98 3,140 3,140
York County, Pennsylvania
Solid Waste and Refuse
Revenue Bonds FGIC
4.750%, 12/01/98 1,500 1,512
York, Pennsylvania General
Authority Revenue
Bond (A) (B)
4.200%, 01/02/98 2,750 2,750
----------
24,458
----------
SOUTH CAROLINA -- 1.1%
Berkley County, South Carolina
Pollution Control Amoco
Chemical Project (A) (B) (C)
4.950%, 01/02/98 900 900
North Charleston, South
Carolina GO (B) (D)
7.500%, 08/01/98 500 520
York County, South Carolina
Pollution Control Revenue
Bond Electric Project,
Series NRU-84N-2 (A) (B)
3.850%, 01/07/98 400 400
----------
1,820
----------
TEXAS -- 14.6%
Camp County, Texas Industrial
Development Corporation
Pollution Control Revenue
Bond Texas Oil and Gas
Project (A) (B)
3.900%, 01/07/98 500 500
Denton County, Texas TAN
5.500%, 09/01/98 930 940
Grapevine, Texas Industrial
Development Authority
American Airlines Project,
Series A4 (A) (B) (C)
5.000%, 01/02/98 100 100
Grapevine, Texas Industrial
Development Authority
American Airlines Project,
Series B4 (A) (B) (C)
5.000%, 01/02/98 900 900
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
88
<PAGE>
[SQUARE BULLET] COREFUND MONEY MARKET FUNDS
- --------------------------------------------------------------------------------
- --------------------------------------------------------
DESCRIPTION PAR (000) VALUE (000)
- --------------------------------------------------------
Grapevine, Texas Industrial
Development Authority
American Airlines Project,
Series A3 (A) (B) (C)
5.000%, 01/02/98 $ 400 $ 400
Grapevine, Texas Industrial
Development Authority
American Airlines Project,
Series B1 (A) (B) (C)
5.000%, 01/02/98 1,500 1,500
Grapevine, Texas Industrial
Development Authority
American Airlines Project,
Series B3 (A) (B) (C)
5.000%, 01/02/98 400 400
Grapevine, Texas Industrial
Development Corporation
American Airlines,
Series A1 (A) (B)
5.000%, 01/02/98 400 400
Grapevine, Texas Industrial
Development Corporation
American Airlines Project,
Series B2 (A) (B)
5.000%, 01/02/98 400 400
Hunt County, Texas Industrial
Development Authority Trico
Industries Incorporated
Project (A) (B)
3.800%, 01/06/98 2,100 2,100
North Central Texas Health
Facilities Development Baylor
Medical Center Project, Series A,
Pre-Refunded @ 102 (D)
7.900%, 05/15/98 500 517
Nueces County, Texas Health
Facilities Authority Driscoll
Childrens Foundation (A) (B)
3.850%, 01/07/98 4,425 4,425
Port Corpus Christi Texas
Industrial Development
Corporation Refunding
Revenue Bonds Series A (A) (B)
3.850%, 01/07/98 2,000 2,000
San Antonio, Texas Electric and
Gas Revenue Bond
Pre-Refunded @ 102 (D)
7.800%, 02/01/98 3,900 3,991
Texas State Higher Education
Authority University and
College Improvement,
Series B FGIC (A) (B)
3.800%, 01/07/98 1,945 1,945
Texas State Southwest Higher
Education Authority Southern
Methodist University
(A) (B) (C)
5.000%, 01/02/98 1,000 1,000
Texas State TRAN, Series A
4.750%, 08/31/98 2,500 2,514
----------
24,032
----------
- --------------------------------------------------------
DESCRIPTION PAR (000) VALUE (000)
- --------------------------------------------------------
UTAH -- 1.3%
Intermountain Power
Agency TECP
3.750%, 02/17/98 $2,100 $ 2,100
----------
VERMONT -- 0.8%
Vermont State Student Loan
Assistance Corporation Student
Loan Revenue Bond (A) (B)
3.800%, 01/02/98 1,335 1,335
----------
VIRGINIA -- 10.2%
Alexandria, Virginia
Redevelopment & Housing
Authority Revenue Bonds,
Multi-Family First Mortgage,
Goodwin Project, Series B
(A) (B) (C)
5.000%, 01/02/98 3,900 3,900
Pennisula Ports, Virginia TECP
3.750%, 01/12/98 1,500 1,500
Petersburg, Virginia Hospital
Authority Revenue Bonds for
Southside Project (A) (B) (C)
5.000%, 01/02/98 1,800 1,800
Portsmouth, Virginia Housing
Development Authority
Revenue Bond (B) (C)
4.000%, 11/01/27 2,255 2,255
Richmond, Virginia Housing
Authority Old Manchester
Project, Series A (A) (B)
4.000%, 01/07/98 3,250 3,250
Virginia State Housing
Revenue Bonds
3.800%, 06/10/98 3,500 3,500
Waynesboro, Virginia
Residential Care Facilities
Revenue Bond (A) (B) (C)
5.000%, 01/02/98 685 685
----------
16,890
----------
WASHINGTON -- 1.5%
Port Kalama, Washington
Conagra Project (A) (B) (C)
3.700%, 01/02/98 1,900 1,900
Washington State Motor Vehicle
Fuel Tax, Series B
6.000%, 01/01/99 500 510
----------
2,410
----------
WEST VIRGINIA -- 0.1%
Putnam County, West Virginia
Industrial Development
Authority FMC Corporation
Project (A) (B)
3.800%, 01/02/98 200 200
----------
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
89
<PAGE>
STATEMENT
OF
NET ASSETS
- --------------------------------------------------------------------------------
AS OF
DECEMBER 31, 1997
(UNAUDITED)
TAX-FREE RESERVE (CONCLUDED)
- --------------------------------------------------------
DESCRIPTION PAR (000) VALUE (000)
- --------------------------------------------------------
WISCONSIN -- 0.2%
Lac Du Flambeau, Wisconsin
Lake Superior Chippewa
Indians Special Obligation
Simpson Electric Project
(A) (B)
3.700%, 01/07/98 $ 400 $ 400
----------
WYOMING -- 3.0%
Gillette County, Wyoming TECP
3.800%, 01/15/98 1,400 1,400
Lincoln County, Wyoming
Pollution Control Revenue
Bond, Series 1984 B (A) (B)
5.100%, 01/02/98 1,200 1,200
Lincoln County, Wyoming
Pollution Control Exxon
Project (A) (B)
4.950%, 01/02/98 600 600
Lincoln County, Wyoming
Resource Recovery Exxon
Project, Series C (A) (B) (C)
5.100%, 01/02/98 500 500
Platte County, Wyoming
Pollution Control (A) (B)
4.500%, 01/02/98 1,100 1,100
Platte County, Wyoming
Pollution Control Revenue
Bond, Series A (A) (B) (C)
4.500%, 01/02/98 100 100
----------
4,900
----------
TOTAL MUNICIPAL BONDS
(Cost $163,697) 163,697
----------
TOTAL INVESTMENTS -- 99.1%
(Cost $163,697) 163,697
----------
OTHER ASSETS AND LIABILITIES,
NET-- 0.9% 1,521
----------
- --------------------------------------------------------
DESCRIPTION VALUE (000)
- --------------------------------------------------------
NET ASSETS:
Portfolio Shares -- Class Y ($0.001 par
value -- 250 million authorized) based
on 152,872,746 outstanding shares $ 152,872
Portfolio Shares -- Class C ($0.001 par
value -- 250 million authorized) based
on 12,374,650 outstanding shares 12,398
Accumulated Net Realized Loss
on Investments (54)
Undistributed Net Investment Income 2
----------
TOTAL NET ASSETS-- 100.0% $165,218
==========
NET ASSET VALUE AND REDEMPTION
PRICE PER SHARE-- CLASS Y $1.00
==========
NET ASSET VALUE AND REDEMPTION
PRICE PER SHARE-- CLASS C $1.00
==========
(A) VARIABLE RATE SECURITIES--THE RATE REFLECTED ON THE STATEMENT OF THE NET
ASSETS IS THE RATE IN EFFECT ON DECEMBER 31, 1997.
(B) PUT OR DEMAND FEATURES EXIST REQUIRING THE ISSUER TO REPURCHASE THE
INSTRUMENT PRIOR TO MATURITY. THE MATURITY DATE SHOWN IS THE LESSOR OF THE
PUT DEMAND OR MATURITY DATE.
(C) SECURITIES ARE HELD IN CONNECTION WITH A LETTER OF CREDIT ISSUED BY A MAJOR
COMMERCIAL BANK OR FINANCIAL INSTITUTION.
FGIC -- FINANCIAL GUARANTY INSURANCE COMPANY
GO -- GENERAL OBLIGATION
TECP -- TAX EXEMPT COMMERCIAL PAPER
TRAN -- TAX AND REVENUE ANTICIPATION NOTE
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
90
<PAGE>
[This page intentionally left blank.]
<PAGE>
STATEMENT
OF
OPERATIONS [SQUARE BULLET] COREFUND
- --------------------------------------------------------------------------------
(000)
COREFUND EQUITY FUNDS
AS OF
DECEMBER 31, 1997
(UNAUDITED)
<TABLE>
<CAPTION>
------------ -------------- --------------
EQUITY CORE EQUITY GROWTH
INDEX FUND FUND(3) EQUITY FUND
------------ -------------- --------------
INVESTMENT INCOME:
<S> <C> <C> <C>
Dividends $ 2,223 $ 3,344 $ 561
Interest 22 138 123
Less: Foreign taxes withheld -- -- --
-------- -------- ---------
Total investment income 2,245 3,482 684
-------- -------- ---------
EXPENSES:
Investment advisory fees 533 2,147 632
Less: waiver of investment advisory fees (318) -- --
Administrative fees 333 725 211
Less: waiver of administrative fees (119) (164) (76)
Transfer agent fees & expenses 36 51 13
Custodian fees -- -- --
Professional fees 5 23 3
Registration & filing fees 8 14 4
12b-1 fees--individual shares -- 23 7
Taxes--other than income 3 13 2
Printing fees 25 57 17
Organizational costs -- -- --
Miscellaneous -- 14 6
-------- -------- ---------
Total expenses 506 2,903 819
-------- -------- ---------
NET INVESTMENT INCOME (LOSS) 1,739 579 (135)
-------- -------- ---------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS, FORWARD FOREIGN CURRENCY
CONTRACTS AND FOREIGN CURRENCY:
Net realized gain from security transactions 5,184 40,986 11,173
Net realized (loss) on forward foreign currency contracts and
foreign currency transactions -- -- --
Net unrealized depreciation on forward foreign currency contracts and
translation of assets and liabilities in foreign currencies -- -- --
Net change in unrealized appreciation (depreciation) on investments 17,916 20,773 10,360
-------- -------- ---------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS $24,839 $62,338 $21,398
======== ======== =========
COMPUTATION OF NET ASSET VALUE AND OFFERING PRICE - DECEMBER 31, 1997:
CLASS Y
1Net asset value, offer and redemption price $ 39.65 $ 20.60 $ 16.33
======== ======== =========
CLASS A
1Net asset value, redemption price
Maximum sales charge of 5.50% 39.66 20.61 16.27
-------- -------- ---------
2Offering price $ 41.97 $ 21.81 $ 17.22
======== ======== =========
CLASS B
4Net asset value and offering price $ 39.12 $ 18.31 $ 16.19
======== ======== =========
-------------- -------------- --------------
SPECIAL INTERNATIONAL BALANCED
EQUITY FUND GROWTH FUND FUND
-------------- -------------- --------------
INVESTMENT INCOME:
<S> <C> <C> <C>
Dividends $ 212 $ 1,039 $ 379
Interest 43 152 1,481
Less: Foreign taxes withheld -- (111) --
-------- ------- ------
Total investment income 255 1,080 1,860
-------- ------- ------
EXPENSES:
Investment advisory fees 607 666 444
Less: waiver of investment advisory fees (263) -- (76)
Administrative fees 101 208 158
Less: waiver of administrative fees (36) (75) (57)
Transfer agent fees & expenses 21 (10) 11
Custodian fees 5 6 --
Professional fees (5) 2 3
Registration & filing fees 9 (7) --
12b-1 fees--individual shares 4 3 7
Taxes--other than income 1 -- 1
Printing fees 11 2 16
Organizational costs -- -- 18
Miscellaneous 1 -- --
-------- ------- ------
Total expenses 456 795 525
-------- ------- ------
NET INVESTMENT INCOME (LOSS) (201) 285 1,335
-------- ------- ------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS, FORWARD FOREIGN CURRENCY
CONTRACTS AND FOREIGN CURRENCY:
Net realized gain from security transactions 7,997 2,385 3,960
Net realized (loss) on forward foreign currency contracts and
foreign currency transactions -- (411) --
Net unrealized depreciation on forward foreign currency contracts and
translation of assets and liabilities in foreign currencies -- (12) --
Net change in unrealized appreciation (depreciation) on investments (1,796) (10,180) 3,388
-------- ------- ------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS $ 6,000 (7,933) $8,683
======== ======= ======
COMPUTATION OF NET ASSET VALUE AND OFFERING PRICE - DECEMBER 31, 1997:
CLASS Y
1Net asset value, offer and redemption price $ 10.65 $ 13.28 $13.60
======== ======= ======
CLASS A
1Net asset value, redemption price
Maximum sales charge of 5.50% 10.60 13.28 13.60
-------- ------- ------
2Offering price $ 11.22 $ 14.05 $14.39
======== ======= ======
CLASS B
4Net asset value and offering price $ 10.48 $ 13.28 $13.51
======== ======= ======
<FN>
AMOUNTS DESIGNATED AS "--" ARE EITHER $0 OR HAVE BEEN ROUNDED TO $0
1 NET ASSET VALUE PER SHARE, AS ILLUSTRATED, IS THE AMOUNT WHICH WOULD BE PAID
UPON THE REDEMPTION OR EXCHANGE OF SHARES.
2 THE OFFER PRICE IS CALCULATED BY DIVIDING THE NET ASSET VALUE OF CLASS A BY 1
MINUS THE MAXIMUM SALES CHARGE OF 5.50%.
3 THIS FUND WAS FORMERLY KNOWN AS THE EQUITY FUND.
4 CLASS B HAS A CONTINGENT DEFERRED SALES CHARGE. FOR A DESCRIPTION OF POSSIBLE
REDEMPTION CHARGE, SEE THE NOTES TO THE FINANCIAL STATEMENTS.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
</FN>
</TABLE>
92 & 93
<PAGE>
STATEMENT
OF
OPERATIONS [SQUARE BULLET] COREFUND
- --------------------------------------------------------------------------------
(000)
COREFUND FIXED INCOME FUNDS
AS OF
DECEMBER 31, 1997
(UNAUDITED)
<TABLE>
<CAPTION>
-------------- -------------- -------------
SHORT TERM SHORT-
INCOME INTERMEDIATE GOVERNMENT
FUND BOND FUND INCOME FUND
-------------- -------------- -------------
INVESTMENT INCOME
<S> <C> <C> <C>
Interest $1,120 $5,458 $ 758
------ ------ ------
Total Investment income 1,120 5,458 758
------ ------ ------
EXPENSES
Investment advisory fees 139 426 55
Less: waiver of investment advisory fees (92) (170) (2)
Administrative fees 47 213 28
Less:waiver of administrative fees (17) (77) (10)
Transfer agent fees & expenses 6 18 2
Custodian fees 6 -- --
Professional fees -- 4 1
Registration & filing fees (3) 6 1
12b-1 fees--individual shares 1 3 2
Trustee fees 1 2 --
Printing fees 2 11 1
Organizational costs 1 -- 3
Miscellaneous 1 6 1
------ ------ ------
Total expenses 92 442 82
------ ------ ------
NET INVESTMENT INCOME 1,028 5,016 676
------ ------ ------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS, FORWARD FOREIGN CURRENCY
CONTRACTS AND FOREIGN CURRENCY:
Net realized gain (loss) from:
Security transactions 8 461 88
Option transactions -- -- --
Net realized gain on forward foreign currency contracts and
foreign currency transactions -- -- --
Net unrealized depreciation on forward foreign currency
contracts and translation of other assets and liabilities
in foreign currencies -- -- --
Net change in unrealized appreciation (depreciation)
on investments 68 1,670 515
------ ------ ------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $1,104 $7,147 $1,279
====== ====== ======
COMPUTATION OF NET ASSET VALUE AND OFFERING PRICE - JUNE 30, 1997:
CLASS Y
1Net asset value, offer and redemption price $ 9.99 $ 9.95 $10.03
====== ====== ======
CLASS A
1Net asset value, redemption price
Maximum sales charge of 3.25% or 4.75% 9.98 9.95 10.03
------ ------ ------
2Offering price $10.32 $10.28 $10.37
====== ====== ======
------------ -------------- ------------
GLOBAL INTERMEDIATE
BOND BOND MUNICIPAL
FUND FUND BOND FUND
------------ -------------- ------------
INVESTMENT INCOME
<S> <C> <C> <C>
Interest $ 6,153 $1,055 $ 46
------- ------- -------
Total Investment income 6,153 1,055 46
------- ------- -------
EXPENSES
Investment advisory fees 675 108 5
Less: waiver of investment advisory fees (356) (18) (5)
Administrative fees 228 45 2
Less:waiver of administrative fees (82) (16) (1)
Transfer agent fees & expenses 7 (1) --
Custodian fees 11 1 --
Professional fees 8 1 --
Registration & filing fees 18 1 2
12b-1 fees-- individual shares 2 -- 1
Trustee fees -- -- --
Printing fees 10 -- --
Organizational costs -- 2 3
Miscellaneous 5 -- --
------- ------- -------
Total expenses 526 123 7
------- ------- -------
NET INVESTMENT INCOME 5,627 932 39
------- ------- -------
NETREALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS, FORWARD FOREIGN CURRENCY
CONTRACTS AND FOREIGN CURRENCY:
Net realized gain (loss) from:
Security transactions 1,499 (41) 3
Option transactions -- (400) --
Net realized gain on forward foreign currency contracts and
foreign currency transactions -- 450 --
Net unrealized depreciation on forward foreign currency
contracts and translation of other assets and liabilities
in foreign currencies -- (98) --
Net change in unrealized appreciation (depreciation)
on investments 3,530 (90) 35
------- ------- -------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $10,656 $ 753 $ 77
======= ======= =======
COMPUTATION OF NET ASSET VALUE AND OFFERING PRICE - JUNE 30, 1997:
CLASS Y
1Net asset value, offer and redemption price $ 10.53 $ 9.33 $10.25
======= ======= =======
CLASS A
1Net asset value, redemption price
Maximum sales charge of 3.25% or 4.75% 10.53 9.32 10.25
------- ------- -------
2Offering price $ 11.06 $ 9.78 $10.59
======= ======= =======
-------------- --------------
PENNSYLVANIA NEW JERSEY
MUNICIPAL MUNICIPAL
BOND FUND BOND FUND
-------------- --------------
INVESTMENT INCOME
<S> <C> <C>
Interest $ 375 $ 53
------- -------
Total Investment income 375 53
------- -------
EXPENSES
Investment advisory fees 37 5
Less: waiver of investment advisory fees (37) (5)
Administrative fees 19 2
Less:waiver of administrative fees (19) (2)
Transfer agent fees & expenses 1 --
Custodian fees -- --
Professional fees -- --
Registration & filing fees 1 --
12b-1 fees--individual shares 4 1
Trustee fees -- --
Printing fees 1 --
Organizational costs 2 1
Miscellaneous -- --
------- -------
Total expenses 9 2
------- -------
NET INVESTMENT INCOME 366 51
------- -------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS, FORWARD FOREIGN CURRENCY
CONTRACTS AND FOREIGN CURRENCY:
Net realized gain (loss) from:
Security transactions 40 (1)
Option transactions -- --
Net realized gain on forward foreign currency contracts and
foreign currency transactions -- --
Net unrealized depreciation on forward foreign currency
contracts and translation of other assets and liabilities
in foreign currencies -- --
Net change in unrealized appreciation (depreciation)
on investments 378 57
------- -------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 784 $ 107
======= =======
COMPUTATION OF NET ASSET VALUE AND OFFERING PRICE - JUNE 30, 1997:
CLASS Y
1Net asset value, offer and redemption price $10.77 $10.46
======= =======
CLASS A
1Net asset value, redemption price
Maximum sales charge of 3.25% or 4.75% 10.78 10.45
------- -------
2Offering price $11.32 $10.97
======= =======
<FN>
AMOUNTS DESIGNATED AS "--" ARE EITHER $0 OR HAVE BEEN ROUNDED TO $0.
1 NET ASSET VALUE PER SHARE, AS ILLUSTRATED, IS THE AMOUNT WHICH WOULD BE PAID
UPON THE REDEMPTION OR EXCHANGE OF SHARES.
2 THE OFFER PRICE IS CALCULATED BY DIVIDING THE NET ASSET VALUE OF CLASS A BY 1
MINUS THE MAXIMUM SALES CHARGE OF 3.25% FOR THE SHORT TERM INCOME, SHORT-
INTERMEDIATE BOND, GOVERNMENT INCOME AND INTERMEDIATE MUNICIPAL BOND FUNDS AND
4.75% FOR THE BOND, GLOBAL BOND, PENNSYLVANIA MUNICIPAL BOND AND NEW JERSEY
MUNICIPAL BOND FUNDS.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
</FN>
</TABLE>
94 & 95
<PAGE>
STATEMENT
OF
OPERATIONS [SQUARE BULLET] COREFUND
- --------------------------------------------------------------------------------
(000)
COREFUND MONEY MARKET FUNDS
AS OF
DECEMBER 31, 1997
(UNAUDITED)
<TABLE>
<CAPTION>
-------- ------- --------
TREASURY CASH TAX-FREE
RESERVE RESERVE RESERVE
-------- ------- --------
INVESTMENT INCOME:
<S> <C> <C> <C>
Interest $ 24,754 $ 27,544 $ 2,735
-------- -------- -------
Total investment income 24,754 27,544 2,735
-------- -------- -------
EXPENSES:
Investment advisory fees 1,113 1,926 185
Less: waiver of investment advisory fees (401) (481) (67)
Administrative fees 1,781 1,204 296
Less: waiver of administrative fees (446) (433) (74)
Transfer agent fees & expenses 71 117 14
Custodian fees 1 1 --
Professional fees 25 10 3
Registration & filing fees 4 60 20
12b-1 fees 23 64 12
Trustee fees 10 11 5
Printing 65 77 5
Miscellaneous 63 32 (1)
-------- -------- -------
Total expenses 2,309 2,588 398
-------- -------- -------
NET INVESTMENT INCOME 22,445 24,956 2,337
-------- -------- -------
NET REALIZED GAIN ON INVESTMENTS:
Net realized gain from security
transactions 14 5 --
-------- -------- -------
NET INCREASE IN NET ASSETS RESULTING
FROM OPERATIONS $ 22,459 $ 24,961 $ 2,337
======== ======== =======
<FN>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
</FN>
</TABLE>
96
<PAGE>
[This page intentionally left blank.]
<PAGE>
STATEMENT
OF CHANGES
IN NET ASSETS [SQUARE BULLET] COREFUND
- --------------------------------------------------------------------------------
(000)
COREFUND EQUITY FUNDS
AS OF
DECEMBER 31, 1997
(UNAUDITED)
<TABLE>
<CAPTION>
------------------- -------------------
EQUITY CORE EQUITY
INDEX FUND FUND(2)
------------------- -------------------
7/1/97 7/1/96 7/1/97 7/1/96
TO TO TO TO
12/31/97 6/30/97 12/31/97 6/30/97
-------- ------- -------- -------
OPERATIONS:
<S> <C> <C> <C> <C>
Net investment income $ 1,739 $ 3,256 $ 579 $ 2,927
Net realized gain on investments, forward foreign currency contracts and foreign
currency 5,184 3,591 40,986 66,598
Net unrealized appreciation on investments, forward foreign currency contracts
and translation of assets and liabilites in foreign currencies 17,916 55,389 20,773 67,597
-------- -------- -------- --------
Net increase (decrease) in net assets resulting from operations 24,839 62,236 62,338 137,122
-------- -------- -------- --------
DIVIDENDS DISTRIBUTED FROM:
Net investment income:
Class Y (1,685) (3,225) (595) (2,858)
Class A (48) (28) -- (49)
Class B (2) -- -- --
Net realized gains:
Class Y (8,013) (1,484) (69,731) (35,253)
Class A (265) (6) (2,421) (977)
Class B (16) -- (17) --
-------- -------- -------- --------
Total dividends distributed (10,029) (4,743) (72,764) (39,137)
-------- -------- -------- --------
CAPITAL TRANSACTIONS (1):
Class Y:
Proceeds from shares issued 24,068 -- 48,159 56,759
Reinvestment of cash distributions 8,774 -- 63,917 38,110
Cost of shares redeemed (25,937) -- (59,580) (89,855)
-------- -------- -------- --------
Increase in net assets from Class Y transactions 6,905 -- 52,496 5,014
-------- -------- -------- --------
Class A:
Proceeds from shares issued 4,631 43,492 2,811 3,395
Reinvestment of cash distributions 330 4,960 2,403 1,038
Cost of shares redeemed (655) (30,407) (1,722) (2,376)
-------- -------- -------- --------
Increase in net assets from Class A transactions 4,306 18,045 3,492 2,057
-------- -------- -------- --------
Class B:
Proceeds from shares issued 732 4,101 132 --
Reinvestment of cash distributions 18 34 17 --
Cost of shares redeemed (5) (103) -- --
-------- -------- -------- --------
Increase (decrease) in net assets from Class B transactions 745 4,032 149 --
-------- -------- -------- --------
Increase in net assets derived from capital share transactions 11,956 22,077 56,137 7,071
-------- -------- -------- --------
Net increase (decrease) in net assets 26,766 79,570 45,711 105,056
-------- -------- -------- --------
NET ASSETS:
Beginning of period 245,920 166,350 531,058 426,002
-------- -------- -------- --------
End of period $272,686 $245,920 $576,769 $531,058
======== ======== ======== ========
------------------- ------------------
GROWTH SPECIAL
EQUITY FUND EQUITY FUND
------------------- ------------------
7/1/97 7/1/96 7/1/97 7/1/96
TO TO TO TO
12/31/97 6/30/97 12/31/97 6/30/97
-------- ------- -------- -------
OPERATIONS:
<S> <C> <C> <C> <C>
Net investment income $ (135) $ 399 $ (201) $ 121
Net realized gain on investments, forward foreign currency contracts and foreign
currency 11,173 14,635 7,997 7,793
Net unrealized appreciation on investments, forward foreign currency contracts
and translation of assets and liabilites in foreign currencies 10,360 12,411 (1,796) 3,603
-------- -------- ------- -------
Net increase (decrease) in net assets resulting from operations 21,398 27,445 6,000 11,517
-------- -------- ------- -------
DIVIDENDS DISTRIBUTED FROM:
Net investment income:
Class Y -- (393) -- (177)
Class A -- (3) -- (2)
Class B -- -- -- --
Net realized gains:
Class Y (11,719) (13,864) (350) (13,011)
Class A (400) (404) (9,099) (307)
Class B (7) -- (15) --
-------- -------- ------- -------
Total dividends distributed (12,126) (14,664) (9,464) (13,497)
-------- -------- ------- -------
CAPITAL TRANSACTIONS (1):
Class Y:
Proceeds from shares issued 18,945 -- 7,178 --
Reinvestment of cash distributions 10,162 -- 8,424 --
Cost of shares redeemed (23,121) -- (10,285) --
-------- -------- ------- -------
(Decrease) in net assets from Class Y transactions 5,986 -- 5,317 --
-------- -------- ------- -------
Class A:
Proceeds from shares issued 728 38,807 516 13,884
Reinvestment of cash distributions 400 12,752 349 13,074
Cost of shares redeemed (390) (36,303) (179) (16,684)
-------- -------- ------- -------
Increase in net assets from Class A transactions 738 15,256 686 10,274
-------- -------- ------- -------
Class B:
Proceeds from shares issued 102 1,712 124 1,020
Reinvestment of cash distributions 7 410 15 310
Cost of shares redeemed -- (1,001) -- (121)
-------- -------- ------- -------
Increase (decrease) in net assets from Class B transactions 109 1,121 139 1,209
-------- -------- ------- -------
Increase in net assets derived from capital share transactions 6,833 16,377 6,142 11,483
-------- -------- ------- -------
Net increase (decrease) in net assets 16,105 29,158 2,678 9,503
-------- -------- ------- -------
NET ASSETS:
Beginning of period 152,393 123,235 74,327 64,824
-------- -------- ------- -------
End of period $168,498 $152,393 $77,005 $74,327
======== ======== ======= =======
------------------- -------------------
INTERNATIONAL BALANCED
GROWTH FUND FUND
------------------- -------------------
7/1/97 7/1/96 7/1/97 7/1/96
TO TO TO TO
12/31/97 6/30/97 12/31/97 6/30/97
-------- ------- -------- -------
OPERATIONS:
<S> <C> <C> <C> <C>
Net investment income $ 285 $ 969 $ 1,335 $ 3,139
Net realized gain on investments, forward foreign currency contracts and foreign
currency 1,974 5,290 3,960 7,717
Net unrealized appreciation on investments, forward foreign currency contracts
and translation of assets and liabilites in foreign currencies (10,192) 15,689 3,388 6,601
-------- -------- -------- --------
Net increase (decrease) in net assets resulting from operations (7,933) 21,948 8,683 17,457
-------- -------- -------- --------
DIVIDENDS DISTRIBUTED FROM:
Net investment income:
Class Y (1,958) (3,802) (1,280) (3,056)
Class A (22) (53) (48) (92)
Class B -- -- (2) --
Net realized gains:
Class Y (6,263) (8,375) (6,356) (5,885)
Class A (93) (130) (282) (184)
Class B (1) -- (28) --
-------- -------- -------- --------
Total dividends distributed (8,337) (12,360) (7,996) (9,217)
-------- -------- -------- --------
CAPITAL TRANSACTIONS (1):
Class Y:
Proceeds from shares issued 43,065 34,899 11,645 --
Reinvestment of cash distributions 7,249 11,015 6,080 --
Cost of shares redeemed (38,992) (31,528) (10,793) --
-------- -------- -------- --------
(Decrease) in net assets from Class Y transactions 11,322 14,386 6,932 --
-------- -------- -------- --------
Class A:
Proceeds from shares issued 358 489 1,546 23,565
Reinvestment of cash distributions 11 178 323 8,737
Cost of shares redeemed (238) (506) (519) (29,150)
-------- -------- -------- --------
Increase in net assets from Class A transactions 131 161 1,350 3,152
-------- -------- -------- --------
Class B:
Proceeds from shares issued 14 -- 568 1,285
Reinvestment of cash distributions 1 -- 30 293
Cost of shares redeemed -- -- -- (833)
-------- -------- -------- --------
Increase (decrease) in net assets from Class B transactions 15 -- 598 745
-------- -------- -------- --------
Increase in net assets derived from capital share transactions 11,468 14,547 8,880 3,897
-------- -------- -------- --------
Net increase (decrease) in net assets (4,802) 24,135 9,567 12,137
-------- -------- -------- --------
NET ASSETS:
Beginning of period 165,548 141,413 117,840 105,703
-------- -------- -------- --------
End of period $160,746 $165,548 $127,407 $117,840
======== ======== ======== ========
<FN>
AMOUNTS DESIGNATED AS "--" ARE EITHER $0 OR HAVE BEEN ROUNDED TO $0.
(1) FOR CAPITAL SHARE TRANSACTIONS PLEASE SEE FOOTNOTE 8 IN THE NOTES TO THE FINANCIAL STATEMENTS.
(2) THIS FUND WAS FORMERLY KNOWN AS THE EQUITY FUND.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
</FN>
</TABLE>
98 & 99
<PAGE>
STATEMENT
OF CHANGES
IN NET ASSETS [SQUARE BULLET] COREFUND
- --------------------------------------------------------------------------------
(000)
COREFUND FIXED INCOME FUNDS
AS OF
DECEMBER 31, 1997
(UNAUDITED)
<TABLE>
<CAPTION>
---------------- ----------------- ----------------
SHORT-
SHORT TERM INTERMEDIATE GOVERNMENT
INCOME FUND BOND FUND INCOME FUND
---------------- ----------------- ----------------
7/1/97 7/1/96 7/1/97 7/1/96 7/1/97 7/1/96
TO TO TO TO TO TO
12/31/97 6/30/97 12/31/97 6/30/97 12/31/97 6/30/97
-------- ------- -------- ------- -------- -------
OPERATIONS:
<S> <C> <C> <C> <C> <C> <C>
Net investment income $ 1,028 $ 1,757 $ 5,016 $ 10,074 $ 676 $ 1,293
Net realized gain (loss) on investments, forward foreign
currency contracts and foreign currency 8 (8) 461 (26) 88 (156)
Net unrealized appreciation (depreciation) on investments,
forward foreign currency contracts and translation of
assets and liabilites in foreign currencies 68 91 1,670 993 505 434
------- ------- -------- -------- ------- -------
Net increase in net assets resulting from operations 1,104 1,840 7,147 11,041 1,269 1,571
------- ------- -------- -------- ------- -------
DIVIDENDS DISTRIBUTED FROM:
Net investment income:
Class Y (1,015) (1,748) (4,933) (9,902) (624) (1,204)
Class A (13) (9) (77) (172) (51) (90)
Net realized gains:
Class Y -- -- -- -- -- --
Class A -- -- -- -- -- --
------- ------- -------- -------- ------- -------
Total dividends distributed (1,028) (1,757) (5,010) (10,074) (675) (1,294)
------- ------- -------- -------- ------- -------
CAPITAL TRANSACTIONS (1):
Class Y:
Proceeds from shares issued 6,147 16,475 20,016 45,113 3,060 8,152
Reinvestment of cash distributions 880 1,808 4,505 9,516 352 612
Cost of shares redeemed (6,908)(11,486) (19,785) (52,263) (1,936) (3,957)
------- ------- -------- -------- ------- -------
Increase (decrease) in net assets from Class Y
transactions 119 6,797 4,736 2,366 1,476 4,807
------- ------- -------- -------- ------- -------
Class A:
Proceeds from shares issued 63 483 289 391 308 579
Reinvestment of cash distributions 13 9 59 143 43 85
Cost of shares redeemed -- (1) (305) (865) (229) (311)
------- ------- -------- -------- ------- -------
Increase (decrease) in net assets from Class A
transactions 76 491 43 (331) 122 353
------- ------- -------- -------- ------- -------
Increase (decrease) in net assets derived from capital
share transactions 195 7,288 4,779 2,035 1,598 5,160
------- ------- -------- -------- ------- -------
Net increase (decrease) in net assets 271 7,371 6,916 3,002 2,192 5,437
------- ------- -------- -------- ------- -------
NET ASSETS:
Beginning of period 37,504 30,133 165,905 162,903 20,667 15,230
------- ------- -------- -------- ------- -------
End of period $37,775 $37,504 $172,821 $165,905 $22,859 $20,667
======= ======= ======== ======== ======= =======
----------------- ----------------- ------------------
INTERMEDIATE
BOND GLOBAL MUNICIPAL
FUND BOND FUND BOND FUND
----------------- ----------------- ------------------
7/1/97 7/1/96 7/1/97 7/1/96 7/1/97 7/1/96
TO TO TO TO TO TO
12/31/97 6/30/97 12/31/97 6/30/97 12/31/97 6/30/97
-------- ------- -------- ------- -------- -------
OPERATIONS:
<S> <C> <C> <C> <C> <C> <C>
Net investment income $ 5,627 $ 12,245 $ 931 $ 1,774 $ 39 $ 71
Net realized gain (loss) on investments, forward foreign
currency contracts and foreign currency 1,499 (735) 9 423 3 (6)
Net unrealized appreciation (depreciation) on investments,
forward foreign currency contracts and translation of
assets and liabilites in foreign currencies 3,530 2,749 (188) (149) 35 25
-------- -------- ------- ------- ------- -------
Net increase in net assets resulting from operations 10,656 14,259 753 2,048 77 90
-------- -------- ------- ------- ------- -------
DIVIDENDS DISTRIBUTED FROM:
Net investment income:
Class Y (5,574) (12,161) (1,509) (2,621) (20) (34)
Class A (53) (84) (10) (13) (19) (37)
Net realized gains:
Class Y -- -- -- -- -- --
Class A -- -- -- -- -- --
-------- -------- ------- ------- ------- -------
Total dividends distributed (5,627) (12,245) (1,519) (2,634) (39) (71)
-------- -------- ------- ------- ------- -------
CAPITAL TRANSACTIONS (1):
Class Y:
Proceeds from shares issued 11,940 18,942 911 107 34 841
Reinvestment of cash distributions 5,007 12,215 1,285 2,670 7 12
Cost of shares redeemed (30,726) (49,397) (400) (602) (147) (269)
-------- -------- ------- ------- ------- -------
Increase (decrease) in net assets from Class Y transactions (13,779) (18,240) 1,796 2,175 (106) 584
-------- -------- ------- ------- ------- -------
Class A:
Proceeds from shares issued 427 579 69 31 66 80
Reinvestment of cash distributions 46 78 10 15 17 37
Cost of shares redeemed (117) (323) (10) (13) (95) (186)
-------- -------- ------- ------- ------- -------
Increase (decrease) in net assets from Class A transactions 356 334 69 33 (12) (69)
-------- -------- ------- ------- ------- -------
Increase (decrease) in net assets derived from capital
share transactions (13,423) (17,906) 1,865 2,208 (118) 515
-------- -------- ------- ------- ------- -------
Net increase (decrease) in net assets (8,394) (15,892) 1,099 1,622 (80) 534
-------- -------- ------- ------- ------- -------
NET ASSETS:
Beginning of period 183,986 199,878 34,772 33,150 1,952 1,418
-------- -------- ------- ------- ------- -------
End of period $175,592 $183,986 $35,871 $34,772 $ 1,872 $ 1,952
======== ======== ======= ======= ======= =======
------------------ -----------------
PENNSYLVANIA NEW JERSEY
MUNICIPAL MUNICIPAL
BOND FUND BOND FUND
------------------ -----------------
7/1/97 7/1/96 7/1/97 7/1/96
TO TO TO TO
12/31/97 6/30/97 12/31/97 6/30/97
-------- ------- -------- -------
OPERATIONS:
<S> <C> <C> <C> <C>
Net investment income $ 366 $ 583 $ 51 $ 81
Net realized gain (loss) on investments, forward foreign
currency contracts and foreign currency 40 20 (1) (3)
Net unrealized appreciation (depreciation) on investments,
forward foreign currency contracts and translation of
assets and liabilites in foreign currencies 378 240 57 24
------- ------- ------- -------
Net increase in net assets resulting from operations 784 843 107 102
------- ------- ------- -------
DIVIDENDS DISTRIBUTED FROM:
Net investment income:
Class Y (290) (521) (40) (65)
Class A (76) (62) (11) (16)
Net realized gains:
Class Y -- -- -- (8)
Class A -- -- -- (2)
------- ------- ------- -------
Total dividends distributed (366) (583) (51) (91)
------- ------- ------- -------
CAPITAL TRANSACTIONS (1):
Class Y:
Proceeds from shares issued 2,871 3,530 172 525
Reinvestment of cash distributions 126 297 14 14
Cost of shares redeemed (586) (2,772) (102) (388)
------- ------- ------- -------
Increase (decrease) in net assets from Class Y transactions 2,411 1,055 84 151
------- ------- ------- -------
Class A:
Proceeds from shares issued 2,567 1,341 168 99
Reinvestment of cash distributions 64 56 9 15
Cost of shares redeemed (133) (420) (72) (22)
------- ------- ------- -------
Increase (decrease) in net assets from Class A transactions 2,498 977 105 92
------- ------- ------- -------
Increase (decrease) in net assets derived from capital
share transactions 4,909 2,032 189 243
------- ------- ------- -------
Net increase (decrease) in net assets 5,327 2,292 245 254
------- ------- ------- -------
NET ASSETS:
Beginning of period 12,175 9,883 1,875 1,621
------- ------- ------- -------
End of period $17,502 $12,175 $ 2,120 $ 1,875
======= ======= ======= =======
<FN>
AMOUNTS DESIGNATED AS "--" ARE EITHER $0 OR HAVE BEEN ROUNDED TO $0.
(1) FOR CAPITAL SHARE TRANSACTIONS PLEASE SEE FOOTNOTE 8 IN THE NOTES TO THE
FINANCIAL STATEMENTS.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
</FN>
</TABLE>
100 & 101
<PAGE>
STATEMENT
OF CHANGES
IN NET ASSETS [SQUARE BULLET] COREFUND
- --------------------------------------------------------------------------------
(000)
COREFUND MONEY MARKET FUNDS
AS OF
DECEMBER 31, 1997
(UNAUDITED)
<TABLE>
<CAPTION>
------------------- ------------------- ------------------
TREASURY CASH TAX-FREE
RESERVE RESERVE RESERVE
------------------- ------------------- ------------------
7/1/97 7/1/96 7/1/97 7/1/96 7/1/97 7/1/96
TO TO TO TO TO TO
12/31/97 6/30/97 12/31/97 6/30/97 12/31/97 6/30/97
-------- ------- -------- ------- -------- -------
OPERATIONS:
<S> <C> <C> <C> <C> <C> <C>
Net investment income $ 22,445 $ 43,860 $ 24,956 $ 44,127 $ 2,337 $ 3,787
Net realized gain (loss) on securities transactions 14 8 5 1 -- (1)
---------- ---------- ---------- ---------- -------- ---------
Net increase in net assets resulting from operations 22,459 43,868 24,961 44,128 2,337 3,786
---------- ---------- ---------- ---------- -------- ---------
DIVIDENDS DISTRIBUTED FROM:
Net investment income:
Class Y (22,007) (43,173) (23,686) (43,042) (2,224) (3,677)
Class C (438) (687) (1,270) (1,085) (135) (86)
---------- ---------- ---------- ---------- -------- ---------
Total dividends distributed (22,445) (43,860) (24,956) (44,127) (2,359) (3,763)
---------- ---------- ---------- ---------- -------- ---------
CAPITAL SHARE TRANSACTIONS:
Class Y
Proceeds from shares issued 1,198,732 2,548,964 1,003,078 2,154,887 170,940 392,069
Reinvestment of cash distributions 1,462 4,246 1,865 3,136 96 229
Cost of shares redeemed (1,228,616) (2,610,396) (961,599) (2,061,985) (137,772) (376,938)
---------- ---------- ---------- ---------- -------- ---------
Increase (decrease) in net assets from Class Y
transactions (28,422) (57,186) 70,344 96,038 33,264 15,360
---------- ---------- ---------- ---------- -------- ---------
Class C
Proceeds from shares issued 34,333 12,429 107,066 44,890 24,342 3,779
Reinvestment of cash distributions 272 264 1,229 1,023 132 79
Cost of shares redeemed (22,458) (19,933) (56,508) (37,956) (15,279) (3,506)
---------- ---------- ---------- ---------- -------- ---------
Increase (decrease) in net assets from Class C
transactions 12,147 (7,240) 51,787 7,957 9,195 352
---------- ---------- ---------- ---------- -------- ---------
Class B
Proceeds from shares issued -- -- 88 -- -- --
Reinvestment of cash distributions -- -- -- -- -- --
Cost of shares redeemed -- -- (8) -- -- --
---------- ---------- ---------- ---------- -------- ---------
Increase in net assets from Class B
transactions -- -- 80 -- -- --
---------- ---------- ---------- ---------- -------- ---------
Increase (decrease) in net assets derived from
capital share transactions 16,275 (64,426) 122,211 103,995 42,459 15,712
---------- ---------- ---------- ---------- -------- ---------
Net (decrease) increase in net assets 16,261 (64,418) 122,216 103,996 42,437 15,735
---------- ---------- ---------- ---------- -------- ---------
NET ASSETS:
Beginning of period 847,530 911,948 913,944 809,948 122,781 107,046
---------- ---------- ---------- ---------- -------- ---------
End of period $ 831,269 $ 847,530 $1,036,160 $ 913,944 $165,218 $ 122,781
========== ========== ========== ========== ======== =========
<FN>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
</FN>
</TABLE>
102
<PAGE>
[This page intentionally left blank.]
<PAGE>
FINANCIAL
HIGHLIGHTS
- --------------------------------------------------------------------------------
COREFUND EQUITY FUNDS
AS OF
DECEMBER 31, 1997
(UNAUDITED)
For a Share Outstanding Throughout the Period
<TABLE>
<CAPTION>
NET
NET ASSET NET REALIZED AND DISTRIBUTIONS DISTRIBUTIONS NET ASSETS RATIO
VALUE INVESTMENT UNREALIZED FROM NET FROM ASSET VALUE END OF EXPENSES
BEGINNING INCOME GAINS OR (LOSSES) INVESTMENT CAPITAL END TOTAL OF PERIOD TO AVERAGE
OF PERIOD (LOSS) ON SECURITIES INCOME GAINS OF PERIOD RETURN8 (000) NET ASSETS
--------- ---------- ---------------- ------------- ------------- ----------- ------- --------- -----------
- -----------------
EQUITY INDEX FUND
- -----------------
CLASS Y**
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1997(A) $37.39 $ 0.26 $ 3.50 $(0.26) $(1.24) $39.65 10.12%+ $262,831 0.37%
1997 28.47 0.51 9.16 (0.51) (0.24) 37.39 34.44 241,413 0.37
1996 23.79 0.51 5.47 (0.51) (0.79) 28.47 25.69 166,350 0.35
1995 20.54 0.52 4.24 (0.52) (0.99) 23.79 24.45 112,533 0.37
1994 20.97 0.55 (0.43) (0.55) -- 20.54 0.55 72,552 0.35
1993 19.22 0.52 1.84 (0.52) (0.09) 20.97 12.39 50,551 0.49
1992 18.46 0.52 1.80 (0.48) (1.08) 19.22 12.59 20,166 0.57
19911 19.48 0.03 (0.94) (0.02) (0.09) 18.46 (4.64)+ 12,117 0.97
CLASS A
1997(A) $37.37 $ 0.26 $ 3.51 $(0.24) $(1.24) $39.66 2.74%+ $ 9,113 0.37%
1997(10) 29.62 0.32 8.05 (0.38) (0.24) 37.37 28.58+ 4,507 0.37
CLASS B
1997(A)(12) $39.16 $ 0.16 $ 1.27 $(0.23) $(1.24) $39.12 3.37%+ $ 742 1.37%
- -------------------
CORE EQUITY FUND(9)
- -------------------
CLASS Y*
1997(A) $21.11 $ -- $ 2.41 $ -- $(2.92) $20.60 11.87%+ $557,593 0.99%
1997 17.26 0.12 5.32 (0.12) (1.47) 21.11 33.10 515,015 0.98
1996 17.07 0.14 1.49 (0.14) (1.30) 17.26 19.24 414,824 0.97
INSTITUTIONAL CLASS*
1995 $15.00 $ 0.19 $ 2.87 $(0.19) $(0.80) $17.07 22.00% $378,352 1.05%
CLASS A*
1997(A) $21.13 $ -- $ 2.40 $ -- $(2.92) $20.61 11.70%+ $ 19,043 1.24%
1997 17.28 0.07 5.32 (0.07) (1.47) 21.13 32.74 16,043 1.23
1996 17.08 0.12 1.49 (0.11) (1.30) 17.28 19.11 11,178 1.22
RETAIL CLASS*
1995 $15.00 $ 0.18 $ 2.87 $(0.17) $(0.80) $17.08 21.94% $ 6,591 1.34%
PRIOR CLASS
1994 $15.39 $ 0.11 $ 0.22 $(0.11) $(0.61) $15.00 2.21% $ 50,128 1.49%
1993 13.93 0.14 1.89 (0.14) (0.43) 15.39 14.90 45,677 1.20
1992 13.08 0.19 1.02 (0.19) (0.17) 13.93 9.27 28,103 0.92
1991 8.95 0.26 4.13 (0.26) -- 13.08 49.37 12,830 0.54
1990(2) 10.00 0.14 (1.05) (0.14) -- 8.95 (9.22) 5,982 0.65
CLASS B
1997(A)(12) $23.05 $(4.44) $ 2.62 $ -- $(2.92) $18.31 (7.39)%+$ 133 1.99%
- ------------------
GROWTH EQUITY FUND
- ------------------
CLASS Y**
1997(A) $15.43 $ 0.01 $ 2.16 $ -- $(1.24) $16.33 14.11%+ $162,698 0.96%
1997 14.19 0.04 2.81 (0.04) (1.57) 15.43 21.67 147,700 0.96
1996 11.18 0.08 3.36 (0.08) (0.35) 14.19 31.36 120,073 0.89
1995 9.11 0.08 2.07 (0.08) -- 11.18 23.71 91,345 0.76
1994 9.95 0.05 (0.84) (0.05) -- 9.11 (8.01) 64,877 0.69
1993 8.74 0.08 1.21 (0.08) -- 9.95 14.76 63,777 0.43
19923 10.00 0.05 (1.26) (0.05) -- 8.74 (12.05)+ 33,418 0.14
CLASS A**
1997(A) $15.39 $(0.03) $ 2.15 $ -- $(1.24) $16.27 14.02%+ $ 5,699 1.21%
1997 14.17 0.01 2.79 (0.01) (1.57) 15.39 21.29 4,693 1.21
1996 11.17 0.05 3.35 (0.05) (0.35) 14.17 31.00 3,162 1.14
1995 9.10 0.06 2.07 (0.06) -- 11.17 23.44 2,043 1.01
1994 9.95 0.04 (0.85) (0.04) -- 9.10 (8.13) 1,730 0.94
19934 9.80 0.03 0.15 (0.03) -- 9.95 1.80+ 5,224 0.80
CLASS B
1997(A)(13) $17.32 $(0.02) $ 0.13 $ -- $(1.24) $16.19 0.85%+ $ 101 1.96%
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*** RATE11
---------- ----------- ------------ --------- ------
- -----------------
EQUITY INDEX FUND
- -----------------
CLASS Y*
<S> <C> <C> <C> <C> <C>
1997(A) 1.30% 0.71% 0.96% 9% $0.0621
1997 1.63 0.71 1.29 11 0.0639
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
1997(A) 1.05% 0.71% 0.71% 9% $0.0621
1997(10) 1.51 0.69 1.19 11 0.0639
CLASS B
1997(A)(12) 0.30% 1.71% (0.04)% 9% $0.0621
- -------------------
CORE EQUITY FUND(9)
- -------------------
CLASS Y*
1997(A) 0.21% 1.05% 0.15% 23% $0.0658
1997 0.63 1.03 0.58 79 0.0624
1996 1.15 1.01 1.11 114 0.0636
INSTITUTIONAL CLASS*
1995 1.44% 1.10% 1.44% 119% N/A
CLASS A*
1997(A) (0.04)% 1.30% (0.10)% 23% $0.0658
1997 0.38 1.28 0.33 79 0.0624
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
CLASS B
1997(A)(12) (0.79)% 2.30% (1.10)% 23% $0.0658
- ------------------
GROWTH EQUITY FUND
- ------------------
CLASS Y*
1997(A) (0.15)% 1.05% (0.24)% 41% $0.0602
1997 0.30 1.06 0.20 74 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
19923 1.38 1.12 0.40 66 N/A
CLASS A*
1997(A) (0.40)% 1.30% (0.49)% 41% $0.0602
1997 0.04 1.31 (0.06) 74 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
19934 0.39 1.48 (0.29) 103 N/A
CLASS B
1997(A)(12) (1.15)% 2.05% (1.24)% 41% $0.0602
<FN>
AMOUNTS DESIGNATED AS "--" ARE EITHER $0 OR HAVE BEEN ROUNDED TO $0.
* ON FEBRUARY 21, 1995, THE SHARES OF THE FUNDS WERE REDESIGNED AS EITHER RETAIL OR INSTITUTIONAL SHARES. ON THAT DATE,
THE FUND'S NET INVESTMENT INCOME, EXPENSES AND DISTRIBUTIONS FOR THE PERIOD NOVEMBER 1, 1994 THROUGH FEBRUARY 20, 1995
WERE ALLOCATED TO EACH CLASS OF SHARES. THE BASIS FOR THE ALLOCATION WAS THE RELATIVE NET ASSETS OF EACH CLASS OF
SHARES AS OF FEBRUARY 21, 1995. THE RESULTS WERE COMBINED WITH THE RESULTS OF OPERATIONS AND DISTRIBUTIONS FOR EACH
APPLICABLE CLASS FOR THE PERIOD FEBRUARY 21, 1995 THROUGH OCTOBER 31, 1995. FOR THE YEAR ENDED OCTOBER 31, 1995, THE
FINANCIAL HIGHLIGHTS' RATIOS OF EXPENSES, NET INVESTMENT INCOME, TOTAL RETURN, AND THE PER SHARE INVESTMENT ACTIVITIES
AND DISTRIBUTIONS REFLECT THIS ALLOCATION. ADDITIONALLY, ON APRIL 15 & 22, 1996 THE CONESTOGA EQUITY AND SPECIAL EQUITY
FUNDS WERE ACQUIRED BY COREFUNDS, INC.; AT WHICH TIME THE INSTITUTIONAL CLASS OF SHARES OF THESE FUNDS WERE EXCHANGED
FOR CLASS Y SHARES AND THE RETAIL CLASS OF SHARES OF THESE FUNDS WERE EXCHANGED FOR CLASS A SHARES.
** ON APRIL 22, 1996 THE SERIES A SHARES OF EACH FUND, EXCLUDING THE SPECIAL EQUITY FUND, WERE REDESIGNATED CLASS Y AND THE
SERIES B SHARES OF EACH FUND WERE REDESIGNATED CLASS A.
***FOR THE YEAR ENDED JUNE 30, 1996, TRANSACTIONS RELATING TO THE MERGER WERE EXCLUDED FROM THE CALCULATION OF THE
PORTFOLIO TURNOVER RATE.
+ THIS FIGURE HAS NOT BEEN ANNUALIZED.
(A)RATIOS FOR THIS SIX-MONTH PERIOD ENDED DECEMBER 31, 1997, 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.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
</FN>
</TABLE>
104
<PAGE>
[SQUARE BULLET] COREFUND
- --------------------------------------------------------------------------------
For a Share Outstanding Throughout the Period
<TABLE>
<CAPTION>
NET
NET ASSET NET REALIZED AND DISTRIBUTIONS DISTRIBUTIONS NET ASSETS RATIO
VALUE INVESTMENT UNREALIZED FROM NET FROM ASSET VALUE END OF EXPENSES
BEGINNING INCOME GAINS OR (LOSSES) INVESTMENT CAPITAL END TOTAL OF PERIOD TO AVERAGE
OF PERIOD (LOSS) ON SECURITIES INCOME GAINS OF PERIOD RETURN8 (000) NET ASSETS
--------- ---------- ---------------- ------------- ------------- ----------- ------- --------- -----------
- ----------------------
SPECIAL EQUITY FUND(9)
- ----------------------
CLASS Y*
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1997(A) $11.27 $(0.03) $ 0.90 $ -- $(1.49) $10.65 8.14%+ $74,025 1.07%
1997 11.86 0.02 1.81 (0.03) (2.39) 11.27 17.94 71,980 0.84
1996 11.42 0.07 2.13 (0.07) (1.69) 11.86 22.27 63,680 0.34
INSTITUTIONAL CLASS*
1995 $ 9.37 $ 0.12 $ 2.12 $(0.12) $(0.07) $11.42 24.44% $57,396 0.32%
CLASS A*
1997(A) $11.25 $(0.03) $ 0.87 $ -- $(1.49) $10.60 7.88%+ $ 2,858 1.32%
1997 11.85 -- 1.81 (0.02) (2.39) 11.25 17.73 2,347 1.14
1996 11.42 0.08 2.11 (0.07) (1.69) 11.85 22.14 1,144 0.37
RETAIL CLASS*
1995 $ 9.37 $ 0.12 $ 2.12 $(0.12) $(0.07) $11.42 24.44% $ 734 0.27%
PRIOR CLASS
19945 $10.00 $ 0.06 $(0.63) $(0.06) $ -- $ 9.37 (5.72)% $10,069 0.15%
CLASS B
1997(A)(12) $12.80 $(0.01) $(0.82) $ -- $(1.49) $10.48 (6.13)+% $ 122 2.07%
- --------------------------
INTERNATIONAL GROWTH FUND
- --------------------------
CLASS Y**
1997(A) $14.72 $0.01 $(0.73) $(0.17) $(0.55) $13.28 (4.89)%+ $158,408 0.95%
1997 13.97 0.14 1.84 (0.37) (0.86) 14.72 15.43 163,117 1.20
1996 12.29 0.16 1.86 (0.28) (0.06) 13.97 16.72 139,275 1.14
1995 13.18 0.12 (0.17) (0.04) (0.80) 12.29 (0.21) 110,838 1.05
1994 11.71 0.12 1.78 (0.12) (0.31) 13.18 16.28 108,911 0.99
1993 10.52 0.10 1.16 (0.07) -- 11.71 12.06 61,655 0.99
1992 10.10 0.17 0.31 -- (0.06) 10.52 4.90 42,594 0.96
1991 10.75 0.19 (0.44) (0.27) (0.13) 10.10 (2.71) 20,582 0.99
19906 10.00 0.11 0.86 (0.09) (0.13) 10.75 9.74+ 13,513 1.22
CLASS A**
1997(A) $14.70 $(0.01) $(0.73) $(0.13) $(0.55) $13.28 (4.98)%+ $ 2,324 1.20%
1997 13.96 0.09 1.85 (0.34) (0.86) 14.70 15.09 2,431 1.45
1996 12.27 0.11 1.89 (0.25) (0.06) 13.96 16.54 2,138 1.39
1995 13.17 0.09 (0.17) (0.02) (0.80) 12.27 (0.48) 1,943 1.30
1994 11.71 0.06 1.82 (0.11) (0.31) 13.17 16.08 2,019 1.24
19934 10.07 0.05 1.59 -- -- 11.71 16.29+ 344 1.15
CLASS B
1997(A)(15) $13.79 $(0.02) $ 0.22 $(0.16) $(0.55) $13.28 1.46%+ $ 14 2.16%
- --------------
BALANCED FUND
- --------------
CLASS Y**
1997(A) $13.52 $0.15 $ 0.83 $(0.15) $(0.75) $13.60 7.31%+ $121,302 0.82%
1997 12.59 0.36 1.61 (0.36) (0.68) 13.52 16.44 113,642 0.78
1996 11.06 0.33 1.68 (0.33) (0.15) 12.59 18.41 102,515 0.81
1995 9.88 0.35 1.21 (0.35) (0.03) 11.06 16.21 61,092 0.73
1994 10.39 0.35 (0.51) (0.35) -- 9.88 (1.62) 42,429 0.62
19934 10.00 0.16 0.39 (0.16) -- 10.39 5.52+ 29,434 0.45
CLASS A**
1997(A) $13.52 $0.12 $ 0.84 $(0.13) $(0.75) $13.60 7.19%+ $ 5,532 1.07%
1997 12.59 0.32 1.61 (0.32) (0.68) 13.52 16.15 4,198 1.03
1996 11.06 0.30 1.68 (0.30) (0.15) 12.59 18.13 3,188 1.06
1995 9.89 0.34 1.19 (0.33) (0.03) 11.06 15.84 2,344 0.98
1994 10.38 0.31 (0.49) (0.31) -- 9.89 (1.86) 2,222 0.87
19937 10.00 0.16 0.38 (0.16) -- 10.38 2.50+ 701 0.55
CLASS B
1997(A)(14) $14.39 $0.09 $(0.09) $ 0.13 $(0.75) $13.51 (0.45)%+ $ 573 1.82%
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*** RATE11
---------- ----------- ------------ --------- ------
- -----------
SPECIAL EQU
- -----------
CLASS Y*
<S> <C> <C> <C> <C> <C>
1997(A) (0.44)% 1.81% (1.18)% 32% $0.0628
1997 0.19 1.82 (0.79) 74 $0.0581
1996 0.94 1.79 (0.51) 72 0.0539
INSTITUTIONAL CLASS*
1995 1.14% 1.97% (0.51)% 129% N/A
CLASS A*
1997(A) (0.69)% 2.06% (1.43)% 32% $0.0628
1997 (0.12) 2.07 (1.05) 74 $0.0581
1996 0.91 1.82 (0.55) 72 0.0539
RETAIL CLASS*
1995 1.29% 2.24% (0.68)% 129% N/A
PRIOR CLASS
19945 1.06% 2.10% (0.89)% 39% N/A
CLASS B
1997(A)(12) (1.44)% 2.81% (2.18)% 32% $0.0628
- ------------------------------
INTERNATIONATIONAL GROWTH FUND
- ------------------------------
CLASS Y**
1997(A) 0.47% 1.04% 0.38% 25% $0.0024
1997 0.82 1.29 0.73 59 0.0080
1996 1.05 1.25 0.94 41 0.0270
1995 0.98 1.19 0.84 59 N/A
1994 0.23 1.18 0.04 67 N/A
1993 1.22 1.28 0.93 59 N/A
1992 1.67 1.40 1.23 87 N/A
1991 1.80 1.56 1.23 49 N/A
19906 2.57 1.99 1.80 20 N/A
CLASS A**
1997(A) 0.23% 1.29% 0.14% 25% $0.0024
1997 0.57 1.54 0.48 59 0.0080
1996 0.80 1.50 0.69 41 0.0270
1995 0.73 1.44 0.59 59 N/A
1994 0.05 1.43 (0.14) 67 N/A
19934 1.51 1.44 1.22 59 N/A
CLASS B
1997(A)(15) (1.15)% 2.23% (1.22%) 25% $0.0024
- -------------
BALANCED FUND
- -------------
CLASS Y**
1997(A) 2.12% 1.03% 1.91% 30% $0.0601
1997 2.79 1.00 2.57 54 0.0600
1996 2.79 1.03 2.57 74 0.0621
1995 3.51 1.07 3.17 46 N/A
1994 3.46 1.08 3.00 56 N/A
19934 3.38 1.39 2.45 21 N/A
CLASS A**
1997(A) 1.87% 1.28% 1.66% 30% $0.0601
1997 2.54 1.25 2.32 54 0.0600
1996 2.53 1.27 2.32 74 0.0621
1995 3.27 1.32 2.93 46 N/A
1994 3.21 1.33 2.75 56 N/A
19937 5.76 1.48 4.83 21 N/A
CLASS B
1997(A)(14) (1.12)% 2.03% 0.91% 30% $0.0601
<FN>
AMOUNTS DESIGNATED AS "--" ARE EITHER $0 OR HAVE BEEN ROUNDED TO $0.
5 COMMENCED OPERATIONS MARCH 15, 1994. UNLESS OTHERWISE NOTED, ALL RATIOS FOR
THE PERIOD HAVE BEEN ANNUALIZED.
6 COMMENCED OPERATIONS FEBRUARY 12, 1990. UNLESS OTHERWISE NOTED, ALL RATIOS FOR THE PERIOD HAVE BEEN ANNUALIZED.
7 COMMENCED OPERATIONS MARCH 16, 1993. UNLESS OTHERWISE NOTED, ALL RATIOS FOR THE PERIOD HAVE BEEN ANNUALIZED.
8 TOTAL RETURN DOES NOT REFLECT APPLICABLE SALES LOAD. ADDITIONALLY TOTAL RETURN FOR CLASS Y & CLASS A FOR THE CORE
EQUITY & SPECIAL EQUITY FUNDS FOR 1996 ARE FOR AN EIGHT MONTH PERIOD ENDED JUNE 30, 1997.
9 THE PER SHARE AMOUNT FOR THESE FUNDS FOR THE YEAR ENDED JUNE 30, 1996 REPRESENTS THE PERIOD FROM NOVEMBER 1, 1995 TO
JUNE 30, 1996. ALL PRIOR YEARS ARE FOR THE PERIODS NOVEMBER 1 TO OCTOBER 31.
10 COMMENCED OPERATIONS ON OCTOBER 9, 1996. UNLESS OTHERWISE NOTED, ALL RATIOS FOR THE PERIOD HAVE BEEN ANNUALIZED.
11 AVERAGE COMMISSION RATE PAID PER SHARE FOR SECURITY PURCHASES AND SALES DURING
THE PERIOD. PRESENTATION OF THE RATE IS ONLY REQUIRED FOR FISCAL YEARS BEGINNING AFTER SEPTEMBER 1, 1995.
12 COMMENCED OPERATIONS ON NOVEMBER 7, 1997. UNLESS OTHERWISE NOTED, ALL RATIOS FOR THE PERIOD HAVE BEEN ANNUALIZED.
13 COMMENCED OPERATIONS ON NOVEMBER 18, 1997. UNLESS OTHERWISE NOTED, ALL RATIOS FOR THE PERIOD HAVE BEEN ANNUALIZED.
14 COMMENCED OPERATIONS ON NOVEMBER 5, 1997. UNLESS OTHERWISE NOTED, ALL RATIOS FOR THE PERIOD HAVE BEEN ANNUALIZED.
15 COMMENCED OPERATIONS ON NOVEMBER 24, 1997. UNLESS OTHERWISE NOTED, ALL RATIOS FOR THE PERIOD HAVE BEEN ANNUALIZED.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
</FN>
</TABLE>
105
<PAGE>
FINANCIAL
HIGHLIGHTS
- --------------------------------------------------------------------------------
COREFUND FIXED INCOME FUNDS
AS OF
DECEMBER 31, 1997
(UNAUDITED)
For a Share Outstanding Throughout the Period
<TABLE>
<CAPTION>
NET NET
ASSET REALIZED AND DISTRIBUTIONS DISTRIBUTIONS NET ASSETS RATIO
VALUE NET UNREALIZED FROM NET FROM ASSET VALUE END OF EXPENSES
BEGINNING INVESTMENT GAINS OR (LOSSES) INVESTMENT CAPITAL END TOTAL OF PERIOD TO AVERAGE
OF PERIOD INCOME ON SECURITIES INCOME GAINS OF PERIOD RETURN10 (000) NET ASSETS
--------- ---------- ---------------- ------------- ------------- ----------- ------- --------- -----------
- -------------------------
SHORT TERM INCOME FUND11
- -------------------------
CLASS Y*
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1997(A) $ 9.97 $0.28 $ 0.02 $(0.28) $ -- $ 9.99 3.00%+ $ 37,203 0.49%
1997 9.94 0.53 0.03 (0.53) -- 9.97 5.82 37,011 0.47
1996 10.05 0.36 (0.08) (0.38) (0.01) 9.94 2.78 30,132 0.51
INSTITUTIONAL CLASS*
19951 $10.00 $0.25 $ 0.03 $(0.23) $ -- $10.05 2.57%+ $ 36,059 0.63%
CLASS A*
1997(A) $ 9.96 $0.26 $ 0.02 $(0.26) $ -- $ 9.98 2.87%+ $ 570 0.74%
1997 9.93 0.51 0.03 (0.51) -- 9.96 5.59 493 0.73
1996 10.04 0.35 (0.10) (0.35) (0.01) 9.93 2.55 1 0.76
RETAIL CLASS*
19952 $10.01 $0.23 $0.02 $(0.22) $ -- $10.04 2.87%+ $ 11 0.88%
- -----------------------------
SHORT-INTERMEDIATE BOND FUND
- -----------------------------
CLASS Y**
1997(A) $ 9.83 $0.29 $ 0.12 $(0.29) $ -- $ 9.95 4.25%+ $169,990 0.51%
1997 9.76 0.59 0.07 (0.59) -- 9.83 6.90 163,153 0.49
1996 9.84 0.57 (0.08) (0.57) -- 9.76 5.05 159,841 0.55
1995 9.63 0.53 0.21 (0.53) -- 9.84 8.22 55,128 0.60
1994 10.18 0.43 (0.53) (0.43) (0.02) 9.63 (0.32) 48,379 0.58
1993 10.01 0.47 0.31 (0.47) (0.14) 10.18 7.90 44,692 0.42
19923 10.00 0.23 0.01 (0.23) -- 10.01 2.49+ 22,623 0.11
CLASS A**
1997(A) $ 9.83 $0.28 $ 0.12 $(0.28) $ -- $ 9.95 4.14%+ $ 2,831 0.76%
1997 9.76 0.56 0.07 (0.56) -- 9.83 6.64 2,752 0.74
1996 9.84 0.54 (0.08) (0.54) -- 9.76 4.79 3,062 0.81
1995 9.63 0.54 0.20 (0.53) -- 9.84 7.95 1,961 0.85
1994 10.18 0.41 (0.53) (0.41) (0.02) 9.63 (0.56) 9,365 0.83
19934 10.01 0.20 0.17 (0.20) -- 10.18 3.95+ 5,752 0.75
- -----------------------
GOVERNMENT INCOME FUND
- -----------------------
CLASS Y**
1997(A) $ 9.76 $0.31 $ 0.27 $(0.31) $ -- $10.03 6.00%+ $ 21,032 0.73%
1997 9.62 0.62 0.14 (0.62) -- 9.76 8.15 19,007 0.70
1996 9.83 0.61 (0.21) (0.61) -- 9.62 4.09 13,943 0.64
1995 9.52 0.62 0.31 (0.62) -- 9.83 10.26 11,305 0.59
1994 10.18 0.50 (0.62) (0.50) (0.04) 9.52 (1.34) 9,089 0.50
19935 10.00 0.13 0.18 (0.13) -- 10.18 3.12+ 6,323 0.44
CLASS A**
1997(A) $ 9.76 $0.30 $ 0.27 $(0.30) $ -- $10.03 5.86%+ $ 1,827 0.98%
1997 9.62 0.60 0.14 (0.60) -- 9.76 7.88 1,660 0.95
1996 9.84 0.58 (0.22) (0.58) -- 9.62 3.73 1,287 0.88
1995 9.51 0.61 0.33 (0.61) -- 9.84 10.23 1,374 0.85
1994 10.17 0.47 (0.62) (0.47) (0.04) 9.51 (1.57) 1,536 0.75
19938 10.00 0.07 0.17 (0.07) -- 10.17 1.71+ 201 0.63
- ------------
BOND FUND11
- ------------
CLASS Y*
1997(A) $10.24 $0.32 $ 0.29 $(0.32) $ -- $10.53 6.06%+ $173,565 0.57%
1997 10.15 0.64 0.09 (0.64) -- 10.24 7.43 182,364 0.56
1996 10.55 0.43 (0.30) (0.45) (0.08) 10.15 1.23 198,605 0.55
INSTITUTIONAL CLASS*
1995 $ 9.81 $0.61 $ 0.71 $(0.58) $ -- $10.55 13.87% $194,442 0.71%
CLASS A*
1997(A) $10.24 $0.31 $ 0.29 $(0.31) $ -- $10.53 5.93%+ $ 2,027 0.82%
1997 10.15 0.62 0.09 (0.62) -- 10.24 7.15 1,622 0.81
1996 10.56 0.44 (0.33) (0.44) (0.08) 10.15 0.98 1,273 0.80
RETAIL CLASS*
1995 $ 9.81 $0.60 $ 0.72 $(0.57) $ -- $10.56 13.83% $ 1,373 0.97%
PRIOR CLASS
1994 $11.18 $0.53 $(1.04) $(0.52) $(0.34) $ 9.81 (4.75)% $ 23,377 1.01%
1993 10.89 0.56 0.54 (0.56) (0.25) 11.18 10.63 27,346 0.88
1992 10.65 0.70 0.32 (0.68) (0.10) 10.89 9.82 15,180 0.46
1991 9.96 0.78 0.69 (0.78) -- 10.65 15.16 7,255 0.47
19906 10.00 0.50 (0.04) (0.50) -- 9.96 4.64+ 4,593 0.68
RATIO RATIO OF NET
RATIO OF EXPENSES INCOME (LOSS)
OF NET TO AVERAGE TO AVERAGE
INCOME NET ASSETS NET ASSETS PORTFOLIO
TO AVERAGE (EXCLUDING (EXCLUDING TURNOVER
NET ASSETS WAIVERS) WAIVERS) RATE***
---------- ----------- ------------ ---------
- ------------------------
SHORT TERM INCOME FUND11
- ------------------------
CLASS Y*
<S> <C> <C> <C> <C>
1997(A) 5.48% 1.07% 4.90% 28%
1997 5.37 1.05 4.79 99
1996 5.31 1.03 4.79 102
INSTITUTIONAL CLASS*
19951 5.43% 1.08% 4.98% 40%
CLASS A*
1997(A) 5.23% 1.32% 4.65% 28%
1997 5.18 1.32 4.59 99
1996 5.05 1.25 4.56 102
RETAIL CLASS*
19952 5.05% 1.33% 4.60% 40%
- ----------------------------
SHORT-INTERMEDIATE BOND FUND
- ----------------------------
CLASS Y**
1997(A) 5.37% 0.80% 5.08% 66%
1997 5.98 0.80 5.67 158
1996 5.80 0.81 5.54 257
1995 5.76 0.84 5.52 405
1994 4.30 0.86 4.02 299
1993 4.62 0.86 4.18 188
19923 5.73 0.84 5.00 51
CLASS A**
1997(A) 4.88% 1.05% 4.59% 66%
1997 5.73 1.05 5.42 158
1996 5.51 1.06 5.27 257
1995 5.27 1.09 5.03 405
1994 4.05 1.11 3.77 299
19934 3.78 1.19 3.34 188
- ----------------------
GOVERNMENT INCOME FUND
- ----------------------
CLASS Y**
1997(A) 6.16% 0.83% 6.06% 18%
1997 6.40 0.85 6.25 120
1996 6.17 0.89 5.92 131
1995 6.53 0.98 6.14 368
1994 4.93 1.00 4.43 157
19935 5.41 1.10 4.75 93
CLASS A**
1997(A) 5.91% 1.08% 5.81% 18%
1997 6.15 1.10 6.00 120
1996 5.93 1.14 5.67 131
1995 6.25 1.24 5.86 368
1994 4.68 1.25 4.18 157
19938 5.35 1.29 4.69 93
- -----------
BOND FUND11
- -----------
CLASS Y*
1997(A) 6.11% 1.04% 5.64% 71%
1997 6.29 1.04 5.81 210
1996 6.28 0.97 5.86 190
INSTITUTIONAL CLASS*
1995 6.09% 1.12% 5.68% 352%
CLASS A*
1997(A) 5.86% 1.29% 5.39% 71%
1997 6.05 1.29 5.57 210
1996 6.02 1.22 5.61 190
RETAIL CLASS*
1995 6.02% 1.44% 5.55% 352%
PRIOR CLASS*
1994 5.07% 1.60% 4.48% 232%
1993 5.16 1.49 4.55 158
1992 6.78 1.24 6.01 99
1991 7.71 1.41 6.78 47
19906 7.75 1.62 6.81 23
<FN>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
</FN>
</TABLE>
106
<PAGE>
[SQUARE BULLET] COREFUND
- --------------------------------------------------------------------------------
For a Share Outstanding Throughout the Period
<TABLE>
<CAPTION>
NET
NET ASSET NET REALIZED AND DISTRIBUTIONS DISTRIBUTIONS NET ASSETS RATIO
VALUE NET UNREALIZED FROM NET FROM ASSET VALUE END OF EXPENSES
BEGINNING INVESTMENT GAINS OR (LOSSES) INVESTMENT CAPITAL END TOTAL OF PERIOD TO AVERAGE
OF PERIOD INCOME ON SECURITIES INCOME GAINS OF PERIOD RETURN10 (000) NET ASSETS
--------- ---------- ---------------- ------------- ------------- ----------- ------- --------- -----------
- ----------------
GLOBAL BOND FUND
- ----------------
CLASS Y**
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1997(A) $ 9.54 $0.37 $(0.17) $(0.41) $ -- $ 9.33 2.06%+ $ 35,625 0.68%
1997 9.70 0.49 0.09 (0.74) -- 9.54 6.18 34,590 0.85
1996 9.62 0.47 0.30 (0.69) -- 9.70 8.00 32,998 0.71
1995 9.06 0.62 0.24 (0.30) -- 9.62 9.70 26,898 0.64
19947 10.00 0.25 (1.15) (0.04) -- 9.06 (9.00)+ 24,957 0.73
CLASS A**
1997(A) $ 9.52 $0.29 $(0.10) $(0.39) $ -- $ 9.32 2.05%+ $ 246 0.93%
1997 9.68 0.42 0.14 (0.72) -- 9.52 5.92 182 1.10
1996 9.61 0.61 0.12 (0.66) -- 9.68 7.74 152 0.96
1995 9.04 0.61 0.24 (0.28) -- 9.61 9.57 170 0.89
19947 10.00 0.19 (1.11) (0.04) -- 9.04 (9.22)+ 167 0.98
- ---------------------------------
INTERMEDIATE MUNICIPAL BOND FUND
- ---------------------------------
CLASS Y**
1997(A) $10.05 $0.21 $ 0.20 $(0.21) $ -- $10.25 4.13%+ $ 906 0.56%
1997 9.92 0.42 0.13 (0.42) -- 10.05 5.62 993 0.55
1996 9.83 0.37 0.09 (0.37) -- 9.92 4.74 403 0.81
1995 9.68 0.38 0.15 (0.38) -- 9.83 5.58 365 0.82
1994 10.09 0.39 (0.41) (0.39) -- 9.68 (0.27) 1,088 0.63
19938 10.00 0.04 0.09 (0.04) -- 10.09 1.33+ 2,009 0.58
CLASS A**
1997(A) $10.05 $0.20 $ 0.20 $(0.20) $ -- $10.25 4.00%+ $ 966 0.81%
1997 9.92 0.39 0.13 (0.39) -- 10.05 5.36 959 0.80
1996 9.83 0.35 0.09 (0.35) -- 9.92 4.48 1,015 1.08
1995 9.67 0.35 0.16 (0.35) -- 9.83 5.42 1,027 1.08
1994 10.08 0.37 (0.41) (0.37) -- 9.67 (0.52) 1,311 0.88
19938 10.00 0.03 0.08 (0.03) -- 10.08 1.19+ 166 0.81
- ---------------------------------
PENNSYLVANIA MUNICIPAL BOND FUND
- ---------------------------------
CLASS Y**
1997(A) $10.47 $0.27 $ 0.30 $(0.27) $ -- $10.77 5.51%+ $ 12,912 0.08%
1997 10.22 0.54 0.25 (0.54) -- 10.47 7.92 10,171 0.08
1996 10.16 0.55 0.06 (0.55) -- 10.22 6.02 8,864 0.21
1995 9.95 0.51 0.21 (0.51) -- 10.16 7.50 2,272 0.39
19949 10.00 0.06 (0.05) (0.06) -- 9.95 0.14+ 434 0.42
CLASS A**
1997(A) $10.47 $0.26 $ 0.31 $(0.26) $ -- $10.78 5.47%+ $ 4,590 0.33%
1997 10.22 0.51 0.25 (0.51) -- 10.47 7.65 2,004 0.33
1996 10.16 0.52 0.06 (0.52) -- 10.22 5.76 994 0.46
1995 9.95 0.49 0.21 (0.49) -- 10.16 7.25 317 0.64
19949 10.00 0.06 (0.05) (0.06) -- 9.95 0.09+ 163 0.67
- -------------------------------
NEW JERSEY MUNICIPAL BOND FUND
- -------------------------------
CLASS Y**
1997(A) $10.16 $0.26 $ 0.30 $(0.26) $ -- $10.46 5.55%+ $ 1,605 0.11%
1997 10.08 0.51 0.15 (0.51) (0.07) 10.16 6.70 1,477 0.21
1996 10.12 0.51 0.02 (0.51) (0.06) 10.08 5.28 1,317 0.37
1995 9.94 0.52 0.18 (0.52) -- 10.12 7.25 1,550 0.42
19949 10.00 0.06 (0.06) (0.06) -- 9.94 0.01+ 1,432 0.43
CLASS A**
1997(A) $10.15 $0.25 $ 0.30 $(0.25) $ -- $10.45 5.42%+ $ 51 0.36%
1997 10.07 0.48 0.15 (0.48) (0.07) 10.15 6.44 398 0.45
1996 10.12 0.48 0.01 (0.48) (0.06) 10.07 4.93 304 0.60
1995 9.95 0.49 0.17 (0.49) -- 10.12 6.84 24 0.68
19949 10.00 0.06 (0.05) (0.06) -- 9.95 0.08+ 2 0.68
RATIO RATIO OF NET
RATIO OF EXPENSES INCOME
OF NET TO AVERAGE TO AVERAGE
INCOME NET ASSETS NET ASSETS PORTFOLIO
TO AVERAGE (EXCLUDING (EXCLUDING TURNOVER
NET ASSETS WAIVERS) WAIVERS) RATE***
---------- ----------- ------------ ---------
- -----------
GLOBAL BOND
- -----------
CLASS Y**
<S> <C> <C> <C> <C>
1997(A) 5.16% 0.87% 4.97% 7%
1997 5.14 1.03 4.96 90
1996 5.81 0.95 5.57 67
1995 6.84 1.03 6.45 133
19947 5.04 1.12 4.65 161
CLASS A**
1997(A) 4.91% 1.12% 4.72% 7%
1997 4.89 1.28 4.71 90
1996 5.56 1.20 5.32 67
1995 6.59 1.28 6.20 133
19947 4.79 1.37 4.40 161
- --------------------------------
INTERMEDIATE MUNICIPAL BOND FUND
- --------------------------------
CLASS Y**
1997(A) 4.07% 1.07% 3.56% 8%
1997 4.20 1.02 3.73 22
1996 3.73 1.31 3.23 10
1995 3.91 1.26 3.47 9
1994 3.91 1.17 3.37 43
19938 2.74 1.45 1.87 10
CLASS A**
1997(A) 3.87% 1.32% 3.36% 8%
1997 3.92 1.23 3.49 22
1996 3.47 1.61 2.94 10
1995 3.65 1.52 3.21 9
1994 3.66 1.42 3.12 43
19938 2.51 1.68 1.64 10
- --------------------------------
PENNSYLVANIA MUNICIPAL BOND FUND
- --------------------------------
CLASS Y**
1997(A) 4.99% 0.82% 4.25% 17%
1997 5.23 0.83 4.48 39
1996 5.25 0.96 4.50 92
1995 5.26 1.14 4.51 18
19949 5.09 1.17 4.34 3
CLASS A**
1997(A) 4.74% 1.07% 4.00% 17%
1997 4.99 1.08 4.24 39
1996 4.93 1.21 4.18 92
1995 4.95 1.39 4.20 18
19949 4.84 1.42 4.09 3
- ------------------------------
NEW JERSEY MUNICIPAL BOND FUND
- ------------------------------
CLASS Y**
1997(A) 4.96% 0.86% 4.21% 4%
1997 5.02 0.96 4.27 19
1996 4.93 1.12 4.18 21
1995 5.21 1.17 4.46 32
19949 5.07 1.35 4.15 13
CLASS A**
1997(A) 4.71% 1.11% 3.96% 4%
1997 4.81 1.20 4.06 19
1996 4.65 1.35 3.90 21
1995 4.97 1.44 4.21 32
19949 4.82 1.60 3.90 13
<FN>
AMOUNTS DESIGNATED AS "--" ARE EITHER $0 OR HAVE BEEN ROUNDED TO $0.
* ON FEBRUARY 21, 1995, THE SHARES OF THE FUNDS WERE REDESIGNED AS EITHER
RETAIL OR INSTITUTIONAL SHARES. ON THAT DATE, THE FUND'S NET INVESTMENT
INCOME, EXPENSES AND DISTRIBUTIONS FOR THE PERIOD NOVEMBER 1, 1994 THROUGH
FEBRUARY 20, 1995 WERE ALLOCATED TO EACH CLASS OF SHARES. THE BASIS FOR THE
ALLOCATION WAS THE RELATIVE NET ASSETS OF EACH CLASS OF SHARES AS OF FEBRUARY
21, 1995. THE RESULTS WERE COMBINED WITH THE RESULTS OF OPERATIONS AND
DISTRIBUTIONS FOR EACH APPLICABLE CLASS FOR THE PERIOD FEBRUARY 21, 1995
THROUGH OCTOBER 31, 1995. FOR THE YEAR ENDED OCTOBER 31, 1995, THE FINANCIAL
HIGHLIGHTS' RATIOS OF EXPENSES, NET INVESTMENT INCOME, TOTAL RETURN, AND THE
PER SHARE INVESTMENT ACTIVITIES AND DISTRIBUTIONS REFLECT THIS ALLOCATION.
ADDITIONALLY, ON APRIL 22, 1996 THE CONESTOGA SHORT-TERM INCOME AND BOND
FUNDS WERE ACQUIRED BY COREFUNDS, INC. AT WHICH TIME THE INSTITUTIONAL CLASS
OF SHARES OF THESE FUNDS WERE REDESIGNATED CLASS Y AND THE RETAIL CLASS OF
SHARES OF THESE FUNDS WERE REDESIGNATED CLASS A.
** ON APRIL 22, 1996 THE SERIES A SHARES OF EACH FUND, EXCLUDING THE SHORT TERM
INCOME AND BOND FUNDS, WERE REDESIGNATED CLASS Y AND THE SERIES B SHARES OF
EACH FUND, EXCLUDING THE SHORT TERM INCOME AND BOND FUNDS, WERE REDESIGNATED
CLASS A.
***FOR THE YEAR ENDED JUNE 30, 1996, TRANSACTIONS RELATING TO THE MERGER WERE
EXCLUDED FROM THE CALCULATION OF THE PORTFOLIO TURNOVER RATE.
+ THIS FIGURE HAS NOT BEEN ANNUALIZED.
(A)RATIOS FOR THIS SIX-MONTH PERIOD ENDED DECEMBER 31, 1997, 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.
</FN>
</TABLE>
107
<PAGE>
FINANCIAL
HIGHLIGHTS [SQUARE BULLET] COREFUND
- --------------------------------------------------------------------------------
COREFUND MONEY MARKET FUNDS
AS OF
DECEMBER 31, 1997
(UNAUDITED)
For a Share Outstanding Throughout the Period
<TABLE>
<CAPTION>
RATIO RATIO OF NET
NET RATIO OF EXPENSES INCOME
NET ASSET DISTRIBUTIONS NET ASSETS RATIO OF NET TO AVERAGE TO AVERAGE
VALUE NET FROM NET ASSET VALUE END OF EXPENSES INCOME NET ASSETS NET ASSETS
BEGINNING INVESTMENT INVESTMENT END TOTAL OF PERIOD TO AVERAGE TO AVERAGE (EXCLUDING (EXCLUDING
OF PERIOD INCOME INCOME OF PERIOD RETURN (000) NET ASSETS NET ASSETS WAIVERS) WAIVERS)
--------- ---------- --------------- ------------ -------- --------- ----------- ---------- ----------- ------------
- ----------------
TREASURY RESERVE
- ----------------
CLASS Y*
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1997(A) $1.00 $0.03 $(0.03) $1.00 2.57%+ $806,855 0.51% 5.05% 0.70% 4.86%
1997 1.00 0.05 (0.05) 1.00 4.97 835,384 0.51 4.86 0.71 4.66
1996 1.00 0.05 (0.05) 1.00 5.20 892,562 0.50 5.02 0.77 4.75
1995 1.00 0.05 (0.05) 1.00 4.98 479,206 0.48 4.91 0.85 4.54
1994 1.00 0.03 (0.03) 1.00 2.91 484,974 0.48 2.87 0.86 2.49
1993 1.00 0.03 (0.03) 1.00 2.96 446,788 0.46 2.89 0.85 2.50
1992 1.00 0.05 (0.05) 1.00 4.73 444,388 0.38 4.58 0.82 4.14
1991 1.00 0.07 (0.07) 1.00 7.11 427,439 0.37 6.80 0.82 6.35
1990 1.00 0.08 (0.08) 1.00 8.38 270,524 0.37 8.03 0.84 7.56
19892 1.00 0.06 (0.06) 1.00 4.66+ 220,479 0.20 9.26 0.84 8.62
CLASS C*
1997(A) $1.00 $0.03 $(0.03) $1.00 2.44%+ $ 24,414 0.76% 4.80% 0.95% 4.61%
1997 1.00 0.05 (0.05) 1.00 4.71 12,146 0.76 4.61 0.96 4.41
1996 1.00 0.05 (0.05) 1.00 4.94 19,386 0.75 4.81 1.03 4.53
1995 1.00 0.05 (0.05) 1.00 4.72 21,612 0.73 4.81 1.10 4.44
1994 1.00 0.03 (0.03) 1.00 2.65 7,573 0.73 2.62 1.11 2.24
19931 1.00 0.01 (0.01) 1.00 1.21+ 7,672 0.75 2.46 1.14 2.07
- -------------
CASH RESERVE
- -------------
CLASS Y*
1997(A) $1.00 $0.03 $(0.03) $1.00 2.65%+ $956,368 0.52% 5.20% 0.72% 5.00%
1997 1.00 0.05 (0.05) 1.00 5.09 886,251 0.50 4.99 0.70 4.79
1996 1.00 0.05 (0.05) 1.00 5.26 790,211 0.50 5.09 0.78 4.81
1995 1.00 0.05 (0.05) 1.00 5.15 510,341 0.48 5.04 0.85 4.67
1994 1.00 0.03 (0.03) 1.00 3.00 505,273 0.47 2.95 0.85 2.57
1993 1.00 0.03 (0.03) 1.00 2.99 460,832 0.46 2.97 0.85 2.58
1992 1.00 0.05 (0.05) 1.00 4.83 568,672 0.38 4.68 0.82 4.24
1991 1.00 0.07 (0.07) 1.00 7.28 473,187 0.37 6.94 0.82 6.49
1990 1.00 0.08 (0.08) 1.00 8.65 316,290 0.34 8.28 0.80 7.82
1989 1.00 0.09 (0.09) 1.00 8.87 186,151 0.37 8.62 0.90 8.05
1988 1.00 0.07 (0.07) 1.00 6.70 82,399 0.55 6.54 1.14 5.96
CLASS C*
1997(A) $1.00 $0.03 $(0.03) $1.00 2.52%+ $ 79,712 0.77% 4.95% 0.97% 4.75%
1997 1.00 0.05 (0.05) 1.00 4.83 27,693 0.75 4.74 0.95 4.54
1996 1.00 0.05 (0.05) 1.00 5.00 19,736 0.75 4.86 1.03 4.58
1995 1.00 0.05 (0.05) 1.00 4.89 17,583 0.73 4.86 1.10 4.49
1994 1.00 0.03 (0.03) 1.00 2.74 11,451 0.72 2.70 1.10 2.32
19931 1.00 0.01 (0.01) 1.00 1.23+ 15,330 0.76 2.52 1.15 2.13
CLASS B
1997(A)(4) $1.00 $ -- $ -- $1.00 0.50%+ $ 80 1.52% 4.20% 1.72% 4.00%
- ----------------
TAX-FREE RESERVE
- ----------------
CLASS Y*
1997(A) $1.00 $0.02 $(0.02) $1.00 1.63%+ $ 152,822 0.52% 3.17% 0.71% 2.98%
1997 1.00 0.03 (0.03) 1.00 3.08 119,579 0.50 3.07 0.70 2.87
1996 1.00 0.03 (0.03) 1.00 3.20 104,196 0.48 3.14 0.76 2.86
1995 1.00 0.03 (0.03) 1.00 3.12 62,756 0.48 3.09 0.85 2.72
1994 1.00 0.02 (0.02) 1.00 2.03 79,384 0.49 2.00 0.87 1.62
1993 1.00 0.02 (0.02) 1.00 2.23 72,255 0.51 2.20 0.89 1.82
1992 1.00 0.03 (0.03) 1.00 3.56 80,147 0.37 3.39 0.88 2.88
19913 1.00 0.01 (0.01) 1.00 1.07+ 42,573 0.06 4.20 0.81 3.45
CLASS C*
1997(A) $1.00 $0.02 $(0.02) $1.00 1.49%+ $ 12,396 0.77% 2.92% 0.96% 2.73%
1997 1.00 0.03 (0.03) 1.00 2.83 3,202 0.75 2.82 0.95 2.62
1996 1.00 0.03 (0.03) 1.00 2.95 2,850 0.73 2.94 1.02 2.65
1995 1.00 0.03 (0.03) 1.00 2.86 1,524 0.73 2.80 1.10 2.43
1994 1.00 0.02 (0.02) 1.00 1.78 2,708 0.74 1.75 1.12 1.37
19931 1.00 0.01 (0.01) 1.00 0.85+ 1,795 0.76 1.71 1.14 1.33
<FN>
AMOUNTS DESIGNATED AS "--" ARE EITHER $0 OR HAVE BEEN ROUNDED TO $0.
* 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, 1997, 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.
4 COMMENCED OPERATIONS NOVEMBER 18, 1997. RATIOS FOR THE PERIOD HAVE BEEN ANNUALIZED.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
</FN>
</TABLE>
108
<PAGE>
NOTES TO
FINANCIAL
STATEMENTS [SQUARE BULLET] COREFUND
- --------------------------------------------------------------------------------
AS OF
DECEMBER 31, 1997
(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, Global Bond Fund, Intermediate Municipal Bond Fund, Pennsylvania Municipal
Bond Fund, New Jersey Municipal Bond Fund (the Fixed Income Funds), Treasury
Reserve, Cash Reserve, and Tax-Free Reserve (the Money Market Funds) are
portfolios offered by CoreFunds, Inc. (The Company), an open-end investment
company registered under the Investment Company Act of 1940, as amended. The
Company is presently authorized to offers 20 separate portfolios (the Funds):
EQUITY PORTFOLIOS: MONEY MARKET PORTFOLIOS:
Equity Index Fund Treasury Reserve
Core Equity Fund Cash Reserve
Growth Equity Fund Tax-Free Reserve
Special Equity Fund Elite Cash Reserve
International Growth Fund Elite Treasury Reserve
Balanced Fund Elite Tax-Free Reserve
FIXED INCOME PORTFOLIOS:
Short Term Income Fund
Short-Intermediate Bond Fund
Government Income Fund
Bond Fund
Global Bond Fund
Intermediate Municipal Bond Fund
Pennsylvania Municipal Bond Fund
New Jersey Municipal Bond Fund
The financial statements of the Elite Cash Reserve, Elite Treasury Reserve
and Elite Tax-Free Reserve are not presented herein.
The assets of each Portfolio are segregated, and a Shareholder's interest
is limited to the Portfolio in which shares are held. The Funds' prospectus
provides a description of the Funds' investment objectives, policies and
strategies.
2. SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies followed by
the Portfolios.
SECURITY VALUATION--Investment securities of the Equity and Fixed Income
Funds that are listed on a securities exchange for which market quotations are
available are valued by an independent pricing service at the last quoted sales
price for such securities on each business day. If there is no such reported
sale, these securities and unlisted securities for which market quotations are
readily available are valued at the most recent quoted bid price using
procedures determined in good faith by the Board of Trustees. Debt obligations
with sixty days or less remaining until maturity may be valued at their
amortized cost. Under this valuation method, purchase discounts and premiums are
accreted and amortized ratably to maturity and are included in interest income.
Investment securities of the Money Market Funds are stated at amortized
cost, which approximates market value. Under this valuation method, purchase
discounts and premiums are accreted and amortized ratably to maturity and are
included in interest income.
The books and records of the International Growth Fund and Global Bond
Fund are maintained in U.S. dollars. Foreign currency amounts are translated
into U.S. dollars on the following bases:
[BULLET] market value of investment securities, assets and liabilities at
the current rate of exchange; and
[BULLET] purchases and sales of investment securities, income and expenses
at the relevant rates of exchange prevailing on the respective
dates of such transactions.
The International Growth Fund does not isolate the portion of gains or
losses on investments in equity securities that is due to changes in the foreign
exchange rates from that which is due to changes in market prices of equity
securities.
The Global Bond Fund does isolate the effect of fluctuations in foreign
currency rates when determining the gain or loss upon sale or maturity of
foreign currency denominated debt obligations for Federal income tax purposes.
109
<PAGE>
NOTES TO
FINANCIAL
STATEMENTS
- --------------------------------------------------------------------------------
(CONTINUED)
AS OF
DECEMBER 31, 1997
(UNAUDITED)
The International Growth Fund and Global Bond Fund report certain foreign
currency related transactions as components of unrealized and realized gains for
financial reporting purposes, whereas such components are treated as ordinary
income for Federal income tax purposes.
FORWARD FOREIGN CURRENCY CONTRACTS--The International Growth Fund and
Global Bond Fund enter into forward foreign currency contracts as hedges against
either specific transactions or portfolio positions. The aggregate principal
amounts of the contracts are not recorded since 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 settled. Financial future contracts are valued at the settlement
price established each day by the board of trade on an exchange on which they
are traded.
SECURITY TRANSACTIONS AND INVESTMENT INCOME--Security transactions are
accounted for on the trade date of the security purchase or sale. Cost used in
determining net realized capital gains and losses on the sale of securities are
those of the specific securities sold, adjusted for the accretion and
amortization of purchase discounts or premiums during the respective holding
period, which is calculated using the effective interest method. Interest income
is recorded on the accrual basis. Dividend income is recorded on ex-dividend
date.
REPURCHASE AGREEMENTS--Securities pledged as collateral for repurchase
agreements are held by each Portfolio's custodian bank until maturity of the
repurchase agreements. Provisions of the agreements and procedures adopted by
the adviser ensure that the market value of the collateral, including accrued
interest thereon, is sufficient in the event of default by the counterparty. If
the counterparty defaults and the value of the collateral declines or if the
counterparty enters into insolvency proceedings, realization of collateral by
the Portfolio may be delayed or limited.
EXPENSES--Expenses that are directly related to one of the Funds are
charged directly to that Fund. Other operating expenses of the Company are
pro-rated to the Funds on the basis of relative net assets. 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 Fund are
allocated to the respective class on the basis of the relative net asset value
each day.
DISTRIBUTION TO SHAREHOLDERS--The Equity Index Fund, Core Equity Fund,
Growth Equity Fund, Special Equity Fund, Balanced Fund and Global Bond Fund
declare and pay dividends on a quarterly basis. The International Growth Fund
declares and pays dividends periodically. Such dividends are reinvested in
additional shares unless otherwise requested. The Short Term Income Fund,
Short-Intermediate Bond Fund, Government Income Fund, Bond Fund, Intermediate
Municipal Bond Fund, Pennsylvania Municipal Bond Fund, New Jersey Municipal Bond
Fund, Treasury Reserve, Cash Reserve and Tax-Free Reserve distributions from net
investment income are declared on a daily basis and are payable on the first
business day of the following month. Any net realized capital gains on sales of
securities for a Fund are distributed to its shareholders at least annually.
Distributions from net investment income and net realized capital gains are
determined in accordance with U.S. Federal income tax regulations, which may
differ from those amounts determined under generally accepted accounting
principles. These book/tax differences are either temporary or permanent in
nature. To the extent these differences are permanent, they are charged or
credited to paid in capital in the period that the difference arises.
Accordingly, for the International Growth Fund and Global Bond Fund as of
December 31, 1997, $(411,000) and $450,000 was reclassified from accumulated net
realized gain (loss)on investments to accumulated net investment income,
respectively.
FEDERAL INCOME TAXES--It is each Fund's intention to continue to qualify as
a regulated investment company and distribute all of its taxable income.
Accordingly, no provision for Federal income tax is required.
OTHER--Organizational costs incurred with the start up of the Balanced
Fund, Government Income Fund, Short Term Income Fund, Intermediate Municipal
Bond Fund, Global Bond Fund, Pennsylvania Municipal Bond Fund and New Jersey
Municipal Bond Fund are being amortized on a straight line basis over a maximum
period of sixty months. If any or all of the shares representing initial capital
of each fund are redeemed by any holder thereof prior to the end of the
amortization period, the proceeds will be reduced by the unamortized
organizational cost balance in the same proportion as the number of shares
redeemed bears to the initial shares outstanding immediately preceding the
redemption.
110
<PAGE>
[SQUARE BULLET] COREFUND
- --------------------------------------------------------------------------------
3. INVESTMENT ADVISORY AND CUSTODIAL SERVICES
The Company has entered into an investment advisory agreement with
CoreStates Investment Advisers, Inc. ("CSIA") to provide investment advisory
services to each Fund. For its services CSIA receives a fee based on the annual
average daily net assets of each Fund as shown in the following table:
<TABLE>
<CAPTION>
ADVISER INVESTMENT ADVISORY ADVISER INVESTMENT ADVISORY
FUND FEE AGREEMENT DATE FUND FEE AGREEMENT DATE
- -------------------- ------- ------------------- -------------------- ------- -------------------
<S> <C> <C> <C> <C> <C> <C>
Equity Index 0.40% March 25, 1991 Short Term Income 0.74% April 12, 1996
Core Equity 0.74 April 12, 1996 Short-Intermediate Bond 0.50 March 25, 1991
Growth Equity 0.75 March 25, 1991 Government Income 0.50 March 25, 1991
Special Equity 1.50 April 12, 1996 Bond 0.74 April 12, 1996
International Growth 0.80 December 5, 1989 Global Bond 0.60 March 25, 1991
Balanced 0.70 March 25, 1991 Intermediate Municipal
Bond 0.50 March 25, 1991
Treasury Reserve 0.40 April 12, 1996 Pennsylvania Municipal
Cash Reserve 0.40 April 12, 1996 Bond 0.50 May 15, 1994
Tax-Free Reserve 0.40 April 12, 1996 New Jersey Municipal
Bond 0.50 May 15, 1994
</TABLE>
Advisory fees are computed daily and paid monthly for all Funds.
Additionally, for the period ended December 31, 1997, CSIA has voluntarily
waived a portion of their fees in order to assist the Funds in maintaining
competitive expense ratios.
CoreStates Bank serves as Custodian to the Company. Under the Custodian
Agreement, CoreStates Bank holds each Fund's securities and cash items, makes
receipts and disbursements of money on behalf of each Fund, collects and
receives all income and other payments and distributions on account of the
Funds' securities and performs other related services. CoreStates Bank may, in
its discretion and at its own expense, open and maintain a sub-custody account
or employ a sub-custodian on behalf of the Funds investing exclusively in the
United States and may, with the Funds' Board approval and at the expense of the
Funds, employ sub-custodians on behalf of the Funds who invest in foreign
countries provided that CoreStates Bank shall remain liable for the performance
of all of its duties under the Custodian Agreement.
Sub-Advisory services are provided to the CoreStates Advisers for the
International Growth Fund by Martin Currie, Inc. and Aberdeen Managers (The
"Sub-Advisers"). Sub-Advisory services are provided for the Global Bond Fund by
Analytic TSA (formerly Alpha Global). CoreStates Advisers is responsible for the
supervision, and payment of fees to the Sub-Advisers in connection with their
services.
4. ADMINISTRATIVE, TRANSFER AGENT AND DISTRIBUTION SERVICES
Pursuant to an Administration agreement dated October 30, 1992, as amended
June 1, 1995, SEI Fund Resources ("SFR") acts as the Fund's Administrator. Under
the terms of such agreement, SFR is entitled to receive an annual fee of 0.25%
on the average net assets of the Funds. SFR voluntarily waives a portion of
their fees in order to assist the Funds in maintaining competitive expense
ratios.
Pursuant to a Transfer Agency agreement dated November 16, 1995, Boston
Financial Data Services ("BFDS"), a wholly owned subsidiary of State Street Bank
and Trust Company acts as the Funds' Transfer Agent. As such, BFDS provides
transfer agency, dividend disbursing and shareholder servicing for the Funds.
On November 2, 1992, SEI Financial Services ("SFS"), a wholly owned
subsidiary of SEI, became the Funds' exclusive Distributor pursuant to a
distribution agreement dated October 30, 1992.
The Company has adopted a Distribution Plan (the "Plan") for those Funds
offering Class A, C and B 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 and 1.00% of the daily net assets of each Class B Portfolio.
The Company has also adopted a Shareholder Servicing Plan for those Funds
offering Class B shares. The Shareholder Servicing Plan provides for the payment
by the Company to the Distributor of up to 25% of the daily net assets of each
Class B Portfolio to which the Plan is applicable. The Distributor is authorized
to use these fees as compensation for its distribution-related services and as
payment to certain securities broker/dealers and financial institutions that
enter into shareholder servicing agreements or broker agreements with the
Distributor. The Funds paid approximately $850,104 to affiliated brokers for
commissions earned on the sales of the shares of the Funds for the six month
period ended December 31, 1997.
Certain officers of the Company are also officers of the Administrator.
Such officers are paid no fees by the Funds.
111
<PAGE>
NOTES TO
FINANCIAL
STATEMENTS
- --------------------------------------------------------------------------------
(CONTINUED)
AS OF
DECEMBER 31, 1997
(UNAUDITED)
A contingent Deferred Sales Charge (CDSC) is imposed on redemptions made in
the Class B shares. The CDSC varies depending on the number of years from the
time of payment for the purchase of Class B shares until the redemption of such
shares.
Contingent Deferred Sales
Year Charges as a Percentage
Since of Dollar Amount
Purchase Subject to Charge
-------- ------------------------
First 5.00%
Second 4.00%
Third 3.00%
Fourth 2.00%
Fifth 1.00%
Sixth None
Seventh Convert to Class A Shares
5. INVESTMENT TRANSACTIONS
During the six month period ended December 31, 1997, purchases of
securities and proceeds from sales of securities, other than temporary
investments in short-term securities, were as follows:
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------
-------------------------------- -------------------------------
PURCHASES SALES
-------------------------------- -------------------------------
U.S. U.S.
PORTFOLIO INVESTMENT TRANSACTIONS (000) GOVERNMENT OTHER TOTAL GOVERNMENT OTHER TOTAL
---------- ----- ------- ---------- ------- --------
<S> <C> <C> <C> <C>
Equity Index Fund -- 26,703 26,703 -- 22,386 22,386
Core Equity Fund -- 132 132 -- 151,787 151,787
Growth Equity Fund -- 66,463 66,463 -- 71,272 71,272
Special Equity Fund -- 24,748 24,748 -- 30,293 30,293
International Growth Fund -- 38,930 38,930 -- 39,848 39,848
Balanced Fund -- 36,206 36,206 -- 34,822 34,822
Short Term Income Fund 2,753 5,191 7,944 4,333 5,139 9,472
Short-Intermediate Bond Fund 65,819 39,422 105,241 69,963 33,236 103,199
Government Income Fund 5,451 -- 5,451 3,814 -- 3,814
Bond Fund 81,637 39,056 120,693 105,566 65,138 170,704
Global Bond Fund -- 41,416 41,416 -- 4,688 4,688
Intermediate Municipal Fund -- 139 139 -- 232 232
Pennsylvania Municipal Bond Fund -- 7,890 7,890 -- 2,405 2,405
New Jersey Municipal Bond Fund -- 353 353 -- 76 76
- ----------------------------------------------------------------------------------------------------------------
</TABLE>
Certain net capital losses incurred subsequent to October 31, 1996 have
been deferred for tax purposes and will be recognized during the fiscal year
ended June 30, 1998. The Funds had capital loss carryforwards at December 31,
1997, as follows:
<TABLE>
<CAPTION>
CAPITAL LOSS
CARRYOVER EXPIRES EXPIRES EXPIRES EXPIRES
6/30/97 2002 2003 2004 2005
------------ ---------- ---------- ----------- -----------
<S> <C> <C> <C> <C> <C>
Short Term Income Fund $ 88,520 $ -- $ -- $ -- $ 88,520
Short-Intermediate Bond Fund 2,907,103 -- 1,483,436 217,497 1,206,170
Government Income Fund 319,174 -- 222,660 4,127 92,387
Bond Fund 1,702,115 -- -- -- 1,702,115
Global Bond Fund 1,573,551 -- 844,493 -- 729,058
Intermediate Term Municipal Bond Fund 79,158 -- 41,918 34,827 2,413
Pennsylvania Municipal Bond Fund 96,691 73,679 95 8,784 14,133
Treasury Reserve 9,082 -- -- -- 9,082
Cash Reserve 167,012 134,628 23,362 9,022 --
Tax-Free Reserve 54,381 5,273 44,981 4,127 --
- -------------------------------------------------------------------------------------------------------------
</TABLE>
For tax purposes, the losses in the Funds can be carried forward for a maximum
of eight years to offset any net realized capital gains.
At December 31, 1997 the total cost of securities and the net realized
gains or losses on securities sold for Federal income tax purposes was not
materially different from amounts reported for financial purposes. The aggregate
gross unrealized gain or loss on securities at December 31, 1997 for each fund
within the CoreFunds is as follows:
112
<PAGE>
[SQUARE BULLET] COREFUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------
------------ ------------ --------
AGGREGATE AGGREGATE
GROSS GROSS
AGGREGATE GROSS UNREALIZED GAIN (LOSS) (000) APPRECIATION DEPRECIATION NET
------------ ------------ --------
<S> <C> <C> <C>
Equity Index Fund $119,666 $ (3,247) $116,419
Core Equity Fund 149,108 (16,936) 132,172
Growth Equity Fund 57,102 (1,766) 55,336
Special Equity Fund 15,922 (11,198) 4,724
International Growth Fund 29,294 (10,958) 18,336
Balanced Fund 23,572 (985) 22,587
Short Term Income Fund 89 (8) 81
Short-Intermediate Bond Fund 1,991 (24) 1,967
Government Income Fund 570 (15) 555
Bond Fund 4,190 (25) 4,165
Global Bond Fund 554 (881) (327)
Intermediate Municipal Bond Fund 56 -- 56
Pennsylvania Municipal Bond Fund 640 (4) 636
New Jersey Municipal Bond Fund 104 -- 104
- ---------------------------------------------------------------------------------------------------------------
</TABLE>
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, 1997:
- -------------------------------------------------------------------------------
GLOBAL BOND FUND:
Foreign Currency Sales:
Contracts to In Exchange Unrealized
Deliver/Receive For Appreciation
--------------- ----------- ------------
3/23/98 DM 10,750,000 $6,101,645 $ 96,870
3/23/98 DK 19,000,000 2,829,149 44,204
3/12/98 FF 10,500,000 1,761,036 8,991
3/12/98 GP 1,950,000 3,197,318 34,913
3/23/98 SK 13,600,000 1,763,451 46,185
---------
Net Unrealized Appreciation $ 231,163
=========
- --------------------------------------------------------------------------------
CURRENCY LEGEND
- ---------------
DM German Marks
DK Danish Kroner
FF French Francs
GP British Pounds
SK Swedish Krona
113
<PAGE>
NOTES TO
FINANCIAL
STATEMENTS
- --------------------------------------------------------------------------------
(CONTINUED)
AS OF
DECEMBER 31, 1997
(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 that
include revenue bonds, tax exempt commercial paper, tax and revenue anticipation
notes, and general obligation bonds. At December 31, 1997, the percentage of
portfolio investments by each revenue source was as follows:
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------
------------ ------------ --------- --------
INTERMEDIATE PENNSYLVANIA NEW JERSEY
MUNICIPAL MUNICIPAL MUNICIPAL
BOND BOND BOND TAX-FREE
FUND FUND FUND RESERVE
------------ ------------ ---------- --------
REVENUE BONDS:
<S> <C> <C> <C> <C>
Education Bonds 17% 18% 15% 7%
Health Care Bonds 3 13 5 10
Transportation Bonds 12 5 7 7
Utility Bonds 14 16 17 4
Housing Bonds -- 2 -- 10
Pollution Control Bonds -- -- -- 10
Industrial Development Bonds 6 16 -- 8
Public Facility Bonds -- 1 2 3
Other 12 2 7 10
GENERAL OBLIGATIONS 36 24 47 6
TAX EXEMPT COMMERCIAL PAPER -- -- -- 21
TAX AND REVENUE ANTICIPATION NOTES -- -- -- 3
TAX ANTICIPATION NOTES -- 3 -- 1
----- ----- ----- ----
100% 100% 100% 100%
- ---------------------------------------------------------------------------------------------------------------
</TABLE>
Many municipalities insure their obligations with insurance underwritten by
insurance companies which undertake to pay a holder, when due, the interest and
principal amount on an obligation if the issuer defaults on its obligation.
Although bond insurance reduces the risk of loss due to default by the issuer,
there is no assurance that the insurance company will meet its obligations.
Also, some of the securities have credit enhancements (letters of credit or
guarantees issued by third party domestic or foreign banks or other
institutions). At December 31, 1997, the percentage of securities with credit
enhancements are as follows:
- ----------------------------------------------------------------------------
------- ---------
LETTERS
OF BOND
CREDIT INSURANCE
------- ---------
Intermediate Municipal Bond Fund -- 64.9%
Pennsylvania Municipal Bond Fund -- 62.1
New Jersey Municipal Bond Fund -- 38.4
Tax-Free Reserve 53.3% 27.6
- ----------------------------------------------------------------------------
114
<PAGE>
[SQUARE BULLET] COREFUND
- --------------------------------------------------------------------------------
8. SHARE TRANSACTIONS (000):
The following are the share transactions for the six month period ended December
31, 1997.
<TABLE>
<CAPTION>
------ ------- ------ ------- ------------- -------- -------- ------- --------
EQUITY CORE GROWTH SPECIAL INTERNATIONAL
INDEX EQUITY EQUITY EQUITY GROWTH BALANCED TREASURY CASH TAX-FREE
FUND FUND(1) FUND FUND FUND FUND RESERVE RESERVE RESERVE
------ ------- ------ ------- ------------- -------- -------- ------- --------
CLASS Y
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Shares issued 613 2,134 1,130 590 3,024 830 1,198,732 1,030,078 170,940
Shares issued in lieu
of cash distributions 223 3,181 639 816 543 449 1,462 1,865 96
Shares redeemed (664) (2,642) (1,381) (841) (2,727) (766) (1,228,616) (961,599) (137,772)
---- ------ ------ ---- ------ ---- ---------- --------- --------
Net increase 172 2,673 388 565 840 513 (28,422) 70,344 33,264
==== ====== ====== ==== ====== ==== ========== ========= ========
CLASS A/C
Shares issued 117 123 43 42 18 108 34,333 107,066 24,342
Shares issued in lieu
of cash distributions 8 120 25 34 9 24 272 1,229 132
Shares redeemed 16 (78) (23) (15) (17) (35) (22,458) (56,508) (15,279)
---- ------ ------ ---- ------ ---- ---------- --------- --------
Net increase 109 165 45 61 10 97 12,147 51,787 9,195
==== ====== ====== ==== ====== ==== ========== ========= ========
CLASS B
Shares issued 19 6 6 10 1 40 -- 88 --
Shares issued in lieu
of cash distributions -- 1 -- 2 -- 2 -- -- --
Shares redeemed -- -- -- -- -- -- -- (8) --
---- ------ ------ ---- ------ ---- ---------- --------- --------
Net increase 19 7 6 12 1 42 -- 80 --
==== ====== ====== ==== ====== ==== ========== ========= ========
TOTAL SHARE ACTIVITY
FOR PERIOD 300 2,845 439 638 851 652 (16,275) 122,211 42,459
==== ====== ====== ==== ====== ==== ========== ========= ========
<FN>
(1) THIS FUND WAS FORMERLY KNOWN AS THE EQUITY FUND.
AMOUNTS DESIGNATED AS "--" ARE EITHER $0 OR HAVE BEEN ROUNDED TO $0.
</FN>
</TABLE>
<TABLE>
<CAPTION>
---------- ------------ ---------- ------ ------ ------------ ------------ ----------
SHORT TERM SHORT- GOVERNMENT GLOBAL INTERMEDIATE PENNSYLVANIA NEW JERSEY
INCOME INTERMEDIATE INCOME BOND BOND MUNICIPAL MUNICIPAL MUNICIPAL
FUND BOND FUND FUND FUND FUND BOND FUND BOND FUND BOND FUND
---------- ------------ ---------- ------ ------ ------------ ------------ ----------
CLASS Y
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Shares issued 616 2,018 309 1,147 95 3 270 17
Shares issued in lieu
of cash distributions 88 454 35 479 137 -- 12 1
Shares repurchased (692) (1,998) (195) (2,950) (42) (14) (55) (10)
---- ------ ---- ------ --- --- --- ---
Net increase (decrease) 12 474 149 (1,324) 190 (11) 227 8
==== ====== ==== ====== === === === ===
CLASS A
Shares issued 7 29 31 42 7 6 241 16
Shares issued in lieu
of cash distributions 1 6 4 4 1 2 6 1
Shares repurchased -- (31) (23) (12) (1) (9) (12) (7)
---- ------ ---- ------ --- --- --- ---
Net increase (decrease) 8 4 12 34 7 (1) 235 10
==== ====== ==== ====== === === === ===
TOTAL SHARE ACTIVITY
FOR PERIOD 20 478 161 (1,290) 197 (12) 462 18
==== ====== ==== ====== === === === ===
<FN>
AMOUNTS DESIGNATED AS "--" ARE EITHER $0 OR HAVE BEEN ROUNDED TO $0.
</FN>
</TABLE>
115
<PAGE>
NOTES TO
FINANCIAL
STATEMENTS
- --------------------------------------------------------------------------------
(CONCLUDED)
AS OF
DECEMBER 31, 1997
(UNAUDITED)
9. SHAREHOLDER VOTING RIGHTS
There was a special meeting scheduled for December 15, 1997 at which the
shareholders of the International Growth Fund voted on to approve the selection
of Aberdeen Managers as a sub-adviser for a portion of the assets of the
International Growth Fund. The results are as follows:
Shares Voted % of Voted % of Total
----------- ---------- ----------
FOR 8,203,048.00 98.77% 70.55%
AGAINST 11,795.00 0.14% 0.10%
ABSTAIN 89,958.00 1.08% 0.77%
10. PROPOSED REORGANIZATION
On November 18, 1997, CoreStates Financial Corp. and First Union
Corporation jointly announced that they had signed a definitive agreement for
the merger of CoreStates Bank, N.A. and First Union Bank. The Advisor is
currently a wholly-owned subsidiary of CoreStates Bank, N.A. Subject to certain
conditions, it is anticipated that the transaction will close at the end of
April, 1998. Thereafter, the Advisor will be an indirect wholly-owned subsidiary
of First Union Bank. A special meeting of shareholders will be called to
consider certain proposed fund reorganizations.
116
<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 DISTRIBUTION CO. SERVES AS
DISTRIBUTOR AND IS NOT AFFILIATED WITH CORESTATES BANK, N.A.
- --------------------------------------------------------------------------------
<PAGE>
STATEMENT
OF
OPERATIONS [SQUARE BULLET] COREFUND
- --------------------------------------------------------------------------------
(000)
COREFUND EQUITY FUNDS
AS OF
DECEMBER 31, 1997
(UNAUDITED)
<TABLE>
<CAPTION>
------------ -------------- --------------
EQUITY CORE EQUITY GROWTH
INDEX FUND FUND(3) EQUITY FUND
------------ -------------- --------------
INVESTMENT INCOME:
<S> <C> <C> <C>
Dividends $ 2,223 $ 3,344 $ 561
Interest 22 138 123
Less: Foreign taxes withheld -- -- --
-------- -------- ---------
Total investment income 2,245 3,482 684
-------- -------- ---------
EXPENSES:
Investment advisory fees 533 2,147 632
Less: waiver of investment advisory fees (318) -- --
Administrative fees 333 725 211
Less: waiver of administrative fees (119) (164) (76)
Transfer agent fees & expenses 36 51 13
Custodian fees -- -- --
Professional fees 5 23 3
Registration & filing fees 8 14 4
12b-1 fees--individual shares -- 23 7
Taxes--other than income 3 13 2
Printing fees 25 57 17
Organizational costs -- -- --
Miscellaneous -- 14 6
-------- -------- ---------
Total expenses 506 2,903 819
-------- -------- ---------
NET INVESTMENT INCOME (LOSS) 1,739 579 (135)
-------- -------- ---------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS, FORWARD FOREIGN CURRENCY
CONTRACTS AND FOREIGN CURRENCY:
Net realized gain from security transactions 5,184 40,986 11,173
Net realized (loss) on forward foreign currency contracts and
foreign currency transactions -- -- --
Net unrealized depreciation on forward foreign currency contracts and
translation of assets and liabilities in foreign currencies -- -- --
Net change in unrealized appreciation (depreciation) on investments 17,916 20,773 10,360
-------- -------- ---------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS $24,839 $62,338 $21,398
======== ======== =========
COMPUTATION OF NET ASSET VALUE AND OFFERING PRICE - DECEMBER 31, 1997:
CLASS Y
1Net asset value, offer and redemption price $ 39.65 $ 20.60 $ 16.33
======== ======== =========
CLASS A
1Net asset value, redemption price
Maximum sales charge of 5.50% 39.66 20.61 16.27
-------- -------- ---------
2Offering price $ 41.97 $ 21.81 $ 17.22
======== ======== =========
CLASS B
4Net asset value and offering price $ 39.12 $ 18.31 $ 16.19
======== ======== =========
-------------- -------------- --------------
SPECIAL INTERNATIONAL BALANCED
EQUITY FUND GROWTH FUND FUND
-------------- -------------- --------------
INVESTMENT INCOME:
<S> <C> <C> <C>
Dividends $ 212 $ 1,039 $ 379
Interest 43 152 1,481
Less: Foreign taxes withheld -- (111) --
-------- ------- ------
Total investment income 255 1,080 1,860
-------- ------- ------
EXPENSES:
Investment advisory fees 607 666 444
Less: waiver of investment advisory fees (263) -- (76)
Administrative fees 101 208 158
Less: waiver of administrative fees (36) (75) (57)
Transfer agent fees & expenses 21 (10) 11
Custodian fees 5 6 --
Professional fees (5) 2 3
Registration & filing fees 9 (7) --
12b-1 fees--individual shares 4 3 7
Taxes--other than income 1 -- 1
Printing fees 11 2 16
Organizational costs -- -- 18
Miscellaneous 1 -- --
-------- ------- ------
Total expenses 456 795 525
-------- ------- ------
NET INVESTMENT INCOME (LOSS) (201) 285 1,335
-------- ------- ------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS, FORWARD FOREIGN CURRENCY
CONTRACTS AND FOREIGN CURRENCY:
Net realized gain from security transactions 7,997 2,385 3,960
Net realized (loss) on forward foreign currency contracts and
foreign currency transactions -- (411) --
Net unrealized depreciation on forward foreign currency contracts and
translation of assets and liabilities in foreign currencies -- (12) --
Net change in unrealized appreciation (depreciation) on investments (1,796) (10,180) 3,388
-------- ------- ------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS $ 6,000 (7,933) $8,683
======== ======= ======
COMPUTATION OF NET ASSET VALUE AND OFFERING PRICE - DECEMBER 31, 1997:
CLASS Y
1Net asset value, offer and redemption price $ 10.65 $ 13.28 $13.60
======== ======= ======
CLASS A
1Net asset value, redemption price
Maximum sales charge of 5.50% 10.60 13.28 13.60
-------- ------- ------
2Offering price $ 11.22 $ 14.05 $14.39
======== ======= ======
CLASS B
4Net asset value and offering price $ 10.48 $ 13.28 $13.51
======== ======= ======
<FN>
AMOUNTS DESIGNATED AS "--" ARE EITHER $0 OR HAVE BEEN ROUNDED TO $0
1 NET ASSET VALUE PER SHARE, AS ILLUSTRATED, IS THE AMOUNT WHICH WOULD BE PAID
UPON THE REDEMPTION OR EXCHANGE OF SHARES.
2 THE OFFER PRICE IS CALCULATED BY DIVIDING THE NET ASSET VALUE OF CLASS A BY 1
MINUS THE MAXIMUM SALES CHARGE OF 5.50%.
3 THIS FUND WAS FORMERLY KNOWN AS THE EQUITY FUND.
4 CLASS B HAS A CONTINGENT DEFERRED SALES CHARGE. FOR A DESCRIPTION OF POSSIBLE
REDEMPTION CHARGE, SEE THE NOTES TO THE FINANCIAL STATEMENTS.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
</FN>
</TABLE>
92 & 93
<PAGE>
STATEMENT
OF
OPERATIONS [SQUARE BULLET] COREFUND
- --------------------------------------------------------------------------------
(000)
COREFUND FIXED INCOME FUNDS
AS OF
DECEMBER 31, 1997
(UNAUDITED)
<TABLE>
<CAPTION>
-------------- -------------- -------------
SHORT TERM SHORT-
INCOME INTERMEDIATE GOVERNMENT
FUND BOND FUND INCOME FUND
-------------- -------------- -------------
INVESTMENT INCOME
<S> <C> <C> <C>
Interest $1,120 $5,458 $ 758
------ ------ ------
Total Investment income 1,120 5,458 758
------ ------ ------
EXPENSES
Investment advisory fees 139 426 55
Less: waiver of investment advisory fees (92) (170) (2)
Administrative fees 47 213 28
Less:waiver of administrative fees (17) (77) (10)
Transfer agent fees & expenses 6 18 2
Custodian fees 6 -- --
Professional fees -- 4 1
Registration & filing fees (3) 6 1
12b-1 fees--individual shares 1 3 2
Trustee fees 1 2 --
Printing fees 2 11 1
Organizational costs 1 -- 3
Miscellaneous 1 6 1
------ ------ ------
Total expenses 92 442 82
------ ------ ------
NET INVESTMENT INCOME 1,028 5,016 676
------ ------ ------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS, FORWARD FOREIGN CURRENCY
CONTRACTS AND FOREIGN CURRENCY:
Net realized gain (loss) from:
Security transactions 8 461 88
Option transactions -- -- --
Net realized gain on forward foreign currency contracts and
foreign currency transactions -- -- --
Net unrealized depreciation on forward foreign currency
contracts and translation of other assets and liabilities
in foreign currencies -- -- --
Net change in unrealized appreciation (depreciation)
on investments 68 1,670 515
------ ------ ------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $1,104 $7,147 $1,279
====== ====== ======
COMPUTATION OF NET ASSET VALUE AND OFFERING PRICE - JUNE 30, 1997:
CLASS Y
1Net asset value, offer and redemption price $ 9.99 $ 9.95 $10.03
====== ====== ======
CLASS A
1Net asset value, redemption price
Maximum sales charge of 3.25% or 4.75% 9.98 9.95 10.03
------ ------ ------
2Offering price $10.32 $10.28 $10.37
====== ====== ======
------------ -------------- ------------
GLOBAL INTERMEDIATE
BOND BOND MUNICIPAL
FUND FUND BOND FUND
------------ -------------- ------------
INVESTMENT INCOME
<S> <C> <C> <C>
Interest $ 6,153 $1,055 $ 46
------- ------- -------
Total Investment income 6,153 1,055 46
------- ------- -------
EXPENSES
Investment advisory fees 675 108 5
Less: waiver of investment advisory fees (356) (18) (5)
Administrative fees 228 45 2
Less:waiver of administrative fees (82) (16) (1)
Transfer agent fees & expenses 7 (1) --
Custodian fees 11 1 --
Professional fees 8 1 --
Registration & filing fees 18 1 2
12b-1 fees-- individual shares 2 -- 1
Trustee fees -- -- --
Printing fees 10 -- --
Organizational costs -- 2 3
Miscellaneous 5 -- --
------- ------- -------
Total expenses 526 123 7
------- ------- -------
NET INVESTMENT INCOME 5,627 932 39
------- ------- -------
NETREALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS, FORWARD FOREIGN CURRENCY
CONTRACTS AND FOREIGN CURRENCY:
Net realized gain (loss) from:
Security transactions 1,499 (41) 3
Option transactions -- (400) --
Net realized gain on forward foreign currency contracts and
foreign currency transactions -- 450 --
Net unrealized depreciation on forward foreign currency
contracts and translation of other assets and liabilities
in foreign currencies -- (98) --
Net change in unrealized appreciation (depreciation)
on investments 3,530 (90) 35
------- ------- -------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $10,656 $ 753 $ 77
======= ======= =======
COMPUTATION OF NET ASSET VALUE AND OFFERING PRICE - JUNE 30, 1997:
CLASS Y
1Net asset value, offer and redemption price $ 10.53 $ 9.33 $10.25
======= ======= =======
CLASS A
1Net asset value, redemption price
Maximum sales charge of 3.25% or 4.75% 10.53 9.32 10.25
------- ------- -------
2Offering price $ 11.06 $ 9.78 $10.59
======= ======= =======
-------------- --------------
PENNSYLVANIA NEW JERSEY
MUNICIPAL MUNICIPAL
BOND FUND BOND FUND
-------------- --------------
INVESTMENT INCOME
<S> <C> <C>
Interest $ 375 $ 53
------- -------
Total Investment income 375 53
------- -------
EXPENSES
Investment advisory fees 37 5
Less: waiver of investment advisory fees (37) (5)
Administrative fees 19 2
Less:waiver of administrative fees (19) (2)
Transfer agent fees & expenses 1 --
Custodian fees -- --
Professional fees -- --
Registration & filing fees 1 --
12b-1 fees--individual shares 4 1
Trustee fees -- --
Printing fees 1 --
Organizational costs 2 1
Miscellaneous -- --
------- -------
Total expenses 9 2
------- -------
NET INVESTMENT INCOME 366 51
------- -------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS, FORWARD FOREIGN CURRENCY
CONTRACTS AND FOREIGN CURRENCY:
Net realized gain (loss) from:
Security transactions 40 (1)
Option transactions -- --
Net realized gain on forward foreign currency contracts and
foreign currency transactions -- --
Net unrealized depreciation on forward foreign currency
contracts and translation of other assets and liabilities
in foreign currencies -- --
Net change in unrealized appreciation (depreciation)
on investments 378 57
------- -------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 784 $ 107
======= =======
COMPUTATION OF NET ASSET VALUE AND OFFERING PRICE - JUNE 30, 1997:
CLASS Y
1Net asset value, offer and redemption price $10.77 $10.46
======= =======
CLASS A
1Net asset value, redemption price
Maximum sales charge of 3.25% or 4.75% 10.78 10.45
------- -------
2Offering price $11.32 $10.97
======= =======
<FN>
AMOUNTS DESIGNATED AS "--" ARE EITHER $0 OR HAVE BEEN ROUNDED TO $0.
1 NET ASSET VALUE PER SHARE, AS ILLUSTRATED, IS THE AMOUNT WHICH WOULD BE PAID
UPON THE REDEMPTION OR EXCHANGE OF SHARES.
2 THE OFFER PRICE IS CALCULATED BY DIVIDING THE NET ASSET VALUE OF CLASS A BY 1
MINUS THE MAXIMUM SALES CHARGE OF 3.25% FOR THE SHORT TERM INCOME, SHORT-
INTERMEDIATE BOND, GOVERNMENT INCOME AND INTERMEDIATE MUNICIPAL BOND FUNDS AND
4.75% FOR THE BOND, GLOBAL BOND, PENNSYLVANIA MUNICIPAL BOND AND NEW JERSEY
MUNICIPAL BOND FUNDS.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
</FN>
</TABLE>
94 & 95
<PAGE>
STATEMENT
OF
OPERATIONS [SQUARE BULLET] COREFUND
- --------------------------------------------------------------------------------
(000)
COREFUND MONEY MARKET FUNDS
AS OF
DECEMBER 31, 1997
(UNAUDITED)
<TABLE>
<CAPTION>
-------- ------- --------
TREASURY CASH TAX-FREE
RESERVE RESERVE RESERVE
-------- ------- --------
INVESTMENT INCOME:
<S> <C> <C> <C>
Interest $ 24,754 $ 27,544 $ 2,735
-------- -------- -------
Total investment income 24,754 27,544 2,735
-------- -------- -------
EXPENSES:
Investment advisory fees 1,113 1,926 185
Less: waiver of investment advisory fees (401) (481) (67)
Administrative fees 1,781 1,204 296
Less: waiver of administrative fees (446) (433) (74)
Transfer agent fees & expenses 71 117 14
Custodian fees 1 1 --
Professional fees 25 10 3
Registration & filing fees 4 60 20
12b-1 fees 23 64 12
Trustee fees 10 11 5
Printing 65 77 5
Miscellaneous 63 32 (1)
-------- -------- -------
Total expenses 2,309 2,588 398
-------- -------- -------
NET INVESTMENT INCOME 22,445 24,956 2,337
-------- -------- -------
NET REALIZED GAIN ON INVESTMENTS:
Net realized gain from security
transactions 14 5 --
-------- -------- -------
NET INCREASE IN NET ASSETS RESULTING
FROM OPERATIONS $ 22,459 $ 24,961 $ 2,337
======== ======== =======
<FN>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
</FN>
</TABLE>
96
<PAGE>
[This page intentionally left blank.]
<PAGE>
STATEMENT
OF CHANGES
IN NET ASSETS [SQUARE BULLET] COREFUND
- --------------------------------------------------------------------------------
(000)
COREFUND EQUITY FUNDS
AS OF
DECEMBER 31, 1997
(UNAUDITED)
<TABLE>
<CAPTION>
------------------- -------------------
EQUITY CORE EQUITY
INDEX FUND FUND(2)
------------------- -------------------
7/1/97 7/1/96 7/1/97 7/1/96
TO TO TO TO
12/31/97 6/30/97 12/31/97 6/30/97
-------- ------- -------- -------
OPERATIONS:
<S> <C> <C> <C> <C>
Net investment income $ 1,739 $ 3,256 $ 579 $ 2,927
Net realized gain on investments, forward foreign currency contracts and foreign
currency 5,184 3,591 40,986 66,598
Net unrealized appreciation on investments, forward foreign currency contracts
and translation of assets and liabilites in foreign currencies 17,916 55,389 20,773 67,597
-------- -------- -------- --------
Net increase (decrease) in net assets resulting from operations 24,839 62,236 62,338 137,122
-------- -------- -------- --------
DIVIDENDS DISTRIBUTED FROM:
Net investment income:
Class Y (1,685) (3,225) (595) (2,858)
Class A (48) (28) -- (49)
Class B (2) -- -- --
Net realized gains:
Class Y (8,013) (1,484) (69,731) (35,253)
Class A (265) (6) (2,421) (977)
Class B (16) -- (17) --
-------- -------- -------- --------
Total dividends distributed (10,029) (4,743) (72,764) (39,137)
-------- -------- -------- --------
CAPITAL TRANSACTIONS (1):
Class Y:
Proceeds from shares issued 24,068 -- 48,159 56,759
Reinvestment of cash distributions 8,774 -- 63,917 38,110
Cost of shares redeemed (25,937) -- (59,580) (89,855)
-------- -------- -------- --------
Increase in net assets from Class Y transactions 6,905 -- 52,496 5,014
-------- -------- -------- --------
Class A:
Proceeds from shares issued 4,631 43,492 2,811 3,395
Reinvestment of cash distributions 330 4,960 2,403 1,038
Cost of shares redeemed (655) (30,407) (1,722) (2,376)
-------- -------- -------- --------
Increase in net assets from Class A transactions 4,306 18,045 3,492 2,057
-------- -------- -------- --------
Class B:
Proceeds from shares issued 732 4,101 132 --
Reinvestment of cash distributions 18 34 17 --
Cost of shares redeemed (5) (103) -- --
-------- -------- -------- --------
Increase (decrease) in net assets from Class B transactions 745 4,032 149 --
-------- -------- -------- --------
Increase in net assets derived from capital share transactions 11,956 22,077 56,137 7,071
-------- -------- -------- --------
Net increase (decrease) in net assets 26,766 79,570 45,711 105,056
-------- -------- -------- --------
NET ASSETS:
Beginning of period 245,920 166,350 531,058 426,002
-------- -------- -------- --------
End of period $272,686 $245,920 $576,769 $531,058
======== ======== ======== ========
------------------- ------------------
GROWTH SPECIAL
EQUITY FUND EQUITY FUND
------------------- ------------------
7/1/97 7/1/96 7/1/97 7/1/96
TO TO TO TO
12/31/97 6/30/97 12/31/97 6/30/97
-------- ------- -------- -------
OPERATIONS:
<S> <C> <C> <C> <C>
Net investment income $ (135) $ 399 $ (201) $ 121
Net realized gain on investments, forward foreign currency contracts and foreign
currency 11,173 14,635 7,997 7,793
Net unrealized appreciation on investments, forward foreign currency contracts
and translation of assets and liabilites in foreign currencies 10,360 12,411 (1,796) 3,603
-------- -------- ------- -------
Net increase (decrease) in net assets resulting from operations 21,398 27,445 6,000 11,517
-------- -------- ------- -------
DIVIDENDS DISTRIBUTED FROM:
Net investment income:
Class Y -- (393) -- (177)
Class A -- (3) -- (2)
Class B -- -- -- --
Net realized gains:
Class Y (11,719) (13,864) (350) (13,011)
Class A (400) (404) (9,099) (307)
Class B (7) -- (15) --
-------- -------- ------- -------
Total dividends distributed (12,126) (14,664) (9,464) (13,497)
-------- -------- ------- -------
CAPITAL TRANSACTIONS (1):
Class Y:
Proceeds from shares issued 18,945 -- 7,178 --
Reinvestment of cash distributions 10,162 -- 8,424 --
Cost of shares redeemed (23,121) -- (10,285) --
-------- -------- ------- -------
(Decrease) in net assets from Class Y transactions 5,986 -- 5,317 --
-------- -------- ------- -------
Class A:
Proceeds from shares issued 728 38,807 516 13,884
Reinvestment of cash distributions 400 12,752 349 13,074
Cost of shares redeemed (390) (36,303) (179) (16,684)
-------- -------- ------- -------
Increase in net assets from Class A transactions 738 15,256 686 10,274
-------- -------- ------- -------
Class B:
Proceeds from shares issued 102 1,712 124 1,020
Reinvestment of cash distributions 7 410 15 310
Cost of shares redeemed -- (1,001) -- (121)
-------- -------- ------- -------
Increase (decrease) in net assets from Class B transactions 109 1,121 139 1,209
-------- -------- ------- -------
Increase in net assets derived from capital share transactions 6,833 16,377 6,142 11,483
-------- -------- ------- -------
Net increase (decrease) in net assets 16,105 29,158 2,678 9,503
-------- -------- ------- -------
NET ASSETS:
Beginning of period 152,393 123,235 74,327 64,824
-------- -------- ------- -------
End of period $168,498 $152,393 $77,005 $74,327
======== ======== ======= =======
------------------- -------------------
INTERNATIONAL BALANCED
GROWTH FUND FUND
------------------- -------------------
7/1/97 7/1/96 7/1/97 7/1/96
TO TO TO TO
12/31/97 6/30/97 12/31/97 6/30/97
-------- ------- -------- -------
OPERATIONS:
<S> <C> <C> <C> <C>
Net investment income $ 285 $ 969 $ 1,335 $ 3,139
Net realized gain on investments, forward foreign currency contracts and foreign
currency 1,974 5,290 3,960 7,717
Net unrealized appreciation on investments, forward foreign currency contracts
and translation of assets and liabilites in foreign currencies (10,192) 15,689 3,388 6,601
-------- -------- -------- --------
Net increase (decrease) in net assets resulting from operations (7,933) 21,948 8,683 17,457
-------- -------- -------- --------
DIVIDENDS DISTRIBUTED FROM:
Net investment income:
Class Y (1,958) (3,802) (1,280) (3,056)
Class A (22) (53) (48) (92)
Class B -- -- (2) --
Net realized gains:
Class Y (6,263) (8,375) (6,356) (5,885)
Class A (93) (130) (282) (184)
Class B (1) -- (28) --
-------- -------- -------- --------
Total dividends distributed (8,337) (12,360) (7,996) (9,217)
-------- -------- -------- --------
CAPITAL TRANSACTIONS (1):
Class Y:
Proceeds from shares issued 43,065 34,899 11,645 --
Reinvestment of cash distributions 7,249 11,015 6,080 --
Cost of shares redeemed (38,992) (31,528) (10,793) --
-------- -------- -------- --------
(Decrease) in net assets from Class Y transactions 11,322 14,386 6,932 --
-------- -------- -------- --------
Class A:
Proceeds from shares issued 358 489 1,546 23,565
Reinvestment of cash distributions 11 178 323 8,737
Cost of shares redeemed (238) (506) (519) (29,150)
-------- -------- -------- --------
Increase in net assets from Class A transactions 131 161 1,350 3,152
-------- -------- -------- --------
Class B:
Proceeds from shares issued 14 -- 568 1,285
Reinvestment of cash distributions 1 -- 30 293
Cost of shares redeemed -- -- -- (833)
-------- -------- -------- --------
Increase (decrease) in net assets from Class B transactions 15 -- 598 745
-------- -------- -------- --------
Increase in net assets derived from capital share transactions 11,468 14,547 8,880 3,897
-------- -------- -------- --------
Net increase (decrease) in net assets (4,802) 24,135 9,567 12,137
-------- -------- -------- --------
NET ASSETS:
Beginning of period 165,548 141,413 117,840 105,703
-------- -------- -------- --------
End of period $160,746 $165,548 $127,407 $117,840
======== ======== ======== ========
<FN>
AMOUNTS DESIGNATED AS "--" ARE EITHER $0 OR HAVE BEEN ROUNDED TO $0.
(1) FOR CAPITAL SHARE TRANSACTIONS PLEASE SEE FOOTNOTE 8 IN THE NOTES TO THE FINANCIAL STATEMENTS.
(2) THIS FUND WAS FORMERLY KNOWN AS THE EQUITY FUND.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
</FN>
</TABLE>
98 & 99
<PAGE>
STATEMENT
OF CHANGES
IN NET ASSETS [SQUARE BULLET] COREFUND
- --------------------------------------------------------------------------------
(000)
COREFUND FIXED INCOME FUNDS
AS OF
DECEMBER 31, 1997
(UNAUDITED)
<TABLE>
<CAPTION>
---------------- ----------------- ----------------
SHORT-
SHORT TERM INTERMEDIATE GOVERNMENT
INCOME FUND BOND FUND INCOME FUND
---------------- ----------------- ----------------
7/1/97 7/1/96 7/1/97 7/1/96 7/1/97 7/1/96
TO TO TO TO TO TO
12/31/97 6/30/97 12/31/97 6/30/97 12/31/97 6/30/97
-------- ------- -------- ------- -------- -------
OPERATIONS:
<S> <C> <C> <C> <C> <C> <C>
Net investment income $ 1,028 $ 1,757 $ 5,016 $ 10,074 $ 676 $ 1,293
Net realized gain (loss) on investments, forward foreign
currency contracts and foreign currency 8 (8) 461 (26) 88 (156)
Net unrealized appreciation (depreciation) on investments,
forward foreign currency contracts and translation of
assets and liabilites in foreign currencies 68 91 1,670 993 505 434
------- ------- -------- -------- ------- -------
Net increase in net assets resulting from operations 1,104 1,840 7,147 11,041 1,269 1,571
------- ------- -------- -------- ------- -------
DIVIDENDS DISTRIBUTED FROM:
Net investment income:
Class Y (1,015) (1,748) (4,933) (9,902) (624) (1,204)
Class A (13) (9) (77) (172) (51) (90)
Net realized gains:
Class Y -- -- -- -- -- --
Class A -- -- -- -- -- --
------- ------- -------- -------- ------- -------
Total dividends distributed (1,028) (1,757) (5,010) (10,074) (675) (1,294)
------- ------- -------- -------- ------- -------
CAPITAL TRANSACTIONS (1):
Class Y:
Proceeds from shares issued 6,147 16,475 20,016 45,113 3,060 8,152
Reinvestment of cash distributions 880 1,808 4,505 9,516 352 612
Cost of shares redeemed (6,908)(11,486) (19,785) (52,263) (1,936) (3,957)
------- ------- -------- -------- ------- -------
Increase (decrease) in net assets from Class Y
transactions 119 6,797 4,736 2,366 1,476 4,807
------- ------- -------- -------- ------- -------
Class A:
Proceeds from shares issued 63 483 289 391 308 579
Reinvestment of cash distributions 13 9 59 143 43 85
Cost of shares redeemed -- (1) (305) (865) (229) (311)
------- ------- -------- -------- ------- -------
Increase (decrease) in net assets from Class A
transactions 76 491 43 (331) 122 353
------- ------- -------- -------- ------- -------
Increase (decrease) in net assets derived from capital
share transactions 195 7,288 4,779 2,035 1,598 5,160
------- ------- -------- -------- ------- -------
Net increase (decrease) in net assets 271 7,371 6,916 3,002 2,192 5,437
------- ------- -------- -------- ------- -------
NET ASSETS:
Beginning of period 37,504 30,133 165,905 162,903 20,667 15,230
------- ------- -------- -------- ------- -------
End of period $37,775 $37,504 $172,821 $165,905 $22,859 $20,667
======= ======= ======== ======== ======= =======
----------------- ----------------- ------------------
INTERMEDIATE
BOND GLOBAL MUNICIPAL
FUND BOND FUND BOND FUND
----------------- ----------------- ------------------
7/1/97 7/1/96 7/1/97 7/1/96 7/1/97 7/1/96
TO TO TO TO TO TO
12/31/97 6/30/97 12/31/97 6/30/97 12/31/97 6/30/97
-------- ------- -------- ------- -------- -------
OPERATIONS:
<S> <C> <C> <C> <C> <C> <C>
Net investment income $ 5,627 $ 12,245 $ 931 $ 1,774 $ 39 $ 71
Net realized gain (loss) on investments, forward foreign
currency contracts and foreign currency 1,499 (735) 9 423 3 (6)
Net unrealized appreciation (depreciation) on investments,
forward foreign currency contracts and translation of
assets and liabilites in foreign currencies 3,530 2,749 (188) (149) 35 25
-------- -------- ------- ------- ------- -------
Net increase in net assets resulting from operations 10,656 14,259 753 2,048 77 90
-------- -------- ------- ------- ------- -------
DIVIDENDS DISTRIBUTED FROM:
Net investment income:
Class Y (5,574) (12,161) (1,509) (2,621) (20) (34)
Class A (53) (84) (10) (13) (19) (37)
Net realized gains:
Class Y -- -- -- -- -- --
Class A -- -- -- -- -- --
-------- -------- ------- ------- ------- -------
Total dividends distributed (5,627) (12,245) (1,519) (2,634) (39) (71)
-------- -------- ------- ------- ------- -------
CAPITAL TRANSACTIONS (1):
Class Y:
Proceeds from shares issued 11,940 18,942 911 107 34 841
Reinvestment of cash distributions 5,007 12,215 1,285 2,670 7 12
Cost of shares redeemed (30,726) (49,397) (400) (602) (147) (269)
-------- -------- ------- ------- ------- -------
Increase (decrease) in net assets from Class Y transactions (13,779) (18,240) 1,796 2,175 (106) 584
-------- -------- ------- ------- ------- -------
Class A:
Proceeds from shares issued 427 579 69 31 66 80
Reinvestment of cash distributions 46 78 10 15 17 37
Cost of shares redeemed (117) (323) (10) (13) (95) (186)
-------- -------- ------- ------- ------- -------
Increase (decrease) in net assets from Class A transactions 356 334 69 33 (12) (69)
-------- -------- ------- ------- ------- -------
Increase (decrease) in net assets derived from capital
share transactions (13,423) (17,906) 1,865 2,208 (118) 515
-------- -------- ------- ------- ------- -------
Net increase (decrease) in net assets (8,394) (15,892) 1,099 1,622 (80) 534
-------- -------- ------- ------- ------- -------
NET ASSETS:
Beginning of period 183,986 199,878 34,772 33,150 1,952 1,418
-------- -------- ------- ------- ------- -------
End of period $175,592 $183,986 $35,871 $34,772 $ 1,872 $ 1,952
======== ======== ======= ======= ======= =======
------------------ -----------------
PENNSYLVANIA NEW JERSEY
MUNICIPAL MUNICIPAL
BOND FUND BOND FUND
------------------ -----------------
7/1/97 7/1/96 7/1/97 7/1/96
TO TO TO TO
12/31/97 6/30/97 12/31/97 6/30/97
-------- ------- -------- -------
OPERATIONS:
<S> <C> <C> <C> <C>
Net investment income $ 366 $ 583 $ 51 $ 81
Net realized gain (loss) on investments, forward foreign
currency contracts and foreign currency 40 20 (1) (3)
Net unrealized appreciation (depreciation) on investments,
forward foreign currency contracts and translation of
assets and liabilites in foreign currencies 378 240 57 24
------- ------- ------- -------
Net increase in net assets resulting from operations 784 843 107 102
------- ------- ------- -------
DIVIDENDS DISTRIBUTED FROM:
Net investment income:
Class Y (290) (521) (40) (65)
Class A (76) (62) (11) (16)
Net realized gains:
Class Y -- -- -- (8)
Class A -- -- -- (2)
------- ------- ------- -------
Total dividends distributed (366) (583) (51) (91)
------- ------- ------- -------
CAPITAL TRANSACTIONS (1):
Class Y:
Proceeds from shares issued 2,871 3,530 172 525
Reinvestment of cash distributions 126 297 14 14
Cost of shares redeemed (586) (2,772) (102) (388)
------- ------- ------- -------
Increase (decrease) in net assets from Class Y transactions 2,411 1,055 84 151
------- ------- ------- -------
Class A:
Proceeds from shares issued 2,567 1,341 168 99
Reinvestment of cash distributions 64 56 9 15
Cost of shares redeemed (133) (420) (72) (22)
------- ------- ------- -------
Increase (decrease) in net assets from Class A transactions 2,498 977 105 92
------- ------- ------- -------
Increase (decrease) in net assets derived from capital
share transactions 4,909 2,032 189 243
------- ------- ------- -------
Net increase (decrease) in net assets 5,327 2,292 245 254
------- ------- ------- -------
NET ASSETS:
Beginning of period 12,175 9,883 1,875 1,621
------- ------- ------- -------
End of period $17,502 $12,175 $ 2,120 $ 1,875
======= ======= ======= =======
<FN>
AMOUNTS DESIGNATED AS "--" ARE EITHER $0 OR HAVE BEEN ROUNDED TO $0.
(1) FOR CAPITAL SHARE TRANSACTIONS PLEASE SEE FOOTNOTE 8 IN THE NOTES TO THE
FINANCIAL STATEMENTS.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
</FN>
</TABLE>
100 & 101
<PAGE>
STATEMENT
OF CHANGES
IN NET ASSETS [SQUARE BULLET] COREFUND
- --------------------------------------------------------------------------------
(000)
COREFUND MONEY MARKET FUNDS
AS OF
DECEMBER 31, 1997
(UNAUDITED)
<TABLE>
<CAPTION>
------------------- ------------------- ------------------
TREASURY CASH TAX-FREE
RESERVE RESERVE RESERVE
------------------- ------------------- ------------------
7/1/97 7/1/96 7/1/97 7/1/96 7/1/97 7/1/96
TO TO TO TO TO TO
12/31/97 6/30/97 12/31/97 6/30/97 12/31/97 6/30/97
-------- ------- -------- ------- -------- -------
OPERATIONS:
<S> <C> <C> <C> <C> <C> <C>
Net investment income $ 22,445 $ 43,860 $ 24,956 $ 44,127 $ 2,337 $ 3,787
Net realized gain (loss) on securities transactions 14 8 5 1 -- (1)
---------- ---------- ---------- ---------- -------- ---------
Net increase in net assets resulting from operations 22,459 43,868 24,961 44,128 2,337 3,786
---------- ---------- ---------- ---------- -------- ---------
DIVIDENDS DISTRIBUTED FROM:
Net investment income:
Class Y (22,007) (43,173) (23,686) (43,042) (2,224) (3,677)
Class C (438) (687) (1,270) (1,085) (135) (86)
---------- ---------- ---------- ---------- -------- ---------
Total dividends distributed (22,445) (43,860) (24,956) (44,127) (2,359) (3,763)
---------- ---------- ---------- ---------- -------- ---------
CAPITAL SHARE TRANSACTIONS:
Class Y
Proceeds from shares issued 1,198,732 2,548,964 1,003,078 2,154,887 170,940 392,069
Reinvestment of cash distributions 1,462 4,246 1,865 3,136 96 229
Cost of shares redeemed (1,228,616) (2,610,396) (961,599) (2,061,985) (137,772) (376,938)
---------- ---------- ---------- ---------- -------- ---------
Increase (decrease) in net assets from Class Y
transactions (28,422) (57,186) 70,344 96,038 33,264 15,360
---------- ---------- ---------- ---------- -------- ---------
Class C
Proceeds from shares issued 34,333 12,429 107,066 44,890 24,342 3,779
Reinvestment of cash distributions 272 264 1,229 1,023 132 79
Cost of shares redeemed (22,458) (19,933) (56,508) (37,956) (15,279) (3,506)
---------- ---------- ---------- ---------- -------- ---------
Increase (decrease) in net assets from Class C
transactions 12,147 (7,240) 51,787 7,957 9,195 352
---------- ---------- ---------- ---------- -------- ---------
Class B
Proceeds from shares issued -- -- 88 -- -- --
Reinvestment of cash distributions -- -- -- -- -- --
Cost of shares redeemed -- -- (8) -- -- --
---------- ---------- ---------- ---------- -------- ---------
Increase in net assets from Class B
transactions -- -- 80 -- -- --
---------- ---------- ---------- ---------- -------- ---------
Increase (decrease) in net assets derived from
capital share transactions 16,275 (64,426) 122,211 103,995 42,459 15,712
---------- ---------- ---------- ---------- -------- ---------
Net (decrease) increase in net assets 16,261 (64,418) 122,216 103,996 42,437 15,735
---------- ---------- ---------- ---------- -------- ---------
NET ASSETS:
Beginning of period 847,530 911,948 913,944 809,948 122,781 107,046
---------- ---------- ---------- ---------- -------- ---------
End of period $ 831,269 $ 847,530 $1,036,160 $ 913,944 $165,218 $ 122,781
========== ========== ========== ========== ======== =========
<FN>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
</FN>
</TABLE>
102
<PAGE>
[This page intentionally left blank.]
<PAGE>
FINANCIAL
HIGHLIGHTS
- --------------------------------------------------------------------------------
COREFUND EQUITY FUNDS
AS OF
DECEMBER 31, 1997
(UNAUDITED)
For a Share Outstanding Throughout the Period
<TABLE>
<CAPTION>
NET
NET ASSET NET REALIZED AND DISTRIBUTIONS DISTRIBUTIONS NET ASSETS RATIO
VALUE INVESTMENT UNREALIZED FROM NET FROM ASSET VALUE END OF EXPENSES
BEGINNING INCOME GAINS OR (LOSSES) INVESTMENT CAPITAL END TOTAL OF PERIOD TO AVERAGE
OF PERIOD (LOSS) ON SECURITIES INCOME GAINS OF PERIOD RETURN8 (000) NET ASSETS
--------- ---------- ---------------- ------------- ------------- ----------- ------- --------- -----------
- -----------------
EQUITY INDEX FUND
- -----------------
CLASS Y**
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1997(A) $37.39 $ 0.26 $ 3.50 $(0.26) $(1.24) $39.65 10.12%+ $262,831 0.37%
1997 28.47 0.51 9.16 (0.51) (0.24) 37.39 34.44 241,413 0.37
1996 23.79 0.51 5.47 (0.51) (0.79) 28.47 25.69 166,350 0.35
1995 20.54 0.52 4.24 (0.52) (0.99) 23.79 24.45 112,533 0.37
1994 20.97 0.55 (0.43) (0.55) -- 20.54 0.55 72,552 0.35
1993 19.22 0.52 1.84 (0.52) (0.09) 20.97 12.39 50,551 0.49
1992 18.46 0.52 1.80 (0.48) (1.08) 19.22 12.59 20,166 0.57
19911 19.48 0.03 (0.94) (0.02) (0.09) 18.46 (4.64)+ 12,117 0.97
CLASS A
1997(A) $37.37 $ 0.26 $ 3.51 $(0.24) $(1.24) $39.66 2.74%+ $ 9,113 0.37%
1997(10) 29.62 0.32 8.05 (0.38) (0.24) 37.37 28.58+ 4,507 0.37
CLASS B
1997(A)(12) $39.16 $ 0.16 $ 1.27 $(0.23) $(1.24) $39.12 3.37%+ $ 742 1.37%
- -------------------
CORE EQUITY FUND(9)
- -------------------
CLASS Y*
1997(A) $21.11 $ -- $ 2.41 $ -- $(2.92) $20.60 11.87%+ $557,593 0.99%
1997 17.26 0.12 5.32 (0.12) (1.47) 21.11 33.10 515,015 0.98
1996 17.07 0.14 1.49 (0.14) (1.30) 17.26 19.24 414,824 0.97
INSTITUTIONAL CLASS*
1995 $15.00 $ 0.19 $ 2.87 $(0.19) $(0.80) $17.07 22.00% $378,352 1.05%
CLASS A*
1997(A) $21.13 $ -- $ 2.40 $ -- $(2.92) $20.61 11.70%+ $ 19,043 1.24%
1997 17.28 0.07 5.32 (0.07) (1.47) 21.13 32.74 16,043 1.23
1996 17.08 0.12 1.49 (0.11) (1.30) 17.28 19.11 11,178 1.22
RETAIL CLASS*
1995 $15.00 $ 0.18 $ 2.87 $(0.17) $(0.80) $17.08 21.94% $ 6,591 1.34%
PRIOR CLASS
1994 $15.39 $ 0.11 $ 0.22 $(0.11) $(0.61) $15.00 2.21% $ 50,128 1.49%
1993 13.93 0.14 1.89 (0.14) (0.43) 15.39 14.90 45,677 1.20
1992 13.08 0.19 1.02 (0.19) (0.17) 13.93 9.27 28,103 0.92
1991 8.95 0.26 4.13 (0.26) -- 13.08 49.37 12,830 0.54
1990(2) 10.00 0.14 (1.05) (0.14) -- 8.95 (9.22) 5,982 0.65
CLASS B
1997(A)(12) $23.05 $(4.44) $ 2.62 $ -- $(2.92) $18.31 (7.39)%+$ 133 1.99%
- ------------------
GROWTH EQUITY FUND
- ------------------
CLASS Y**
1997(A) $15.43 $ 0.01 $ 2.16 $ -- $(1.24) $16.33 14.11%+ $162,698 0.96%
1997 14.19 0.04 2.81 (0.04) (1.57) 15.43 21.67 147,700 0.96
1996 11.18 0.08 3.36 (0.08) (0.35) 14.19 31.36 120,073 0.89
1995 9.11 0.08 2.07 (0.08) -- 11.18 23.71 91,345 0.76
1994 9.95 0.05 (0.84) (0.05) -- 9.11 (8.01) 64,877 0.69
1993 8.74 0.08 1.21 (0.08) -- 9.95 14.76 63,777 0.43
19923 10.00 0.05 (1.26) (0.05) -- 8.74 (12.05)+ 33,418 0.14
CLASS A**
1997(A) $15.39 $(0.03) $ 2.15 $ -- $(1.24) $16.27 14.02%+ $ 5,699 1.21%
1997 14.17 0.01 2.79 (0.01) (1.57) 15.39 21.29 4,693 1.21
1996 11.17 0.05 3.35 (0.05) (0.35) 14.17 31.00 3,162 1.14
1995 9.10 0.06 2.07 (0.06) -- 11.17 23.44 2,043 1.01
1994 9.95 0.04 (0.85) (0.04) -- 9.10 (8.13) 1,730 0.94
19934 9.80 0.03 0.15 (0.03) -- 9.95 1.80+ 5,224 0.80
CLASS B
1997(A)(13) $17.32 $(0.02) $ 0.13 $ -- $(1.24) $16.19 0.85%+ $ 101 1.96%
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*** RATE11
---------- ----------- ------------ --------- ------
- -----------------
EQUITY INDEX FUND
- -----------------
CLASS Y*
<S> <C> <C> <C> <C> <C>
1997(A) 1.30% 0.71% 0.96% 9% $0.0621
1997 1.63 0.71 1.29 11 0.0639
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
1997(A) 1.05% 0.71% 0.71% 9% $0.0621
1997(10) 1.51 0.69 1.19 11 0.0639
CLASS B
1997(A)(12) 0.30% 1.71% (0.04)% 9% $0.0621
- -------------------
CORE EQUITY FUND(9)
- -------------------
CLASS Y*
1997(A) 0.21% 1.05% 0.15% 23% $0.0658
1997 0.63 1.03 0.58 79 0.0624
1996 1.15 1.01 1.11 114 0.0636
INSTITUTIONAL CLASS*
1995 1.44% 1.10% 1.44% 119% N/A
CLASS A*
1997(A) (0.04)% 1.30% (0.10)% 23% $0.0658
1997 0.38 1.28 0.33 79 0.0624
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
CLASS B
1997(A)(12) (0.79)% 2.30% (1.10)% 23% $0.0658
- ------------------
GROWTH EQUITY FUND
- ------------------
CLASS Y*
1997(A) (0.15)% 1.05% (0.24)% 41% $0.0602
1997 0.30 1.06 0.20 74 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
19923 1.38 1.12 0.40 66 N/A
CLASS A*
1997(A) (0.40)% 1.30% (0.49)% 41% $0.0602
1997 0.04 1.31 (0.06) 74 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
19934 0.39 1.48 (0.29) 103 N/A
CLASS B
1997(A)(12) (1.15)% 2.05% (1.24)% 41% $0.0602
<FN>
AMOUNTS DESIGNATED AS "--" ARE EITHER $0 OR HAVE BEEN ROUNDED TO $0.
* ON FEBRUARY 21, 1995, THE SHARES OF THE FUNDS WERE REDESIGNED AS EITHER RETAIL OR INSTITUTIONAL SHARES. ON THAT DATE,
THE FUND'S NET INVESTMENT INCOME, EXPENSES AND DISTRIBUTIONS FOR THE PERIOD NOVEMBER 1, 1994 THROUGH FEBRUARY 20, 1995
WERE ALLOCATED TO EACH CLASS OF SHARES. THE BASIS FOR THE ALLOCATION WAS THE RELATIVE NET ASSETS OF EACH CLASS OF
SHARES AS OF FEBRUARY 21, 1995. THE RESULTS WERE COMBINED WITH THE RESULTS OF OPERATIONS AND DISTRIBUTIONS FOR EACH
APPLICABLE CLASS FOR THE PERIOD FEBRUARY 21, 1995 THROUGH OCTOBER 31, 1995. FOR THE YEAR ENDED OCTOBER 31, 1995, THE
FINANCIAL HIGHLIGHTS' RATIOS OF EXPENSES, NET INVESTMENT INCOME, TOTAL RETURN, AND THE PER SHARE INVESTMENT ACTIVITIES
AND DISTRIBUTIONS REFLECT THIS ALLOCATION. ADDITIONALLY, ON APRIL 15 & 22, 1996 THE CONESTOGA EQUITY AND SPECIAL EQUITY
FUNDS WERE ACQUIRED BY COREFUNDS, INC.; AT WHICH TIME THE INSTITUTIONAL CLASS OF SHARES OF THESE FUNDS WERE EXCHANGED
FOR CLASS Y SHARES AND THE RETAIL CLASS OF SHARES OF THESE FUNDS WERE EXCHANGED FOR CLASS A SHARES.
** ON APRIL 22, 1996 THE SERIES A SHARES OF EACH FUND, EXCLUDING THE SPECIAL EQUITY FUND, WERE REDESIGNATED CLASS Y AND THE
SERIES B SHARES OF EACH FUND WERE REDESIGNATED CLASS A.
***FOR THE YEAR ENDED JUNE 30, 1996, TRANSACTIONS RELATING TO THE MERGER WERE EXCLUDED FROM THE CALCULATION OF THE
PORTFOLIO TURNOVER RATE.
+ THIS FIGURE HAS NOT BEEN ANNUALIZED.
(A)RATIOS FOR THIS SIX-MONTH PERIOD ENDED DECEMBER 31, 1997, 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.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
</FN>
</TABLE>
104
<PAGE>
[SQUARE BULLET] COREFUND
- --------------------------------------------------------------------------------
For a Share Outstanding Throughout the Period
<TABLE>
<CAPTION>
NET
NET ASSET NET REALIZED AND DISTRIBUTIONS DISTRIBUTIONS NET ASSETS RATIO
VALUE INVESTMENT UNREALIZED FROM NET FROM ASSET VALUE END OF EXPENSES
BEGINNING INCOME GAINS OR (LOSSES) INVESTMENT CAPITAL END TOTAL OF PERIOD TO AVERAGE
OF PERIOD (LOSS) ON SECURITIES INCOME GAINS OF PERIOD RETURN8 (000) NET ASSETS
--------- ---------- ---------------- ------------- ------------- ----------- ------- --------- -----------
- ----------------------
SPECIAL EQUITY FUND(9)
- ----------------------
CLASS Y*
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1997(A) $11.27 $(0.03) $ 0.90 $ -- $(1.49) $10.65 8.14%+ $74,025 1.07%
1997 11.86 0.02 1.81 (0.03) (2.39) 11.27 17.94 71,980 0.84
1996 11.42 0.07 2.13 (0.07) (1.69) 11.86 22.27 63,680 0.34
INSTITUTIONAL CLASS*
1995 $ 9.37 $ 0.12 $ 2.12 $(0.12) $(0.07) $11.42 24.44% $57,396 0.32%
CLASS A*
1997(A) $11.25 $(0.03) $ 0.87 $ -- $(1.49) $10.60 7.88%+ $ 2,858 1.32%
1997 11.85 -- 1.81 (0.02) (2.39) 11.25 17.73 2,347 1.14
1996 11.42 0.08 2.11 (0.07) (1.69) 11.85 22.14 1,144 0.37
RETAIL CLASS*
1995 $ 9.37 $ 0.12 $ 2.12 $(0.12) $(0.07) $11.42 24.44% $ 734 0.27%
PRIOR CLASS
19945 $10.00 $ 0.06 $(0.63) $(0.06) $ -- $ 9.37 (5.72)% $10,069 0.15%
CLASS B
1997(A)(12) $12.80 $(0.01) $(0.82) $ -- $(1.49) $10.48 (6.13)+% $ 122 2.07%
- --------------------------
INTERNATIONAL GROWTH FUND
- --------------------------
CLASS Y**
1997(A) $14.72 $0.01 $(0.73) $(0.17) $(0.55) $13.28 (4.89)%+ $158,408 0.95%
1997 13.97 0.14 1.84 (0.37) (0.86) 14.72 15.43 163,117 1.20
1996 12.29 0.16 1.86 (0.28) (0.06) 13.97 16.72 139,275 1.14
1995 13.18 0.12 (0.17) (0.04) (0.80) 12.29 (0.21) 110,838 1.05
1994 11.71 0.12 1.78 (0.12) (0.31) 13.18 16.28 108,911 0.99
1993 10.52 0.10 1.16 (0.07) -- 11.71 12.06 61,655 0.99
1992 10.10 0.17 0.31 -- (0.06) 10.52 4.90 42,594 0.96
1991 10.75 0.19 (0.44) (0.27) (0.13) 10.10 (2.71) 20,582 0.99
19906 10.00 0.11 0.86 (0.09) (0.13) 10.75 9.74+ 13,513 1.22
CLASS A**
1997(A) $14.70 $(0.01) $(0.73) $(0.13) $(0.55) $13.28 (4.98)%+ $ 2,324 1.20%
1997 13.96 0.09 1.85 (0.34) (0.86) 14.70 15.09 2,431 1.45
1996 12.27 0.11 1.89 (0.25) (0.06) 13.96 16.54 2,138 1.39
1995 13.17 0.09 (0.17) (0.02) (0.80) 12.27 (0.48) 1,943 1.30
1994 11.71 0.06 1.82 (0.11) (0.31) 13.17 16.08 2,019 1.24
19934 10.07 0.05 1.59 -- -- 11.71 16.29+ 344 1.15
CLASS B
1997(A)(15) $13.79 $(0.02) $ 0.22 $(0.16) $(0.55) $13.28 1.46%+ $ 14 2.16%
- --------------
BALANCED FUND
- --------------
CLASS Y**
1997(A) $13.52 $0.15 $ 0.83 $(0.15) $(0.75) $13.60 7.31%+ $121,302 0.82%
1997 12.59 0.36 1.61 (0.36) (0.68) 13.52 16.44 113,642 0.78
1996 11.06 0.33 1.68 (0.33) (0.15) 12.59 18.41 102,515 0.81
1995 9.88 0.35 1.21 (0.35) (0.03) 11.06 16.21 61,092 0.73
1994 10.39 0.35 (0.51) (0.35) -- 9.88 (1.62) 42,429 0.62
19934 10.00 0.16 0.39 (0.16) -- 10.39 5.52+ 29,434 0.45
CLASS A**
1997(A) $13.52 $0.12 $ 0.84 $(0.13) $(0.75) $13.60 7.19%+ $ 5,532 1.07%
1997 12.59 0.32 1.61 (0.32) (0.68) 13.52 16.15 4,198 1.03
1996 11.06 0.30 1.68 (0.30) (0.15) 12.59 18.13 3,188 1.06
1995 9.89 0.34 1.19 (0.33) (0.03) 11.06 15.84 2,344 0.98
1994 10.38 0.31 (0.49) (0.31) -- 9.89 (1.86) 2,222 0.87
19937 10.00 0.16 0.38 (0.16) -- 10.38 2.50+ 701 0.55
CLASS B
1997(A)(14) $14.39 $0.09 $(0.09) $ 0.13 $(0.75) $13.51 (0.45)%+ $ 573 1.82%
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*** RATE11
---------- ----------- ------------ --------- ------
- -----------
SPECIAL EQU
- -----------
CLASS Y*
<S> <C> <C> <C> <C> <C>
1997(A) (0.44)% 1.81% (1.18)% 32% $0.0628
1997 0.19 1.82 (0.79) 74 $0.0581
1996 0.94 1.79 (0.51) 72 0.0539
INSTITUTIONAL CLASS*
1995 1.14% 1.97% (0.51)% 129% N/A
CLASS A*
1997(A) (0.69)% 2.06% (1.43)% 32% $0.0628
1997 (0.12) 2.07 (1.05) 74 $0.0581
1996 0.91 1.82 (0.55) 72 0.0539
RETAIL CLASS*
1995 1.29% 2.24% (0.68)% 129% N/A
PRIOR CLASS
19945 1.06% 2.10% (0.89)% 39% N/A
CLASS B
1997(A)(12) (1.44)% 2.81% (2.18)% 32% $0.0628
- ------------------------------
INTERNATIONATIONAL GROWTH FUND
- ------------------------------
CLASS Y**
1997(A) 0.47% 1.04% 0.38% 25% $0.0024
1997 0.82 1.29 0.73 59 0.0080
1996 1.05 1.25 0.94 41 0.0270
1995 0.98 1.19 0.84 59 N/A
1994 0.23 1.18 0.04 67 N/A
1993 1.22 1.28 0.93 59 N/A
1992 1.67 1.40 1.23 87 N/A
1991 1.80 1.56 1.23 49 N/A
19906 2.57 1.99 1.80 20 N/A
CLASS A**
1997(A) 0.23% 1.29% 0.14% 25% $0.0024
1997 0.57 1.54 0.48 59 0.0080
1996 0.80 1.50 0.69 41 0.0270
1995 0.73 1.44 0.59 59 N/A
1994 0.05 1.43 (0.14) 67 N/A
19934 1.51 1.44 1.22 59 N/A
CLASS B
1997(A)(15) (1.15)% 2.23% (1.22%) 25% $0.0024
- -------------
BALANCED FUND
- -------------
CLASS Y**
1997(A) 2.12% 1.03% 1.91% 30% $0.0601
1997 2.79 1.00 2.57 54 0.0600
1996 2.79 1.03 2.57 74 0.0621
1995 3.51 1.07 3.17 46 N/A
1994 3.46 1.08 3.00 56 N/A
19934 3.38 1.39 2.45 21 N/A
CLASS A**
1997(A) 1.87% 1.28% 1.66% 30% $0.0601
1997 2.54 1.25 2.32 54 0.0600
1996 2.53 1.27 2.32 74 0.0621
1995 3.27 1.32 2.93 46 N/A
1994 3.21 1.33 2.75 56 N/A
19937 5.76 1.48 4.83 21 N/A
CLASS B
1997(A)(14) (1.12)% 2.03% 0.91% 30% $0.0601
<FN>
AMOUNTS DESIGNATED AS "--" ARE EITHER $0 OR HAVE BEEN ROUNDED TO $0.
5 COMMENCED OPERATIONS MARCH 15, 1994. UNLESS OTHERWISE NOTED, ALL RATIOS FOR
THE PERIOD HAVE BEEN ANNUALIZED.
6 COMMENCED OPERATIONS FEBRUARY 12, 1990. UNLESS OTHERWISE NOTED, ALL RATIOS FOR THE PERIOD HAVE BEEN ANNUALIZED.
7 COMMENCED OPERATIONS MARCH 16, 1993. UNLESS OTHERWISE NOTED, ALL RATIOS FOR THE PERIOD HAVE BEEN ANNUALIZED.
8 TOTAL RETURN DOES NOT REFLECT APPLICABLE SALES LOAD. ADDITIONALLY TOTAL RETURN FOR CLASS Y & CLASS A FOR THE CORE
EQUITY & SPECIAL EQUITY FUNDS FOR 1996 ARE FOR AN EIGHT MONTH PERIOD ENDED JUNE 30, 1997.
9 THE PER SHARE AMOUNT FOR THESE FUNDS FOR THE YEAR ENDED JUNE 30, 1996 REPRESENTS THE PERIOD FROM NOVEMBER 1, 1995 TO
JUNE 30, 1996. ALL PRIOR YEARS ARE FOR THE PERIODS NOVEMBER 1 TO OCTOBER 31.
10 COMMENCED OPERATIONS ON OCTOBER 9, 1996. UNLESS OTHERWISE NOTED, ALL RATIOS FOR THE PERIOD HAVE BEEN ANNUALIZED.
11 AVERAGE COMMISSION RATE PAID PER SHARE FOR SECURITY PURCHASES AND SALES DURING
THE PERIOD. PRESENTATION OF THE RATE IS ONLY REQUIRED FOR FISCAL YEARS BEGINNING AFTER SEPTEMBER 1, 1995.
12 COMMENCED OPERATIONS ON NOVEMBER 7, 1997. UNLESS OTHERWISE NOTED, ALL RATIOS FOR THE PERIOD HAVE BEEN ANNUALIZED.
13 COMMENCED OPERATIONS ON NOVEMBER 18, 1997. UNLESS OTHERWISE NOTED, ALL RATIOS FOR THE PERIOD HAVE BEEN ANNUALIZED.
14 COMMENCED OPERATIONS ON NOVEMBER 5, 1997. UNLESS OTHERWISE NOTED, ALL RATIOS FOR THE PERIOD HAVE BEEN ANNUALIZED.
15 COMMENCED OPERATIONS ON NOVEMBER 24, 1997. UNLESS OTHERWISE NOTED, ALL RATIOS FOR THE PERIOD HAVE BEEN ANNUALIZED.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
</FN>
</TABLE>
105
<PAGE>
FINANCIAL
HIGHLIGHTS
- --------------------------------------------------------------------------------
COREFUND FIXED INCOME FUNDS
AS OF
DECEMBER 31, 1997
(UNAUDITED)
For a Share Outstanding Throughout the Period
<TABLE>
<CAPTION>
NET NET
ASSET REALIZED AND DISTRIBUTIONS DISTRIBUTIONS NET ASSETS RATIO
VALUE NET UNREALIZED FROM NET FROM ASSET VALUE END OF EXPENSES
BEGINNING INVESTMENT GAINS OR (LOSSES) INVESTMENT CAPITAL END TOTAL OF PERIOD TO AVERAGE
OF PERIOD INCOME ON SECURITIES INCOME GAINS OF PERIOD RETURN10 (000) NET ASSETS
--------- ---------- ---------------- ------------- ------------- ----------- ------- --------- -----------
- -------------------------
SHORT TERM INCOME FUND11
- -------------------------
CLASS Y*
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1997(A) $ 9.97 $0.28 $ 0.02 $(0.28) $ -- $ 9.99 3.00%+ $ 37,203 0.49%
1997 9.94 0.53 0.03 (0.53) -- 9.97 5.82 37,011 0.47
1996 10.05 0.36 (0.08) (0.38) (0.01) 9.94 2.78 30,132 0.51
INSTITUTIONAL CLASS*
19951 $10.00 $0.25 $ 0.03 $(0.23) $ -- $10.05 2.57%+ $ 36,059 0.63%
CLASS A*
1997(A) $ 9.96 $0.26 $ 0.02 $(0.26) $ -- $ 9.98 2.87%+ $ 570 0.74%
1997 9.93 0.51 0.03 (0.51) -- 9.96 5.59 493 0.73
1996 10.04 0.35 (0.10) (0.35) (0.01) 9.93 2.55 1 0.76
RETAIL CLASS*
19952 $10.01 $0.23 $0.02 $(0.22) $ -- $10.04 2.87%+ $ 11 0.88%
- -----------------------------
SHORT-INTERMEDIATE BOND FUND
- -----------------------------
CLASS Y**
1997(A) $ 9.83 $0.29 $ 0.12 $(0.29) $ -- $ 9.95 4.25%+ $169,990 0.51%
1997 9.76 0.59 0.07 (0.59) -- 9.83 6.90 163,153 0.49
1996 9.84 0.57 (0.08) (0.57) -- 9.76 5.05 159,841 0.55
1995 9.63 0.53 0.21 (0.53) -- 9.84 8.22 55,128 0.60
1994 10.18 0.43 (0.53) (0.43) (0.02) 9.63 (0.32) 48,379 0.58
1993 10.01 0.47 0.31 (0.47) (0.14) 10.18 7.90 44,692 0.42
19923 10.00 0.23 0.01 (0.23) -- 10.01 2.49+ 22,623 0.11
CLASS A**
1997(A) $ 9.83 $0.28 $ 0.12 $(0.28) $ -- $ 9.95 4.14%+ $ 2,831 0.76%
1997 9.76 0.56 0.07 (0.56) -- 9.83 6.64 2,752 0.74
1996 9.84 0.54 (0.08) (0.54) -- 9.76 4.79 3,062 0.81
1995 9.63 0.54 0.20 (0.53) -- 9.84 7.95 1,961 0.85
1994 10.18 0.41 (0.53) (0.41) (0.02) 9.63 (0.56) 9,365 0.83
19934 10.01 0.20 0.17 (0.20) -- 10.18 3.95+ 5,752 0.75
- -----------------------
GOVERNMENT INCOME FUND
- -----------------------
CLASS Y**
1997(A) $ 9.76 $0.31 $ 0.27 $(0.31) $ -- $10.03 6.00%+ $ 21,032 0.73%
1997 9.62 0.62 0.14 (0.62) -- 9.76 8.15 19,007 0.70
1996 9.83 0.61 (0.21) (0.61) -- 9.62 4.09 13,943 0.64
1995 9.52 0.62 0.31 (0.62) -- 9.83 10.26 11,305 0.59
1994 10.18 0.50 (0.62) (0.50) (0.04) 9.52 (1.34) 9,089 0.50
19935 10.00 0.13 0.18 (0.13) -- 10.18 3.12+ 6,323 0.44
CLASS A**
1997(A) $ 9.76 $0.30 $ 0.27 $(0.30) $ -- $10.03 5.86%+ $ 1,827 0.98%
1997 9.62 0.60 0.14 (0.60) -- 9.76 7.88 1,660 0.95
1996 9.84 0.58 (0.22) (0.58) -- 9.62 3.73 1,287 0.88
1995 9.51 0.61 0.33 (0.61) -- 9.84 10.23 1,374 0.85
1994 10.17 0.47 (0.62) (0.47) (0.04) 9.51 (1.57) 1,536 0.75
19938 10.00 0.07 0.17 (0.07) -- 10.17 1.71+ 201 0.63
- ------------
BOND FUND11
- ------------
CLASS Y*
1997(A) $10.24 $0.32 $ 0.29 $(0.32) $ -- $10.53 6.06%+ $173,565 0.57%
1997 10.15 0.64 0.09 (0.64) -- 10.24 7.43 182,364 0.56
1996 10.55 0.43 (0.30) (0.45) (0.08) 10.15 1.23 198,605 0.55
INSTITUTIONAL CLASS*
1995 $ 9.81 $0.61 $ 0.71 $(0.58) $ -- $10.55 13.87% $194,442 0.71%
CLASS A*
1997(A) $10.24 $0.31 $ 0.29 $(0.31) $ -- $10.53 5.93%+ $ 2,027 0.82%
1997 10.15 0.62 0.09 (0.62) -- 10.24 7.15 1,622 0.81
1996 10.56 0.44 (0.33) (0.44) (0.08) 10.15 0.98 1,273 0.80
RETAIL CLASS*
1995 $ 9.81 $0.60 $ 0.72 $(0.57) $ -- $10.56 13.83% $ 1,373 0.97%
PRIOR CLASS
1994 $11.18 $0.53 $(1.04) $(0.52) $(0.34) $ 9.81 (4.75)% $ 23,377 1.01%
1993 10.89 0.56 0.54 (0.56) (0.25) 11.18 10.63 27,346 0.88
1992 10.65 0.70 0.32 (0.68) (0.10) 10.89 9.82 15,180 0.46
1991 9.96 0.78 0.69 (0.78) -- 10.65 15.16 7,255 0.47
19906 10.00 0.50 (0.04) (0.50) -- 9.96 4.64+ 4,593 0.68
RATIO RATIO OF NET
RATIO OF EXPENSES INCOME (LOSS)
OF NET TO AVERAGE TO AVERAGE
INCOME NET ASSETS NET ASSETS PORTFOLIO
TO AVERAGE (EXCLUDING (EXCLUDING TURNOVER
NET ASSETS WAIVERS) WAIVERS) RATE***
---------- ----------- ------------ ---------
- ------------------------
SHORT TERM INCOME FUND11
- ------------------------
CLASS Y*
<S> <C> <C> <C> <C>
1997(A) 5.48% 1.07% 4.90% 28%
1997 5.37 1.05 4.79 99
1996 5.31 1.03 4.79 102
INSTITUTIONAL CLASS*
19951 5.43% 1.08% 4.98% 40%
CLASS A*
1997(A) 5.23% 1.32% 4.65% 28%
1997 5.18 1.32 4.59 99
1996 5.05 1.25 4.56 102
RETAIL CLASS*
19952 5.05% 1.33% 4.60% 40%
- ----------------------------
SHORT-INTERMEDIATE BOND FUND
- ----------------------------
CLASS Y**
1997(A) 5.37% 0.80% 5.08% 66%
1997 5.98 0.80 5.67 158
1996 5.80 0.81 5.54 257
1995 5.76 0.84 5.52 405
1994 4.30 0.86 4.02 299
1993 4.62 0.86 4.18 188
19923 5.73 0.84 5.00 51
CLASS A**
1997(A) 4.88% 1.05% 4.59% 66%
1997 5.73 1.05 5.42 158
1996 5.51 1.06 5.27 257
1995 5.27 1.09 5.03 405
1994 4.05 1.11 3.77 299
19934 3.78 1.19 3.34 188
- ----------------------
GOVERNMENT INCOME FUND
- ----------------------
CLASS Y**
1997(A) 6.16% 0.83% 6.06% 18%
1997 6.40 0.85 6.25 120
1996 6.17 0.89 5.92 131
1995 6.53 0.98 6.14 368
1994 4.93 1.00 4.43 157
19935 5.41 1.10 4.75 93
CLASS A**
1997(A) 5.91% 1.08% 5.81% 18%
1997 6.15 1.10 6.00 120
1996 5.93 1.14 5.67 131
1995 6.25 1.24 5.86 368
1994 4.68 1.25 4.18 157
19938 5.35 1.29 4.69 93
- -----------
BOND FUND11
- -----------
CLASS Y*
1997(A) 6.11% 1.04% 5.64% 71%
1997 6.29 1.04 5.81 210
1996 6.28 0.97 5.86 190
INSTITUTIONAL CLASS*
1995 6.09% 1.12% 5.68% 352%
CLASS A*
1997(A) 5.86% 1.29% 5.39% 71%
1997 6.05 1.29 5.57 210
1996 6.02 1.22 5.61 190
RETAIL CLASS*
1995 6.02% 1.44% 5.55% 352%
PRIOR CLASS*
1994 5.07% 1.60% 4.48% 232%
1993 5.16 1.49 4.55 158
1992 6.78 1.24 6.01 99
1991 7.71 1.41 6.78 47
19906 7.75 1.62 6.81 23
<FN>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
</FN>
</TABLE>
106
<PAGE>
[SQUARE BULLET] COREFUND
- --------------------------------------------------------------------------------
For a Share Outstanding Throughout the Period
<TABLE>
<CAPTION>
NET
NET ASSET NET REALIZED AND DISTRIBUTIONS DISTRIBUTIONS NET ASSETS RATIO
VALUE NET UNREALIZED FROM NET FROM ASSET VALUE END OF EXPENSES
BEGINNING INVESTMENT GAINS OR (LOSSES) INVESTMENT CAPITAL END TOTAL OF PERIOD TO AVERAGE
OF PERIOD INCOME ON SECURITIES INCOME GAINS OF PERIOD RETURN10 (000) NET ASSETS
--------- ---------- ---------------- ------------- ------------- ----------- ------- --------- -----------
- ----------------
GLOBAL BOND FUND
- ----------------
CLASS Y**
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1997(A) $ 9.54 $0.37 $(0.17) $(0.41) $ -- $ 9.33 2.06%+ $ 35,625 0.68%
1997 9.70 0.49 0.09 (0.74) -- 9.54 6.18 34,590 0.85
1996 9.62 0.47 0.30 (0.69) -- 9.70 8.00 32,998 0.71
1995 9.06 0.62 0.24 (0.30) -- 9.62 9.70 26,898 0.64
19947 10.00 0.25 (1.15) (0.04) -- 9.06 (9.00)+ 24,957 0.73
CLASS A**
1997(A) $ 9.52 $0.29 $(0.10) $(0.39) $ -- $ 9.32 2.05%+ $ 246 0.93%
1997 9.68 0.42 0.14 (0.72) -- 9.52 5.92 182 1.10
1996 9.61 0.61 0.12 (0.66) -- 9.68 7.74 152 0.96
1995 9.04 0.61 0.24 (0.28) -- 9.61 9.57 170 0.89
19947 10.00 0.19 (1.11) (0.04) -- 9.04 (9.22)+ 167 0.98
- ---------------------------------
INTERMEDIATE MUNICIPAL BOND FUND
- ---------------------------------
CLASS Y**
1997(A) $10.05 $0.21 $ 0.20 $(0.21) $ -- $10.25 4.13%+ $ 906 0.56%
1997 9.92 0.42 0.13 (0.42) -- 10.05 5.62 993 0.55
1996 9.83 0.37 0.09 (0.37) -- 9.92 4.74 403 0.81
1995 9.68 0.38 0.15 (0.38) -- 9.83 5.58 365 0.82
1994 10.09 0.39 (0.41) (0.39) -- 9.68 (0.27) 1,088 0.63
19938 10.00 0.04 0.09 (0.04) -- 10.09 1.33+ 2,009 0.58
CLASS A**
1997(A) $10.05 $0.20 $ 0.20 $(0.20) $ -- $10.25 4.00%+ $ 966 0.81%
1997 9.92 0.39 0.13 (0.39) -- 10.05 5.36 959 0.80
1996 9.83 0.35 0.09 (0.35) -- 9.92 4.48 1,015 1.08
1995 9.67 0.35 0.16 (0.35) -- 9.83 5.42 1,027 1.08
1994 10.08 0.37 (0.41) (0.37) -- 9.67 (0.52) 1,311 0.88
19938 10.00 0.03 0.08 (0.03) -- 10.08 1.19+ 166 0.81
- ---------------------------------
PENNSYLVANIA MUNICIPAL BOND FUND
- ---------------------------------
CLASS Y**
1997(A) $10.47 $0.27 $ 0.30 $(0.27) $ -- $10.77 5.51%+ $ 12,912 0.08%
1997 10.22 0.54 0.25 (0.54) -- 10.47 7.92 10,171 0.08
1996 10.16 0.55 0.06 (0.55) -- 10.22 6.02 8,864 0.21
1995 9.95 0.51 0.21 (0.51) -- 10.16 7.50 2,272 0.39
19949 10.00 0.06 (0.05) (0.06) -- 9.95 0.14+ 434 0.42
CLASS A**
1997(A) $10.47 $0.26 $ 0.31 $(0.26) $ -- $10.78 5.47%+ $ 4,590 0.33%
1997 10.22 0.51 0.25 (0.51) -- 10.47 7.65 2,004 0.33
1996 10.16 0.52 0.06 (0.52) -- 10.22 5.76 994 0.46
1995 9.95 0.49 0.21 (0.49) -- 10.16 7.25 317 0.64
19949 10.00 0.06 (0.05) (0.06) -- 9.95 0.09+ 163 0.67
- -------------------------------
NEW JERSEY MUNICIPAL BOND FUND
- -------------------------------
CLASS Y**
1997(A) $10.16 $0.26 $ 0.30 $(0.26) $ -- $10.46 5.55%+ $ 1,605 0.11%
1997 10.08 0.51 0.15 (0.51) (0.07) 10.16 6.70 1,477 0.21
1996 10.12 0.51 0.02 (0.51) (0.06) 10.08 5.28 1,317 0.37
1995 9.94 0.52 0.18 (0.52) -- 10.12 7.25 1,550 0.42
19949 10.00 0.06 (0.06) (0.06) -- 9.94 0.01+ 1,432 0.43
CLASS A**
1997(A) $10.15 $0.25 $ 0.30 $(0.25) $ -- $10.45 5.42%+ $ 51 0.36%
1997 10.07 0.48 0.15 (0.48) (0.07) 10.15 6.44 398 0.45
1996 10.12 0.48 0.01 (0.48) (0.06) 10.07 4.93 304 0.60
1995 9.95 0.49 0.17 (0.49) -- 10.12 6.84 24 0.68
19949 10.00 0.06 (0.05) (0.06) -- 9.95 0.08+ 2 0.68
RATIO RATIO OF NET
RATIO OF EXPENSES INCOME
OF NET TO AVERAGE TO AVERAGE
INCOME NET ASSETS NET ASSETS PORTFOLIO
TO AVERAGE (EXCLUDING (EXCLUDING TURNOVER
NET ASSETS WAIVERS) WAIVERS) RATE***
---------- ----------- ------------ ---------
- -----------
GLOBAL BOND
- -----------
CLASS Y**
<S> <C> <C> <C> <C>
1997(A) 5.16% 0.87% 4.97% 7%
1997 5.14 1.03 4.96 90
1996 5.81 0.95 5.57 67
1995 6.84 1.03 6.45 133
19947 5.04 1.12 4.65 161
CLASS A**
1997(A) 4.91% 1.12% 4.72% 7%
1997 4.89 1.28 4.71 90
1996 5.56 1.20 5.32 67
1995 6.59 1.28 6.20 133
19947 4.79 1.37 4.40 161
- --------------------------------
INTERMEDIATE MUNICIPAL BOND FUND
- --------------------------------
CLASS Y**
1997(A) 4.07% 1.07% 3.56% 8%
1997 4.20 1.02 3.73 22
1996 3.73 1.31 3.23 10
1995 3.91 1.26 3.47 9
1994 3.91 1.17 3.37 43
19938 2.74 1.45 1.87 10
CLASS A**
1997(A) 3.87% 1.32% 3.36% 8%
1997 3.92 1.23 3.49 22
1996 3.47 1.61 2.94 10
1995 3.65 1.52 3.21 9
1994 3.66 1.42 3.12 43
19938 2.51 1.68 1.64 10
- --------------------------------
PENNSYLVANIA MUNICIPAL BOND FUND
- --------------------------------
CLASS Y**
1997(A) 4.99% 0.82% 4.25% 17%
1997 5.23 0.83 4.48 39
1996 5.25 0.96 4.50 92
1995 5.26 1.14 4.51 18
19949 5.09 1.17 4.34 3
CLASS A**
1997(A) 4.74% 1.07% 4.00% 17%
1997 4.99 1.08 4.24 39
1996 4.93 1.21 4.18 92
1995 4.95 1.39 4.20 18
19949 4.84 1.42 4.09 3
- ------------------------------
NEW JERSEY MUNICIPAL BOND FUND
- ------------------------------
CLASS Y**
1997(A) 4.96% 0.86% 4.21% 4%
1997 5.02 0.96 4.27 19
1996 4.93 1.12 4.18 21
1995 5.21 1.17 4.46 32
19949 5.07 1.35 4.15 13
CLASS A**
1997(A) 4.71% 1.11% 3.96% 4%
1997 4.81 1.20 4.06 19
1996 4.65 1.35 3.90 21
1995 4.97 1.44 4.21 32
19949 4.82 1.60 3.90 13
<FN>
AMOUNTS DESIGNATED AS "--" ARE EITHER $0 OR HAVE BEEN ROUNDED TO $0.
* ON FEBRUARY 21, 1995, THE SHARES OF THE FUNDS WERE REDESIGNED AS EITHER
RETAIL OR INSTITUTIONAL SHARES. ON THAT DATE, THE FUND'S NET INVESTMENT
INCOME, EXPENSES AND DISTRIBUTIONS FOR THE PERIOD NOVEMBER 1, 1994 THROUGH
FEBRUARY 20, 1995 WERE ALLOCATED TO EACH CLASS OF SHARES. THE BASIS FOR THE
ALLOCATION WAS THE RELATIVE NET ASSETS OF EACH CLASS OF SHARES AS OF FEBRUARY
21, 1995. THE RESULTS WERE COMBINED WITH THE RESULTS OF OPERATIONS AND
DISTRIBUTIONS FOR EACH APPLICABLE CLASS FOR THE PERIOD FEBRUARY 21, 1995
THROUGH OCTOBER 31, 1995. FOR THE YEAR ENDED OCTOBER 31, 1995, THE FINANCIAL
HIGHLIGHTS' RATIOS OF EXPENSES, NET INVESTMENT INCOME, TOTAL RETURN, AND THE
PER SHARE INVESTMENT ACTIVITIES AND DISTRIBUTIONS REFLECT THIS ALLOCATION.
ADDITIONALLY, ON APRIL 22, 1996 THE CONESTOGA SHORT-TERM INCOME AND BOND
FUNDS WERE ACQUIRED BY COREFUNDS, INC. AT WHICH TIME THE INSTITUTIONAL CLASS
OF SHARES OF THESE FUNDS WERE REDESIGNATED CLASS Y AND THE RETAIL CLASS OF
SHARES OF THESE FUNDS WERE REDESIGNATED CLASS A.
** ON APRIL 22, 1996 THE SERIES A SHARES OF EACH FUND, EXCLUDING THE SHORT TERM
INCOME AND BOND FUNDS, WERE REDESIGNATED CLASS Y AND THE SERIES B SHARES OF
EACH FUND, EXCLUDING THE SHORT TERM INCOME AND BOND FUNDS, WERE REDESIGNATED
CLASS A.
***FOR THE YEAR ENDED JUNE 30, 1996, TRANSACTIONS RELATING TO THE MERGER WERE
EXCLUDED FROM THE CALCULATION OF THE PORTFOLIO TURNOVER RATE.
+ THIS FIGURE HAS NOT BEEN ANNUALIZED.
(A)RATIOS FOR THIS SIX-MONTH PERIOD ENDED DECEMBER 31, 1997, 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.
</FN>
</TABLE>
107
<PAGE>
FINANCIAL
HIGHLIGHTS [SQUARE BULLET] COREFUND
- --------------------------------------------------------------------------------
COREFUND MONEY MARKET FUNDS
AS OF
DECEMBER 31, 1997
(UNAUDITED)
For a Share Outstanding Throughout the Period
<TABLE>
<CAPTION>
RATIO RATIO OF NET
NET RATIO OF EXPENSES INCOME
NET ASSET DISTRIBUTIONS NET ASSETS RATIO OF NET TO AVERAGE TO AVERAGE
VALUE NET FROM NET ASSET VALUE END OF EXPENSES INCOME NET ASSETS NET ASSETS
BEGINNING INVESTMENT INVESTMENT END TOTAL OF PERIOD TO AVERAGE TO AVERAGE (EXCLUDING (EXCLUDING
OF PERIOD INCOME INCOME OF PERIOD RETURN (000) NET ASSETS NET ASSETS WAIVERS) WAIVERS)
--------- ---------- --------------- ------------ -------- --------- ----------- ---------- ----------- ------------
- ----------------
TREASURY RESERVE
- ----------------
CLASS Y*
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1997(A) $1.00 $0.03 $(0.03) $1.00 2.57%+ $806,855 0.51% 5.05% 0.70% 4.86%
1997 1.00 0.05 (0.05) 1.00 4.97 835,384 0.51 4.86 0.71 4.66
1996 1.00 0.05 (0.05) 1.00 5.20 892,562 0.50 5.02 0.77 4.75
1995 1.00 0.05 (0.05) 1.00 4.98 479,206 0.48 4.91 0.85 4.54
1994 1.00 0.03 (0.03) 1.00 2.91 484,974 0.48 2.87 0.86 2.49
1993 1.00 0.03 (0.03) 1.00 2.96 446,788 0.46 2.89 0.85 2.50
1992 1.00 0.05 (0.05) 1.00 4.73 444,388 0.38 4.58 0.82 4.14
1991 1.00 0.07 (0.07) 1.00 7.11 427,439 0.37 6.80 0.82 6.35
1990 1.00 0.08 (0.08) 1.00 8.38 270,524 0.37 8.03 0.84 7.56
19892 1.00 0.06 (0.06) 1.00 4.66+ 220,479 0.20 9.26 0.84 8.62
CLASS C*
1997(A) $1.00 $0.03 $(0.03) $1.00 2.44%+ $ 24,414 0.76% 4.80% 0.95% 4.61%
1997 1.00 0.05 (0.05) 1.00 4.71 12,146 0.76 4.61 0.96 4.41
1996 1.00 0.05 (0.05) 1.00 4.94 19,386 0.75 4.81 1.03 4.53
1995 1.00 0.05 (0.05) 1.00 4.72 21,612 0.73 4.81 1.10 4.44
1994 1.00 0.03 (0.03) 1.00 2.65 7,573 0.73 2.62 1.11 2.24
19931 1.00 0.01 (0.01) 1.00 1.21+ 7,672 0.75 2.46 1.14 2.07
- -------------
CASH RESERVE
- -------------
CLASS Y*
1997(A) $1.00 $0.03 $(0.03) $1.00 2.65%+ $956,368 0.52% 5.20% 0.72% 5.00%
1997 1.00 0.05 (0.05) 1.00 5.09 886,251 0.50 4.99 0.70 4.79
1996 1.00 0.05 (0.05) 1.00 5.26 790,211 0.50 5.09 0.78 4.81
1995 1.00 0.05 (0.05) 1.00 5.15 510,341 0.48 5.04 0.85 4.67
1994 1.00 0.03 (0.03) 1.00 3.00 505,273 0.47 2.95 0.85 2.57
1993 1.00 0.03 (0.03) 1.00 2.99 460,832 0.46 2.97 0.85 2.58
1992 1.00 0.05 (0.05) 1.00 4.83 568,672 0.38 4.68 0.82 4.24
1991 1.00 0.07 (0.07) 1.00 7.28 473,187 0.37 6.94 0.82 6.49
1990 1.00 0.08 (0.08) 1.00 8.65 316,290 0.34 8.28 0.80 7.82
1989 1.00 0.09 (0.09) 1.00 8.87 186,151 0.37 8.62 0.90 8.05
1988 1.00 0.07 (0.07) 1.00 6.70 82,399 0.55 6.54 1.14 5.96
CLASS C*
1997(A) $1.00 $0.03 $(0.03) $1.00 2.52%+ $ 79,712 0.77% 4.95% 0.97% 4.75%
1997 1.00 0.05 (0.05) 1.00 4.83 27,693 0.75 4.74 0.95 4.54
1996 1.00 0.05 (0.05) 1.00 5.00 19,736 0.75 4.86 1.03 4.58
1995 1.00 0.05 (0.05) 1.00 4.89 17,583 0.73 4.86 1.10 4.49
1994 1.00 0.03 (0.03) 1.00 2.74 11,451 0.72 2.70 1.10 2.32
19931 1.00 0.01 (0.01) 1.00 1.23+ 15,330 0.76 2.52 1.15 2.13
CLASS B
1997(A)(4) $1.00 $ -- $ -- $1.00 0.50%+ $ 80 1.52% 4.20% 1.72% 4.00%
- ----------------
TAX-FREE RESERVE
- ----------------
CLASS Y*
1997(A) $1.00 $0.02 $(0.02) $1.00 1.63%+ $ 152,822 0.52% 3.17% 0.71% 2.98%
1997 1.00 0.03 (0.03) 1.00 3.08 119,579 0.50 3.07 0.70 2.87
1996 1.00 0.03 (0.03) 1.00 3.20 104,196 0.48 3.14 0.76 2.86
1995 1.00 0.03 (0.03) 1.00 3.12 62,756 0.48 3.09 0.85 2.72
1994 1.00 0.02 (0.02) 1.00 2.03 79,384 0.49 2.00 0.87 1.62
1993 1.00 0.02 (0.02) 1.00 2.23 72,255 0.51 2.20 0.89 1.82
1992 1.00 0.03 (0.03) 1.00 3.56 80,147 0.37 3.39 0.88 2.88
19913 1.00 0.01 (0.01) 1.00 1.07+ 42,573 0.06 4.20 0.81 3.45
CLASS C*
1997(A) $1.00 $0.02 $(0.02) $1.00 1.49%+ $ 12,396 0.77% 2.92% 0.96% 2.73%
1997 1.00 0.03 (0.03) 1.00 2.83 3,202 0.75 2.82 0.95 2.62
1996 1.00 0.03 (0.03) 1.00 2.95 2,850 0.73 2.94 1.02 2.65
1995 1.00 0.03 (0.03) 1.00 2.86 1,524 0.73 2.80 1.10 2.43
1994 1.00 0.02 (0.02) 1.00 1.78 2,708 0.74 1.75 1.12 1.37
19931 1.00 0.01 (0.01) 1.00 0.85+ 1,795 0.76 1.71 1.14 1.33
<FN>
AMOUNTS DESIGNATED AS "--" ARE EITHER $0 OR HAVE BEEN ROUNDED TO $0.
* 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, 1997, 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.
4 COMMENCED OPERATIONS NOVEMBER 18, 1997. RATIOS FOR THE PERIOD HAVE BEEN ANNUALIZED.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
</FN>
</TABLE>
108
<PAGE>
NOTES TO
FINANCIAL
STATEMENTS [SQUARE BULLET] COREFUND
- --------------------------------------------------------------------------------
AS OF
DECEMBER 31, 1997
(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, Global Bond Fund, Intermediate Municipal Bond Fund, Pennsylvania Municipal
Bond Fund, New Jersey Municipal Bond Fund (the Fixed Income Funds), Treasury
Reserve, Cash Reserve, and Tax-Free Reserve (the Money Market Funds) are
portfolios offered by CoreFunds, Inc. (The Company), an open-end investment
company registered under the Investment Company Act of 1940, as amended. The
Company is presently authorized to offers 20 separate portfolios (the Funds):
EQUITY PORTFOLIOS: MONEY MARKET PORTFOLIOS:
Equity Index Fund Treasury Reserve
Core Equity Fund Cash Reserve
Growth Equity Fund Tax-Free Reserve
Special Equity Fund Elite Cash Reserve
International Growth Fund Elite Treasury Reserve
Balanced Fund Elite Tax-Free Reserve
FIXED INCOME PORTFOLIOS:
Short Term Income Fund
Short-Intermediate Bond Fund
Government Income Fund
Bond Fund
Global Bond Fund
Intermediate Municipal Bond Fund
Pennsylvania Municipal Bond Fund
New Jersey Municipal Bond Fund
The financial statements of the Elite Cash Reserve, Elite Treasury Reserve
and Elite Tax-Free Reserve are not presented herein.
The assets of each Portfolio are segregated, and a Shareholder's interest
is limited to the Portfolio in which shares are held. The Funds' prospectus
provides a description of the Funds' investment objectives, policies and
strategies.
2. SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies followed by
the Portfolios.
SECURITY VALUATION--Investment securities of the Equity and Fixed Income
Funds that are listed on a securities exchange for which market quotations are
available are valued by an independent pricing service at the last quoted sales
price for such securities on each business day. If there is no such reported
sale, these securities and unlisted securities for which market quotations are
readily available are valued at the most recent quoted bid price using
procedures determined in good faith by the Board of Trustees. Debt obligations
with sixty days or less remaining until maturity may be valued at their
amortized cost. Under this valuation method, purchase discounts and premiums are
accreted and amortized ratably to maturity and are included in interest income.
Investment securities of the Money Market Funds are stated at amortized
cost, which approximates market value. Under this valuation method, purchase
discounts and premiums are accreted and amortized ratably to maturity and are
included in interest income.
The books and records of the International Growth Fund and Global Bond
Fund are maintained in U.S. dollars. Foreign currency amounts are translated
into U.S. dollars on the following bases:
[BULLET] market value of investment securities, assets and liabilities at
the current rate of exchange; and
[BULLET] purchases and sales of investment securities, income and expenses
at the relevant rates of exchange prevailing on the respective
dates of such transactions.
The International Growth Fund does not isolate the portion of gains or
losses on investments in equity securities that is due to changes in the foreign
exchange rates from that which is due to changes in market prices of equity
securities.
The Global Bond Fund does isolate the effect of fluctuations in foreign
currency rates when determining the gain or loss upon sale or maturity of
foreign currency denominated debt obligations for Federal income tax purposes.
109
<PAGE>
NOTES TO
FINANCIAL
STATEMENTS
- --------------------------------------------------------------------------------
(CONTINUED)
AS OF
DECEMBER 31, 1997
(UNAUDITED)
The International Growth Fund and Global Bond Fund report certain foreign
currency related transactions as components of unrealized and realized gains for
financial reporting purposes, whereas such components are treated as ordinary
income for Federal income tax purposes.
FORWARD FOREIGN CURRENCY CONTRACTS--The International Growth Fund and
Global Bond Fund enter into forward foreign currency contracts as hedges against
either specific transactions or portfolio positions. The aggregate principal
amounts of the contracts are not recorded since 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 settled. Financial future contracts are valued at the settlement
price established each day by the board of trade on an exchange on which they
are traded.
SECURITY TRANSACTIONS AND INVESTMENT INCOME--Security transactions are
accounted for on the trade date of the security purchase or sale. Cost used in
determining net realized capital gains and losses on the sale of securities are
those of the specific securities sold, adjusted for the accretion and
amortization of purchase discounts or premiums during the respective holding
period, which is calculated using the effective interest method. Interest income
is recorded on the accrual basis. Dividend income is recorded on ex-dividend
date.
REPURCHASE AGREEMENTS--Securities pledged as collateral for repurchase
agreements are held by each Portfolio's custodian bank until maturity of the
repurchase agreements. Provisions of the agreements and procedures adopted by
the adviser ensure that the market value of the collateral, including accrued
interest thereon, is sufficient in the event of default by the counterparty. If
the counterparty defaults and the value of the collateral declines or if the
counterparty enters into insolvency proceedings, realization of collateral by
the Portfolio may be delayed or limited.
EXPENSES--Expenses that are directly related to one of the Funds are
charged directly to that Fund. Other operating expenses of the Company are
pro-rated to the Funds on the basis of relative net assets. 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 Fund are
allocated to the respective class on the basis of the relative net asset value
each day.
DISTRIBUTION TO SHAREHOLDERS--The Equity Index Fund, Core Equity Fund,
Growth Equity Fund, Special Equity Fund, Balanced Fund and Global Bond Fund
declare and pay dividends on a quarterly basis. The International Growth Fund
declares and pays dividends periodically. Such dividends are reinvested in
additional shares unless otherwise requested. The Short Term Income Fund,
Short-Intermediate Bond Fund, Government Income Fund, Bond Fund, Intermediate
Municipal Bond Fund, Pennsylvania Municipal Bond Fund, New Jersey Municipal Bond
Fund, Treasury Reserve, Cash Reserve and Tax-Free Reserve distributions from net
investment income are declared on a daily basis and are payable on the first
business day of the following month. Any net realized capital gains on sales of
securities for a Fund are distributed to its shareholders at least annually.
Distributions from net investment income and net realized capital gains are
determined in accordance with U.S. Federal income tax regulations, which may
differ from those amounts determined under generally accepted accounting
principles. These book/tax differences are either temporary or permanent in
nature. To the extent these differences are permanent, they are charged or
credited to paid in capital in the period that the difference arises.
Accordingly, for the International Growth Fund and Global Bond Fund as of
December 31, 1997, $(411,000) and $450,000 was reclassified from accumulated net
realized gain (loss)on investments to accumulated net investment income,
respectively.
FEDERAL INCOME TAXES--It is each Fund's intention to continue to qualify as
a regulated investment company and distribute all of its taxable income.
Accordingly, no provision for Federal income tax is required.
OTHER--Organizational costs incurred with the start up of the Balanced
Fund, Government Income Fund, Short Term Income Fund, Intermediate Municipal
Bond Fund, Global Bond Fund, Pennsylvania Municipal Bond Fund and New Jersey
Municipal Bond Fund are being amortized on a straight line basis over a maximum
period of sixty months. If any or all of the shares representing initial capital
of each fund are redeemed by any holder thereof prior to the end of the
amortization period, the proceeds will be reduced by the unamortized
organizational cost balance in the same proportion as the number of shares
redeemed bears to the initial shares outstanding immediately preceding the
redemption.
110
<PAGE>
[SQUARE BULLET] COREFUND
- --------------------------------------------------------------------------------
3. INVESTMENT ADVISORY AND CUSTODIAL SERVICES
The Company has entered into an investment advisory agreement with
CoreStates Investment Advisers, Inc. ("CSIA") to provide investment advisory
services to each Fund. For its services CSIA receives a fee based on the annual
average daily net assets of each Fund as shown in the following table:
<TABLE>
<CAPTION>
ADVISER INVESTMENT ADVISORY ADVISER INVESTMENT ADVISORY
FUND FEE AGREEMENT DATE FUND FEE AGREEMENT DATE
- -------------------- ------- ------------------- -------------------- ------- -------------------
<S> <C> <C> <C> <C> <C> <C>
Equity Index 0.40% March 25, 1991 Short Term Income 0.74% April 12, 1996
Core Equity 0.74 April 12, 1996 Short-Intermediate Bond 0.50 March 25, 1991
Growth Equity 0.75 March 25, 1991 Government Income 0.50 March 25, 1991
Special Equity 1.50 April 12, 1996 Bond 0.74 April 12, 1996
International Growth 0.80 December 5, 1989 Global Bond 0.60 March 25, 1991
Balanced 0.70 March 25, 1991 Intermediate Municipal
Bond 0.50 March 25, 1991
Treasury Reserve 0.40 April 12, 1996 Pennsylvania Municipal
Cash Reserve 0.40 April 12, 1996 Bond 0.50 May 15, 1994
Tax-Free Reserve 0.40 April 12, 1996 New Jersey Municipal
Bond 0.50 May 15, 1994
</TABLE>
Advisory fees are computed daily and paid monthly for all Funds.
Additionally, for the period ended December 31, 1997, CSIA has voluntarily
waived a portion of their fees in order to assist the Funds in maintaining
competitive expense ratios.
CoreStates Bank serves as Custodian to the Company. Under the Custodian
Agreement, CoreStates Bank holds each Fund's securities and cash items, makes
receipts and disbursements of money on behalf of each Fund, collects and
receives all income and other payments and distributions on account of the
Funds' securities and performs other related services. CoreStates Bank may, in
its discretion and at its own expense, open and maintain a sub-custody account
or employ a sub-custodian on behalf of the Funds investing exclusively in the
United States and may, with the Funds' Board approval and at the expense of the
Funds, employ sub-custodians on behalf of the Funds who invest in foreign
countries provided that CoreStates Bank shall remain liable for the performance
of all of its duties under the Custodian Agreement.
Sub-Advisory services are provided to the CoreStates Advisers for the
International Growth Fund by Martin Currie, Inc. and Aberdeen Managers (The
"Sub-Advisers"). Sub-Advisory services are provided for the Global Bond Fund by
Analytic TSA (formerly Alpha Global). CoreStates Advisers is responsible for the
supervision, and payment of fees to the Sub-Advisers in connection with their
services.
4. ADMINISTRATIVE, TRANSFER AGENT AND DISTRIBUTION SERVICES
Pursuant to an Administration agreement dated October 30, 1992, as amended
June 1, 1995, SEI Fund Resources ("SFR") acts as the Fund's Administrator. Under
the terms of such agreement, SFR is entitled to receive an annual fee of 0.25%
on the average net assets of the Funds. SFR voluntarily waives a portion of
their fees in order to assist the Funds in maintaining competitive expense
ratios.
Pursuant to a Transfer Agency agreement dated November 16, 1995, Boston
Financial Data Services ("BFDS"), a wholly owned subsidiary of State Street Bank
and Trust Company acts as the Funds' Transfer Agent. As such, BFDS provides
transfer agency, dividend disbursing and shareholder servicing for the Funds.
On November 2, 1992, SEI Financial Services ("SFS"), a wholly owned
subsidiary of SEI, became the Funds' exclusive Distributor pursuant to a
distribution agreement dated October 30, 1992.
The Company has adopted a Distribution Plan (the "Plan") for those Funds
offering Class A, C and B 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 and 1.00% of the daily net assets of each Class B Portfolio.
The Company has also adopted a Shareholder Servicing Plan for those Funds
offering Class B shares. The Shareholder Servicing Plan provides for the payment
by the Company to the Distributor of up to 25% of the daily net assets of each
Class B Portfolio to which the Plan is applicable. The Distributor is authorized
to use these fees as compensation for its distribution-related services and as
payment to certain securities broker/dealers and financial institutions that
enter into shareholder servicing agreements or broker agreements with the
Distributor. The Funds paid approximately $850,104 to affiliated brokers for
commissions earned on the sales of the shares of the Funds for the six month
period ended December 31, 1997.
Certain officers of the Company are also officers of the Administrator.
Such officers are paid no fees by the Funds.
111
<PAGE>
NOTES TO
FINANCIAL
STATEMENTS
- --------------------------------------------------------------------------------
(CONTINUED)
AS OF
DECEMBER 31, 1997
(UNAUDITED)
A contingent Deferred Sales Charge (CDSC) is imposed on redemptions made in
the Class B shares. The CDSC varies depending on the number of years from the
time of payment for the purchase of Class B shares until the redemption of such
shares.
Contingent Deferred Sales
Year Charges as a Percentage
Since of Dollar Amount
Purchase Subject to Charge
-------- ------------------------
First 5.00%
Second 4.00%
Third 3.00%
Fourth 2.00%
Fifth 1.00%
Sixth None
Seventh Convert to Class A Shares
5. INVESTMENT TRANSACTIONS
During the six month period ended December 31, 1997, purchases of
securities and proceeds from sales of securities, other than temporary
investments in short-term securities, were as follows:
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------
-------------------------------- -------------------------------
PURCHASES SALES
-------------------------------- -------------------------------
U.S. U.S.
PORTFOLIO INVESTMENT TRANSACTIONS (000) GOVERNMENT OTHER TOTAL GOVERNMENT OTHER TOTAL
---------- ----- ------- ---------- ------- --------
<S> <C> <C> <C> <C>
Equity Index Fund -- 26,703 26,703 -- 22,386 22,386
Core Equity Fund -- 132 132 -- 151,787 151,787
Growth Equity Fund -- 66,463 66,463 -- 71,272 71,272
Special Equity Fund -- 24,748 24,748 -- 30,293 30,293
International Growth Fund -- 38,930 38,930 -- 39,848 39,848
Balanced Fund -- 36,206 36,206 -- 34,822 34,822
Short Term Income Fund 2,753 5,191 7,944 4,333 5,139 9,472
Short-Intermediate Bond Fund 65,819 39,422 105,241 69,963 33,236 103,199
Government Income Fund 5,451 -- 5,451 3,814 -- 3,814
Bond Fund 81,637 39,056 120,693 105,566 65,138 170,704
Global Bond Fund -- 41,416 41,416 -- 4,688 4,688
Intermediate Municipal Fund -- 139 139 -- 232 232
Pennsylvania Municipal Bond Fund -- 7,890 7,890 -- 2,405 2,405
New Jersey Municipal Bond Fund -- 353 353 -- 76 76
- ----------------------------------------------------------------------------------------------------------------
</TABLE>
Certain net capital losses incurred subsequent to October 31, 1996 have
been deferred for tax purposes and will be recognized during the fiscal year
ended June 30, 1998. The Funds had capital loss carryforwards at December 31,
1997, as follows:
<TABLE>
<CAPTION>
CAPITAL LOSS
CARRYOVER EXPIRES EXPIRES EXPIRES EXPIRES
6/30/97 2002 2003 2004 2005
------------ ---------- ---------- ----------- -----------
<S> <C> <C> <C> <C> <C>
Short Term Income Fund $ 88,520 $ -- $ -- $ -- $ 88,520
Short-Intermediate Bond Fund 2,907,103 -- 1,483,436 217,497 1,206,170
Government Income Fund 319,174 -- 222,660 4,127 92,387
Bond Fund 1,702,115 -- -- -- 1,702,115
Global Bond Fund 1,573,551 -- 844,493 -- 729,058
Intermediate Term Municipal Bond Fund 79,158 -- 41,918 34,827 2,413
Pennsylvania Municipal Bond Fund 96,691 73,679 95 8,784 14,133
Treasury Reserve 9,082 -- -- -- 9,082
Cash Reserve 167,012 134,628 23,362 9,022 --
Tax-Free Reserve 54,381 5,273 44,981 4,127 --
- -------------------------------------------------------------------------------------------------------------
</TABLE>
For tax purposes, the losses in the Funds can be carried forward for a maximum
of eight years to offset any net realized capital gains.
At December 31, 1997 the total cost of securities and the net realized
gains or losses on securities sold for Federal income tax purposes was not
materially different from amounts reported for financial purposes. The aggregate
gross unrealized gain or loss on securities at December 31, 1997 for each fund
within the CoreFunds is as follows:
112
<PAGE>
[SQUARE BULLET] COREFUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------
------------ ------------ --------
AGGREGATE AGGREGATE
GROSS GROSS
AGGREGATE GROSS UNREALIZED GAIN (LOSS) (000) APPRECIATION DEPRECIATION NET
------------ ------------ --------
<S> <C> <C> <C>
Equity Index Fund $119,666 $ (3,247) $116,419
Core Equity Fund 149,108 (16,936) 132,172
Growth Equity Fund 57,102 (1,766) 55,336
Special Equity Fund 15,922 (11,198) 4,724
International Growth Fund 29,294 (10,958) 18,336
Balanced Fund 23,572 (985) 22,587
Short Term Income Fund 89 (8) 81
Short-Intermediate Bond Fund 1,991 (24) 1,967
Government Income Fund 570 (15) 555
Bond Fund 4,190 (25) 4,165
Global Bond Fund 554 (881) (327)
Intermediate Municipal Bond Fund 56 -- 56
Pennsylvania Municipal Bond Fund 640 (4) 636
New Jersey Municipal Bond Fund 104 -- 104
- ---------------------------------------------------------------------------------------------------------------
</TABLE>
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, 1997:
- -------------------------------------------------------------------------------
GLOBAL BOND FUND:
Foreign Currency Sales:
Contracts to In Exchange Unrealized
Deliver/Receive For Appreciation
--------------- ----------- ------------
3/23/98 DM 10,750,000 $6,101,645 $ 96,870
3/23/98 DK 19,000,000 2,829,149 44,204
3/12/98 FF 10,500,000 1,761,036 8,991
3/12/98 GP 1,950,000 3,197,318 34,913
3/23/98 SK 13,600,000 1,763,451 46,185
---------
Net Unrealized Appreciation $ 231,163
=========
- --------------------------------------------------------------------------------
CURRENCY LEGEND
- ---------------
DM German Marks
DK Danish Kroner
FF French Francs
GP British Pounds
SK Swedish Krona
113
<PAGE>
NOTES TO
FINANCIAL
STATEMENTS
- --------------------------------------------------------------------------------
(CONTINUED)
AS OF
DECEMBER 31, 1997
(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 that
include revenue bonds, tax exempt commercial paper, tax and revenue anticipation
notes, and general obligation bonds. At December 31, 1997, the percentage of
portfolio investments by each revenue source was as follows:
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------
------------ ------------ --------- --------
INTERMEDIATE PENNSYLVANIA NEW JERSEY
MUNICIPAL MUNICIPAL MUNICIPAL
BOND BOND BOND TAX-FREE
FUND FUND FUND RESERVE
------------ ------------ ---------- --------
REVENUE BONDS:
<S> <C> <C> <C> <C>
Education Bonds 17% 18% 15% 7%
Health Care Bonds 3 13 5 10
Transportation Bonds 12 5 7 7
Utility Bonds 14 16 17 4
Housing Bonds -- 2 -- 10
Pollution Control Bonds -- -- -- 10
Industrial Development Bonds 6 16 -- 8
Public Facility Bonds -- 1 2 3
Other 12 2 7 10
GENERAL OBLIGATIONS 36 24 47 6
TAX EXEMPT COMMERCIAL PAPER -- -- -- 21
TAX AND REVENUE ANTICIPATION NOTES -- -- -- 3
TAX ANTICIPATION NOTES -- 3 -- 1
----- ----- ----- ----
100% 100% 100% 100%
- ---------------------------------------------------------------------------------------------------------------
</TABLE>
Many municipalities insure their obligations with insurance underwritten by
insurance companies which undertake to pay a holder, when due, the interest and
principal amount on an obligation if the issuer defaults on its obligation.
Although bond insurance reduces the risk of loss due to default by the issuer,
there is no assurance that the insurance company will meet its obligations.
Also, some of the securities have credit enhancements (letters of credit or
guarantees issued by third party domestic or foreign banks or other
institutions). At December 31, 1997, the percentage of securities with credit
enhancements are as follows:
- ----------------------------------------------------------------------------
------- ---------
LETTERS
OF BOND
CREDIT INSURANCE
------- ---------
Intermediate Municipal Bond Fund -- 64.9%
Pennsylvania Municipal Bond Fund -- 62.1
New Jersey Municipal Bond Fund -- 38.4
Tax-Free Reserve 53.3% 27.6
- ----------------------------------------------------------------------------
114
<PAGE>
[SQUARE BULLET] COREFUND
- --------------------------------------------------------------------------------
8. SHARE TRANSACTIONS (000):
The following are the share transactions for the six month period ended December
31, 1997.
<TABLE>
<CAPTION>
------ ------- ------ ------- ------------- -------- -------- ------- --------
EQUITY CORE GROWTH SPECIAL INTERNATIONAL
INDEX EQUITY EQUITY EQUITY GROWTH BALANCED TREASURY CASH TAX-FREE
FUND FUND(1) FUND FUND FUND FUND RESERVE RESERVE RESERVE
------ ------- ------ ------- ------------- -------- -------- ------- --------
CLASS Y
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Shares issued 613 2,134 1,130 590 3,024 830 1,198,732 1,030,078 170,940
Shares issued in lieu
of cash distributions 223 3,181 639 816 543 449 1,462 1,865 96
Shares redeemed (664) (2,642) (1,381) (841) (2,727) (766) (1,228,616) (961,599) (137,772)
---- ------ ------ ---- ------ ---- ---------- --------- --------
Net increase 172 2,673 388 565 840 513 (28,422) 70,344 33,264
==== ====== ====== ==== ====== ==== ========== ========= ========
CLASS A/C
Shares issued 117 123 43 42 18 108 34,333 107,066 24,342
Shares issued in lieu
of cash distributions 8 120 25 34 9 24 272 1,229 132
Shares redeemed 16 (78) (23) (15) (17) (35) (22,458) (56,508) (15,279)
---- ------ ------ ---- ------ ---- ---------- --------- --------
Net increase 109 165 45 61 10 97 12,147 51,787 9,195
==== ====== ====== ==== ====== ==== ========== ========= ========
CLASS B
Shares issued 19 6 6 10 1 40 -- 88 --
Shares issued in lieu
of cash distributions -- 1 -- 2 -- 2 -- -- --
Shares redeemed -- -- -- -- -- -- -- (8) --
---- ------ ------ ---- ------ ---- ---------- --------- --------
Net increase 19 7 6 12 1 42 -- 80 --
==== ====== ====== ==== ====== ==== ========== ========= ========
TOTAL SHARE ACTIVITY
FOR PERIOD 300 2,845 439 638 851 652 (16,275) 122,211 42,459
==== ====== ====== ==== ====== ==== ========== ========= ========
<FN>
(1) THIS FUND WAS FORMERLY KNOWN AS THE EQUITY FUND.
AMOUNTS DESIGNATED AS "--" ARE EITHER $0 OR HAVE BEEN ROUNDED TO $0.
</FN>
</TABLE>
<TABLE>
<CAPTION>
---------- ------------ ---------- ------ ------ ------------ ------------ ----------
SHORT TERM SHORT- GOVERNMENT GLOBAL INTERMEDIATE PENNSYLVANIA NEW JERSEY
INCOME INTERMEDIATE INCOME BOND BOND MUNICIPAL MUNICIPAL MUNICIPAL
FUND BOND FUND FUND FUND FUND BOND FUND BOND FUND BOND FUND
---------- ------------ ---------- ------ ------ ------------ ------------ ----------
CLASS Y
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Shares issued 616 2,018 309 1,147 95 3 270 17
Shares issued in lieu
of cash distributions 88 454 35 479 137 -- 12 1
Shares repurchased (692) (1,998) (195) (2,950) (42) (14) (55) (10)
---- ------ ---- ------ --- --- --- ---
Net increase (decrease) 12 474 149 (1,324) 190 (11) 227 8
==== ====== ==== ====== === === === ===
CLASS A
Shares issued 7 29 31 42 7 6 241 16
Shares issued in lieu
of cash distributions 1 6 4 4 1 2 6 1
Shares repurchased -- (31) (23) (12) (1) (9) (12) (7)
---- ------ ---- ------ --- --- --- ---
Net increase (decrease) 8 4 12 34 7 (1) 235 10
==== ====== ==== ====== === === === ===
TOTAL SHARE ACTIVITY
FOR PERIOD 20 478 161 (1,290) 197 (12) 462 18
==== ====== ==== ====== === === === ===
<FN>
AMOUNTS DESIGNATED AS "--" ARE EITHER $0 OR HAVE BEEN ROUNDED TO $0.
</FN>
</TABLE>
115
<PAGE>
NOTES TO
FINANCIAL
STATEMENTS
- --------------------------------------------------------------------------------
(CONCLUDED)
AS OF
DECEMBER 31, 1997
(UNAUDITED)
9. SHAREHOLDER VOTING RIGHTS
There was a special meeting scheduled for December 15, 1997 at which the
shareholders of the International Growth Fund voted on to approve the selection
of Aberdeen Managers as a sub-adviser for a portion of the assets of the
International Growth Fund. The results are as follows:
Shares Voted % of Voted % of Total
----------- ---------- ----------
FOR 8,203,048.00 98.77% 70.55%
AGAINST 11,795.00 0.14% 0.10%
ABSTAIN 89,958.00 1.08% 0.77%
10. PROPOSED REORGANIZATION
On November 18, 1997, CoreStates Financial Corp. and First Union
Corporation jointly announced that they had signed a definitive agreement for
the merger of CoreStates Bank, N.A. and First Union Bank. The Advisor is
currently a wholly-owned subsidiary of CoreStates Bank, N.A. Subject to certain
conditions, it is anticipated that the transaction will close at the end of
April, 1998. Thereafter, the Advisor will be an indirect wholly-owned subsidiary
of First Union Bank. A special meeting of shareholders will be called to
consider certain proposed fund reorganizations.
116
<PAGE>
CoreFunds,Inc.
--------------
ELITE TREASURY RESERVE
ELITE CASH RESERVE
ELITE TAX-FREE RESERVE
SEMI-ANNUAL REPORT
December 31, 1997
<PAGE>
<TABLE>
<CAPTION>
STATEMENT OF NET ASSETS COREFUND ELITE MONEY MARKET FUNDS
- ---------------------------------------------------------------------------------------------------------------------------
December 31, 1997 (Unaudited)
PAR VALUE
ELITE TREASURY RESERVE (000) (000)
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
U.S. TREASURY OBLIGATIONS - 33.7%
U.S. Treasury Bills+
5.180%, 01/22/98 .......................................................... $ 6,000 $ 5,982
5.650%, 03/05/98 .......................................................... 500 495
5.797%, 04/02/98 .......................................................... 500 493
5.793%, 04/30/98 .......................................................... 500 491
5.580%, 05/28/98 .......................................................... 500 489
5.530%, 06/25/98 .......................................................... 500 487
5.540%, 08/20/98 .......................................................... 2,000 1,932
U.S. Treasury Notes
5.600%, 01/31/98 .......................................................... 900 900
5.690%, 07/31/98 .......................................................... 500 499
5.780%, 08/15/98 .......................................................... 500 500
5.610%, 08/31/98 .......................................................... 500 502
5.640%, 09/30/98 .......................................................... 500 501
5.650%, 10/31/98 .......................................................... 500 501
5.730%, 11/15/98 .......................................................... 2,000 1,996
5.740%, 11/30/98 .......................................................... 3,000 2,997
U.S. Treasury STRIPS
5.730%, 05/15/98 .......................................................... 400 392
5.740%, 08/15/98 .......................................................... 500 483
--------
TOTAL U.S. TREASURY OBLIGATIONS
(Cost $19,640) ............................................................... 19,640
- ---------------------------------------------------------------------------------------------------------------------------
REPURCHASE AGREEMENTS - 66.6%
Aubrey Lanston 5.25%, dated 12/31/97, matures 01/02/98, repurchase price
$2,778,810 (collateralized by U.S. Treasury Note, par value $2,850,000,
5.625%, 12/31/02; market value $2,849,145) ................................... 2,778 2,778
Goldman Sachs 6.35%, dated 12/31/97, matures 01/02/98,
repurchase price $2,000,706 (collateralized by U.S. Treasury
Note, par value $1,960,000, 6.875%, 03/31/00;
market value $2,044,672) ..................................................... 2,000 2,000
Hong Kong Shanghai Bank 6.40%, dated 12/31/97, matures 01/02/98, repurchase
price $13,304,729 (collateralized by U.S. Treasury Note, par value
$13,155,000, 6.75%, 04/30/00; market value $13,619,372) ...................... 13,300 13,300
</TABLE>
1
<PAGE>
<TABLE>
<CAPTION>
STATEMENT OF NET ASSETS (continued) COREFUND ELITE MONEY MARKET FUNDS
- ---------------------------------------------------------------------------------------------------------------------------
December 31, 1997 (Unaudited)
PAR VALUE
ELITE TREASURY RESERVE (000) (000)
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Merrill Lynch 6.40%, dated 12/31/97, matures 01/02/98, repurchase price
$2,500,889 (collateralized by U.S. Treasury Note, par value $2,365,000,
8.00%, 05/15/01; market value $2,556,092) .................................... $ 2,500 $ 2,500
Morgan Stanley 6.20%, dated 12/31/97, matures 01/02/98,
repurchase price $2,500,861 (collateralized by various U.S.
Treasury Notes, ranging in par value $295,000-$2,275,000,
5.50%, 12/31/00; total market value $2,560,491) .............................. 2,500 2,500
State Street Bank 5.50%, dated 12/31/97, matures 01/02/98,
repurchase price $13,204,033 (collateralized by U.S. Treasury
Note, par value $13,250,000, 6.125%, 03/31/98;
market value $13,475,250) .................................................... 13,200 13,200
Swiss Bank 6.40%, dated 12/31/97, matures 01/02/98,
repurchase price $2,500,889 (collateralized by U.S. Treasury
Note, par value $2,370,000, 7.50%, 05/15/02;
market value $2,559,126) ..................................................... 2,500 2,500
--------
TOTAL REPURCHASE AGREEMENTS
(Cost $38,778) ............................................................... 38,778
- ---------------------------------------------------------------------------------------------------------------------------
TOTAL INVESTMENTS - 100.3%
(Cost $58,418) .................................................................. 58,418
- ---------------------------------------------------------------------------------------------------------------------------
OTHER ASSETS AND LIABILITIES, NET - (0.3%) ......................................... (151)
- ---------------------------------------------------------------------------------------------------------------------------
Portfolio Shares ($0.001 par value -- 250 million authorized shares)
based on 53,853,436 outstanding shares .......................................... 53,854
Portfolio Shares ($0.001 par value -- 250 million authorized shares)
based on 4,413,400 outstanding shares ........................................... 4,413
- ---------------------------------------------------------------------------------------------------------------------------
TOTAL NET ASSETS - 100.0% .......................................................... $58,267
- ---------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE AND REDEMPTION PRICE PER SHARE -- CLASS Y .......................... $1.00
- ---------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE AND REDEMPTION PRICE PER SHARE -- CLASS C .......................... $1.00
- ---------------------------------------------------------------------------------------------------------------------------
</TABLE>
+ YIELD TO MATURITY
STRIPS -- SEPARATELY TRADED REGISTERED INTEREST AND PRINCIPAL OF SECURITIES
See accompanying notes to financial statements.
2
<PAGE>
<TABLE>
<CAPTION>
STATEMENT OF NET ASSETS (CONCLUDED) COREFUND ELITE MONEY MARKET FUNDS
- ---------------------------------------------------------------------------------------------------------------------------
December 31, 1997 (Unaudited)
PAR VALUE
ELITE CASH RESERVE (000) (000)
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
COMMERCIAL PAPER - 58.1%
BANKING - 3.3%
NationsBank
5.858%, 01/30/98 ........................................................... $5,000 $ 4,977
5.813%, 03/17/98 ........................................................... 5,000 4,940
----------
Total Banking 9,917
----------
FINANCIAL SERVICES - 40.3%
Abbey National Treasury Services
5.712%, 04/27/98 ........................................................... 3,000 2,946
American Express
6.653%, 01/02/98 ........................................................... 5,000 4,999
5.581%, 01/09/98 ........................................................... 2,000 1,998
Asset Securitization Coop
5.770%, 02/26/98 ........................................................... 5,000 4,956
Cafco
6.653%, 01/02/98 ........................................................... 5,000 4,999
5.689%, 01/27/98 ........................................................... 5,000 4,980
Caisse de Depots En Consignations
5.678%, 03/17/98 ........................................................... 5,000 4,943
Cit Group Holdings
5.841%, 01/28/98 ........................................................... 5,000 4,978
Credit Suisse Commercial Paper
5.710%, 03/12/98 ........................................................... 5,000 4,945
Eureka Securitization
5.666%, 01/23/98 ........................................................... 3,000 2,990
5.695%, 02/02/98 ........................................................... 5,000 4,975
Ford Motor Credit
5.639%, 01/05/98 ........................................................... 3,000 2,998
5.788%, 02/05/98 ........................................................... 3,000 2,983
5.688%, 02/06/98 ........................................................... 2,000 1,989
5.774%, 03/06/98 ........................................................... 3,000 2,970
Goldman Sachs
5.560%, 05/07/98 ........................................................... 5,000 4,901
Merrill Lynch
5.679%, 01/16/98 ........................................................... 3,000 2,993
5.696%, 02/20/98 ........................................................... 3,900 3,870
5.700%, 03/30/98 ........................................................... 150 148
5.825%, 04/30/98 ........................................................... 3,000 2,944
</TABLE>
3
<PAGE>
<TABLE>
<CAPTION>
STATEMENT OF NET ASSETS COREFUND ELITE MONEY MARKET FUNDS
- ---------------------------------------------------------------------------------------------------------------------------
December 31, 1997 (Unaudited)
PAR VALUE
ELITE CASH RESERVE (000) (000)
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Morgan Stanley
5.673%, 01/21/98 ........................................................... $3,000 $ 2,991
5.680%, 02/04/98 ........................................................... 3,000 2,984
Morgan Stanley (A)
5.910%, 01/13/98 ........................................................... 5,000 5,000
National Australia Bank
5.764%, 02/13/98 ........................................................... 5,000 4,966
New Center Asset Trust
5.674%, 01/30/98 ........................................................... 3,000 2,987
5.490%, 04/03/98 ........................................................... 6,900 6,803
Prudential Funding
5.856%, 01/08/98 ........................................................... 5,000 4,994
5.839%, 01/12/98 ........................................................... 5,000 4,991
Swedish Export Credit
5.810%, 04/09/98 ........................................................... 5,000 4,922
---------
Total Financial Services 114,143
---------
INDUSTRIAL - 13.7%
Bell Atlantic Network
5.835%, 01/07/98 ........................................................... 5,000 4,995
BP America
6.402%, 01/02/98 ........................................................... 5,000 4,999
Campbell Soup
5.684%, 03/04/98 ........................................................... 3,600 3,566
Coca Cola
5.603%, 01/22/98 ........................................................... 5,000 4,984
Dupont
5.599%, 01/29/98 ........................................................... 5,000 4,978
General Electric
5.685%, 02/25/98 ........................................................... 3,000 2,974
5.736%, 04/23/98 ........................................................... 3,000 2,948
5.881%, 07/09/98 ........................................................... 5,000 4,851
Mitsubishi International
5.681%, 02/04/98 ........................................................... 3,000 2,984
---------
Total Industrial 39,278
---------
UTILITIES - 0.8%
National Rural Utilities
5.644%, 01/20/98 ........................................................... 3,000 2,991
TOTAL COMMERCIAL PAPER
(Cost $164,330) ............................................................... 164,330
- ---------------------------------------------------------------------------------------------------------------------------
</TABLE>
4
<PAGE>
<TABLE>
<CAPTION>
STATEMENT OF NET ASSETS (CONTINUED) COREFUND ELITE MONEY MARKET FUNDS
- ---------------------------------------------------------------------------------------------------------------------------
December 31, 1997 (Unaudited)
PAR VALUE
ELITE CASH RESERVE (000) (000)
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
U.S. GOVERNMENT AGENCY OBLIGATIONS - 3.7%
FHLB
5.810%, 01/23/98 ........................................................... $5,000 $ 5,000
FNMA (A)
5.894%, 01/06/98 ........................................................... 5,000 4,998
----------
TOTAL U.S. GOVERNMENT AGENCY OBLIGATIONS
(Cost $9,998) ................................................................. 9,998
- ---------------------------------------------------------------------------------------------------------------------------
ASSET-BACKED SECURITIES - 4.8%
Asset-Backed Securities Investment Trust,
Series 1997-C, Class N (A)
5.961%, 01/15/98 ........................................................... 5,000 5,000
Case Equipment Loan Trust, Series 1997-B, Class A1
5.612%, 10/13/98 ........................................................... 3,181 3,181
Key Auto Finance Trust, Series 1997-2, Class A1
5.835%, 01/05/99 ........................................................... 5,000 5,000
----------
TOTAL ASSET-BACKED SECURITIES
(Cost $13,181) ................................................................ 13,181
- ---------------------------------------------------------------------------------------------------------------------------
CORPORATE OBLIGATIONS - 7.7%
BANKING - 1.8%
J.P. Morgan (A)
5.875%, 01/02/98 ........................................................... 5,000 5,002
----------
FINANCIAL SERVICES - 4.8%
Abbey National Treasury Services (A)
5.650%, 01/02/98 ........................................................... 5,000 4,999
Credit Suisse First Boston (A)
5.670%, 01/02/98 ........................................................... 5,000 5,000
Paccar Financial
5.770%, 09/15/98 ........................................................... 3,500 3,497
----------
Total Financial Services 13,496
----------
INDUSTRIAL - 1.0%
Pitney Bowes Credit
6.305%, 09/23/98 ........................................................... 2,900 2,909
----------
TOTAL CORPORATE OBLIGATIONS
(Cost $21,407) ................................................................ 21,407
- ---------------------------------------------------------------------------------------------------------------------------
</TABLE>
5
<PAGE>
<TABLE>
<CAPTION>
STATEMENT OF NET ASSETS (CONTINUED) COREFUND ELITE MONEY MARKET FUNDS
- ---------------------------------------------------------------------------------------------------------------------------
December 31, 1997 (Unaudited)
PAR VALUE
ELITE CASH RESERVE (000) (000)
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
MASTER NOTE - 2.5%
Associates Corporation of North America
5.497%, 01/02/98 ........................................................... $6,816 $ 6,817
----------
TOTAL MASTER NOTE
(Cost $6,817) ................................................................. 6,817
- ---------------------------------------------------------------------------------------------------------------------------
TIME DEPOSITS - 12.6%
Banque Nationale de Paris
6.625%, 01/02/98 ........................................................... 7,000 7,000
Bayerische Vereinsbank
6.500%, 01/02/98 ........................................................... 7,000 7,000
Den Danske Bank
6.500%, 01/02/98 ........................................................... 7,000 7,000
Republic National Bank of New York
6.500%, 01/02/98 ........................................................... 7,000 7,000
State Street Bank
5.500%, 01/02/98 ........................................................... 7,000 7,000
----------
TOTAL TIME DEPOSITS
(Cost $35,000) ................................................................ 35,000
- ---------------------------------------------------------------------------------------------------------------------------
INSURANCE FUNDING AGREEMENT - 1.9%
Allstate (A)
5.696%, 01/01/98 ........................................................... 5,000 5,000
----------
TOTAL INSURANCE FUNDING AGREEMENT
(Cost $5,000) ................................................................. 5,000
- ---------------------------------------------------------------------------------------------------------------------------
CERTIFICATES OF DEPOSIT - 8.6%
National Westminster Bank
5.940%, 06/26/98 ........................................................... 5,000 4,999
Societe Generale
6.080%, 06/09/98 ........................................................... 5,000 4,999
5.765%, 10/09/98 ........................................................... 3,000 2,998
Swiss Bank
6.020%, 06/12/98 ........................................................... 5,000 5,001
5.825%, 10/02/98 ........................................................... 3,000 2,999
5.852%, 11/20/98 ........................................................... 3,000 2,999
----------
TOTAL CERTIFICATES OF DEPOSIT
(Cost $23,995) ................................................................ 23,995
- ---------------------------------------------------------------------------------------------------------------------------
</TABLE>
6
<PAGE>
<TABLE>
<CAPTION>
STATEMENT OF NET ASSETS (CONTINUED) COREFUND ELITE MONEY MARKET FUNDS
- ---------------------------------------------------------------------------------------------------------------------------
December 31, 1997 (Unaudited)
PAR VALUE
ELITE CASH RESERVE (000) (000)
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
TOTAL INVESTMENTS - 100.0%
(Cost $279,728) .................................................................. $279,728 $281,727
- ---------------------------------------------------------------------------------------------------------------------------
OTHER ASSETS AND LIABILITIES, NET - 0.0% ............................................ (35)
- ---------------------------------------------------------------------------------------------------------------------------
NET ASSETS:
Portfolio Shares ($0.001 par value -- 750 million authorized)
based on 279,350,241 outstanding shares .......................................... 279,351
Portfolio Shares ($0.001 par value -- 750 million authorized)
based on 345,347 outstanding shares .............................................. 345
Accumulated net realized loss on investments ........................................ (3)
- ---------------------------------------------------------------------------------------------------------------------------
TOTAL NET ASSETS - 100.0% ........................................................... $279,693
- ---------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE AND REDEMPTION PRICE PER SHARE -- CLASS Y ............................ $1.00
- ---------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE AND REDEMPTION PRICE PER SHARE -- CLASS C ............................ $1.00
- ---------------------------------------------------------------------------------------------------------------------------
<FN>
+ EFFECTIVE YIELD
(A) VARIABLE RATE SECURITY -- THE RATE REFLECTED ON THE STATEMENT OF NET ASSETS
IS THE RATE IN EFFECT ON DECEMBER 31, 1997.
FNMA -- FEDERAL NATIONAL MORTGAGE ASSOCIATION
SLMA -- STUDENT LOAN MARKETING ASSOCIATION
</FN>
</TABLE>
See accompanying notes to financial statements.
7
<PAGE>
<TABLE>
<CAPTION>
STATEMENT OF NET ASSETS (CONCLUDED) COREFUND ELITE MONEY MARKET FUNDS
- ---------------------------------------------------------------------------------------------------------------------------
December 31, 1997 (Unaudited)
PAR VALUE
ELITE TAX-FREE RESERVE (000) (000)
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
MUNICIPAL BONDS - 99.7%
ALABAMA - 2.8%
Alabama State Public School and College Revenue Bond (C)
5.500%, 10/01/98 ........................................................... $1,000 $ 1,012
Montgomery, Alabama TECP
3.700%, 02/26/98 ........................................................... 2,000 2,000
North Alabama Environmental Improvement Authority Revenue
Bond for Reynold Metals Project (A) (B) (C)
5.000%, 01/02/98 ........................................................... 2,500 2,500
---------
Total Alabama 5,512
---------
ALASKA - 0.4%
Valdez, Alaska TECP
3.800%, 03/10/98 ........................................................... 800 800
---------
ARIZONA - 2.5%
Arizona Agriculture Improvement and Power District Electric
Revenue Bond for Salt River Project, Series E
Pre-Refunded @ 100 (C) (D)
8.250%, 01/02/98 ........................................................... 2,710 2,710
Arizona State, Maricopa County Regional Area
Road Funding TRAN (B)
7.400%, 07/01/98 ........................................................... 2,100 2,136
---------
Total Arizona 4,846
---------
CALIFORNIA - 3.7%
Los Angeles County, California TRAN
4.500%, 06/30/98 ........................................................... 2,000 2,006
Los Angeles County, California TRAN, Series A
4.500%, 06/30/98 ........................................................... 3,000 3,009
Sonoma County, California TRAN
4.500%, 01/29/98 ........................................................... 2,200 2,202
---------
Total California 7,217
---------
COLORADO - 0.7%
Moffat County, Colorado Pollution Control
Revenue Bond (A) (B) (C)
4.150%, 07/01/98 ........................................................... 1,400 1,400
---------
DELAWARE - 0.5%
Wilmington, Delaware Hospital for Franciscan Health System
Hospital Project, Series A Pre-Refunded @ 100 (A) (B) (C) (D)
5.000%, 02/02/98 ........................................................... 1,000 1,000
---------
</TABLE>
8
<PAGE>
<TABLE>
<CAPTION>
STATEMENT OF NET ASSETS COREFUND ELITE MONEY MARKET FUNDS
- ---------------------------------------------------------------------------------------------------------------------------
December 31, 1997 (Unaudited)
PAR VALUE
ELITE TAX-FREE RESERVE (000) (000)
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
FLORIDA - 3.3%
Broward County, Florida Housing Finance Authority Multi-Family
Housing Revenue Landings Inverray Apartments
Project (A) (B) (C)
4.250%, 01/02/98 ........................................................... $ 600 $ 600
Broward County, Florida Housing Financial Authority
Multi-Family Housing Revenue Bond Sanctuary
Apartments Project (A) (C)
4.250%, 01/02/98 ........................................................... 1,500 1,500
Florida Municipal Power TECP
3.650%, 02/11/98 ........................................................... 2,510 2,510
Sunshine State, Florida TECP
3.750%, 03/27/98 ........................................................... 2,000 2,000
----------
Total Florida 6,610
----------
GEORGIA - 1.4%
Georgia Municipal Electric Authority Revenue Bond,
Series B Pre-Refunded @ 102 (A) (B) (D)
8.000%, 01/02/98 ........................................................... 1,000 1,020
Hapeville, Georgia Industrial Development Authority
Revenue Bond for Hapeville Hotel Project (A) (B) (C)
5.100%, 01/02/98 ........................................................... 300 300
Georgia State, Municipal Electric Authority
Revenue Bond (A) (B) (C)
3.850%, 01/02/98 ........................................................... 1,405 1,405
----------
Total Georgia 2,725
----------
ILLINOIS - 1.2%
Chicago, Illinois O'Hare Airport Revenue Bond (A) (B) (C)
3.700%, 01/02/98 ........................................................... 300 300
Illinois Development Financial Authority Pollution Control
Revenue Bond for Amoco Oil Company Project (A) (B)
4.950%, 01/02/98 ........................................................... 600 600
Illinois State Toll Highway Authority Revenue Bond,
Series B (A) (B)
3.650%, 01/02/98 ........................................................... 1,400 1,400
----------
Total Illinois 2,300
----------
</TABLE>
9
<PAGE>
<TABLE>
<CAPTION>
STATEMENT OF NET ASSETS (CONTINUED) COREFUND ELITE MONEY MARKET FUNDS
- ---------------------------------------------------------------------------------------------------------------------------
December 31, 1997 (Unaudited)
PAR VALUE
ELITE TAX-FREE RESERVE (000) (000)
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
INDIANA - 4.8%
Gary, Indiana Environmental Improvement Revenue Bond for
U.S. Steel Project (A) (B) (C)
4.050%, 01/15/98 ........................................................... $ 700 $ 700
Hammond, Indiana Pollution Control Revenue Bond for Amoco
Oil Company Project (A) (B) (C)
4.950%, 01/02/98 ........................................................... 1,835 1,835
Sullivan Hoosiers, Indiana L1 TECP
3.750%, 02/25/98 ........................................................... 1,000 1,000
Sullivan Hoosiers, Indiana L2 TECP
3.750%, 01/09/98 ........................................................... 1,450 1,450
3.750%, 03/27/98 ........................................................... 1,100 1,100
Sullivan Hoosiers, Indiana L3 TECP
3.700%, 04/09/98 ........................................................... 2,000 2,000
Sullivan Hoosiers, Indiana L5 TECP
3.700%, 02/27/98 ........................................................... 1,000 1,000
3.750%, 03/27/98 ........................................................... 1,000 1,000
3.700%, 04/09/98 ........................................................... 1,700 1,700
Sullivan Hoosiers, Indiana L6 TECP
3.700%, 02/27/98 ........................................................... 1,100 1,100
3.750%, 07/07/98 ........................................................... 2,000 2,000
---------
Total Indiana 14,885
---------
KANSAS - 2.0%
Burlington, Kansas TECP
3.700%, 01/13/98 ........................................................... 1,800 1,800
Johnson County, Kansas School District No. 512
Shawnee Mission GO
5.850%, 10/01/98 ........................................................... 2,000 2,029
Kansas City, Kansas Industrial Development Revenue Bond for
PQ Corporation Project (A) (B) (C)
5.200%, 01/02/98 ........................................................... 100 100
---------
Total Kansas 3,929
---------
KENTUCKY - 4.0%
Mason County, Kentucky Pollution Control Revenue Bond (B) (C)
3.950%, 01/07/98 ........................................................... 6,000 6,000
Pendleton, Kentucky TECP
3.850%, 03/09/98 ........................................................... 2,000 2,000
---------
Total Kentucky 8,000
---------
</TABLE>
10
<PAGE>
<TABLE>
<CAPTION>
STATEMENT OF NET ASSETS (CONTINUED) COREFUND ELITE MONEY MARKET FUNDS
- ---------------------------------------------------------------------------------------------------------------------------
December 31, 1997 (Unaudited)
PAR VALUE
ELITE TAX-FREE RESERVE (000) (000)
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
LOUISIANA - 3.0%
Jefferson Parish, Louisiana Industrial Revenue Bond for
George J. Ackel, Sr. Project (A) (B) (C)
3.850%, 01/07/98 ........................................................... $1,900 $ 1,900
Lake Charles, Louisiana District Port Facility Revenue Bond
for Conoco Project (A) (B)
5.000%, 01/02/98 ........................................................... 2,100 2,100
Louisiana State Public Facilities Authority Revenue Bond
for Kenner Hotel Project (A) (B) (C)
5.100%, 01/07/98 ........................................................... 600 600
Parish of Saint Charles, Louisiana Pollution Control Revenue
Bond for Shell Oil Company Project, Ser B (A) (B)
4.900%, 01/02/98 ........................................................... 1,400 1,400
---------
Total Louisiana 6,000
---------
MASSACHUSETTS - 0.5%
Massachussetts State Health and Educational Facilities Lahey
Clinic Project, Series A1 Pre-Refunded @ 102 (C) (D)
7.625%, 07/01/98 ........................................................... 950 986
---------
MICHIGAN - 4.6%
Cornell Township, Michigan Economic Development
Corporation Revenue Bond for Environmental
Improvement (A) (B) (C)
5.000%, 11/01/16 ........................................................... 200 200
Delta County, Michigan Environmental Improvement Revenue
Bond for Mead Escambia Paper Project, Series C (A) (B) (C)
5.100%, 12/01/23 ........................................................... 600 600
Michigan State GO
4.500%, 09/30/98 ........................................................... 3,000 3,016
Michigan State Strategic Fund Pollution Control Revenue
Bond for Consumer Power Project (A) (B) (C)
4.950%, 01/02/98 ........................................................... 300 300
Michigan Storage TECP
3.750%, 02/05/98 ........................................................... 5,000 5,000
---------
Total Michigan 9,116
---------
</TABLE>
11
<PAGE>
<TABLE>
<CAPTION>
STATEMENT OF NET ASSETS (CONTINUED) COREFUND ELITE MONEY MARKET FUNDS
- ---------------------------------------------------------------------------------------------------------------------------
December 31, 1997 (Unaudited)
PAR VALUE
ELITE TAX-FREE RESERVE (000) (000)
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
MINNESOTA - 1.0%
Minnesota State, GO Pre-Refunded @ 100
6.600%, 08/01/98 ........................................................... $2,000 $ 2,031
---------
MISSISSIPPI - 3.7%
Claiborne County, Mississippi TECP
3.750%, 02/13/98 ........................................................... 2,350 2,350
Claiborne County, Mississippi G2 TECP
3.750%, 03/06/98 ........................................................... 1,400 1,400
Claiborne County, Mississippi TECP
3.750%, 02/13/98 ........................................................... 3,500 3,500
---------
Total Mississippi 7,250
---------
MISSOURI - 3.5%
Independence, Missouri TECP
3.800%, 01/09/98 ........................................................... 2,900 2,900
University of Missouri Capital Project Notes, Series FY
4.250%, 06/30/98 ........................................................... 4,000 4,008
---------
Total Missouri 6,908
---------
MONTANA - 1.9%
Forsyth, Montana Pollution Control Revenue Bond for Portland
General Electric Project (A) (B) (C)
3.700%, 01/02/98 ........................................................... 1,000 1,000
Forsyth, Montana Pollution Control Revenue Bond for Portland
General Electric Project, Series A (A) (B) (C)
3.650%, 01/02/98 ........................................................... 2,000 2,000
Forsyth, Montana Polution Control Revenue Bond Pacificorp
Project, Series 1988 (A) (B) (C)
4.500%, 01/02/98 ........................................................... 800 800
---------
Total Montana 3,800
---------
NEVADA - 1.0%
Clark County, Nevada Industrial Development Revenue
Bond, Series C (A) (B)
3.850%, 01/07/98 ........................................................... 2,000 2,000
---------
</TABLE>
12
<PAGE>
<TABLE>
<CAPTION>
STATEMENT OF NET ASSETS (CONTINUED) COREFUND ELITE MONEY MARKET FUNDS
- ---------------------------------------------------------------------------------------------------------------------------
December 31, 1997 (Unaudited)
PAR VALUE
ELITE TAX-FREE RESERVE (000) (000)
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
NEW HAMPSHIRE - 0.3%
New Hampshire State Industrial Development Revenue Bond
for Oerlikon-Burlhe Project (A) (B) (C)
3.800%, 01/02/98 ........................................................... $ 600 $ 600
----------
NEW MEXICO - 1.1%
Albuquerque, New Mexico GO, Ser A & B
4.600%, 07/01/98 ........................................................... 2,150 2,159
----------
NEW YORK - 3.6%
New York City, New York GO (A) (B) (C)
4.150%, 01/02/98 ........................................................... 300 300
New York Muni Waters TECP
3.800%, 02/05/98 ........................................................... 5,000 5,000
New York State Energy Research and Development Authority
Pollution Control Revenue for Niagara Mohawk Power
Project, Series A (A) (B) (C)
4.500%, 01/02/98 ........................................................... 600 600
New York State Urban Development Corporate Revenue Bond
for Correctional Facilities Project, Series C
Pre-Refunded @102 (C) (D)
7.625%, 01/01/98 ........................................................... 1,175 1,199
----------
Total New York 7,099
----------
NORTH CAROLINA - 4.3%
Lexington, North Carolina Medical Care Community
Hospital Revenue Bond for Memorial Hospital
Project (A) (B) (C)
5.000%, 01/02/98 ........................................................... 1,000 1,000
North Carolina Medcare Givens Revenue Bond (A) (B) (C)
5.000%, 01/02/98 ........................................................... 3,000 3,000
North Carolina Medical Care Community Hospital Revenue
Pooled Finance Project, Series A (A) (B) (C)
5.000%, 01/02/98 ........................................................... 4,470 4,470
----------
Total North Carolina 8,470
----------
OHIO - 1.6%
Evandale, Ohio Industrial Development Authority Revenue
Bond (A) (B) (C)
3.700%, 01/02/98 ........................................................... 1,600 1,600
</TABLE>
13
<PAGE>
<TABLE>
<CAPTION>
STATEMENT OF NET ASSETS (CONTINUED) COREFUND ELITE MONEY MARKET FUNDS
- ---------------------------------------------------------------------------------------------------------------------------
December 31, 1997 (Unaudited)
PAR VALUE
ELITE TAX-FREE RESERVE (000) (000)
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Ohio State Air Quality Revenue Bond (A) (B) (C)
5.000%, 01/07/98 ........................................................... $ 600 $ 600
Ohio State Air Quality Revenue Bond, Series B (A) (B) (C)
4.500%, 01/02/98 ........................................................... 1,000 1,000
----------
Total Ohio 3,200
----------
OREGON - 2.6%
Port of Portland, Oregon Pollution Control Revenue Bond for
Reynold Metals Project (A) (B) (C)
5.000%, 01/02/98 ........................................................... 2,700 2,700
Port of St. Helens, Oregon Pollution Control Revenue
Bond (A) (B) (C)
4.950%, 01/02/98 ........................................................... 1,400 1,400
Umatilla County, Oregon Franciscan Health System Revenue
Bond, Series A Pre-Refunded @ 100 (A) (B) (C) (D)
5.000%, 02/02/98 ........................................................... 1,100 1,100
----------
Total Oregon 5,200
----------
PENNSYLVANIA - 13.8%
Allegheny County, Pennsylvania Hospital Development Revenue
Bond for Presbyterian University Hospital Project,
Ser B3 (A) (B) (C)
4.250%, 01/02/98 ........................................................... 900 900
Allegheny County, Pennsylvania Revenue Bond for Presbyterian
University Hospital (A) (B) (C)
4.250%, 01/02/98 ........................................................... 805 805
4.250%, 01/07/98 ........................................................... 1,700 1,700
Beaver County, Pennsylvania TECP
3.750%, 03/05/98 ........................................................... 1,700 1,700
Beaver County, Pennsylvania Industrial Development Authority
Revenue Bond for Duquesne Light Company Project,
Series A (A) (B) (C)
3.650%, 01/02/98 ........................................................... 1,000 1,000
Beaver County, Pennsylvania Industrial Development Authority
Revenue Bond for Duquesne Light Company Project,
Series B (A) (B) (C)
3.650%, 01/02/98 ........................................................... 1,100 1,100
Curwensville, Pennsylvania School District TRAN
4.160%, 06/30/98 ........................................................... 840 841
</TABLE>
14
<PAGE>
<TABLE>
<CAPTION>
STATEMENT OF NET ASSETS (CONTINUED) COREFUND ELITE MONEY MARKET FUNDS
- ---------------------------------------------------------------------------------------------------------------------------
December 31, 1997 (Unaudited)
FACE
AMOUNT VALUE
ELITE TAX-FREE RESERVE (000) (000)
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Delaware Valley Regional Finance Authority Local Government
Revenue Bond, Series B (A) (B) (C)
3.650%, 01/02/98 ........................................................... $3,000 $ 3,000
Langhorne, Pennsylvania Saint Mary Hospital Authority
Revenue Bond for Franciscan Health Systems Project,
Series C Pre-Refunded @ 100 (A) (B) (C) (D)
5.000%, 02/02/98 ........................................................... 1,000 1,000
Lehigh County, Pennsylvania Industrial Development Authority
Revenue Bond for Allegheny Electric Project,
Series A (A) (B) (C)
3.800%, 12/01/15 ........................................................... 500 500
Montgomery County, Pennsylvania TECP
3.750%, 02/10/98 ........................................................... 2,500 2,500
Pennsylvania State Higher Education Facilities Authority
Revenue Bond for Carnegie Mellon University
Project, Series B (A) (B)
4.850%, 01/02/98 ........................................................... 800 800
Temple University, Pennsylvania Commonwealth
System of Higher Education
4.750%, 05/18/98 ........................................................... 1,000 1,003
Upper Darby, Pennsylvania School District GO
4.170%, 06/30/98 ........................................................... 500 501
Upper Darby, Pennsylvania School District TRAN
4.170%, 06/30/98 ........................................................... 1,756 1,757
Washington County, Pennsylvania Industrial Development
Authority Revenue Bond for Wetterau Finance
Company Project (A) (B) (C)
4.250%, 01/02/98 ........................................................... 2,500 2,500
Washington County, Pennsylvania Lease Revenue
Bond (A) (B) (C)
3.850%, 11/01/05 ........................................................... 3,415 3,415
York, Pennsylvania General Authority Pooled Revenue
Bond (A) (B) (C)
4.200%, 01/02/98 ........................................................... 2,350 2,350
---------
Total Pennsylvania 27,372
---------
SOUTH CAROLINA - 1.0%
Berkeley County, South Carolina Pollution Control Revenue
Bond for Amoco Chemical Project (A) (B)
4.950%, 01/02/98 ........................................................... 1,900 1,900
---------
</TABLE>
15
<PAGE>
<TABLE>
<CAPTION>
STATEMENT OF NET ASSETS (CONTINUED) COREFUND ELITE MONEY MARKET FUNDS
- ---------------------------------------------------------------------------------------------------------------------------
December 31, 1997 (Unaudited)
FACE
AMOUNT VALUE
ELITE TAX-FREE RESERVE (000) (000)
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
TENNESSEE - 0.0%
Sullivan County, Tennessee Industrial Development Authority
Pollution Control Revenue Bond for Mead
Project (A) (B) (C)
5.000%, 01/02/98 ........................................................... $ 100 $ 100
----------
TEXAS - 5.6%
Grapevine, Texas Industrial Development Authority Revenue
Bond for American Airlines Project, Series B3 (A) (B) (C)
5.000%, 01/02/98 ........................................................... 1,600 1,600
Grapevine, Texas Industrial Development Authority Revenue
Bond for American Airlines Project, Series B4 (A) (B) (C)
5.000%, 01/02/98 ........................................................... 800 800
Grapevine, Texas Industrial Development Authority
Revenue Bond for American Airlines Project,
Series A3 (A) (B) (C)
5.000%, 01/02/98 ........................................................... 700 700
Grapevine, Texas Industrial Development Corporation
American Airlines, Series A1 (A) (B) (C)
5.000%, 01/02/98 ........................................................... 400 400
North Central, Texas Health Facility Development Corporation
Revenue Bond (A) (B) (C)
5.000%, 01/02/98 ........................................................... 195 195
Nueces County, Texas Health Facilities Authority Revenue
Bond for Driscoll Children's Foundation Project (A) (B) (C)
3.850%, 01/02/98 ........................................................... 600 600
Port Corpus Christi, Texas Industrial Development Corporation
Revenue Bond, Series A (A) (B) (C)
3.850%, 01/02/98 ........................................................... 2,000 2,000
Tarrant County, Texas Housing Finance Authority Revenue
Bond for Windcastle Project (A) (B) (C)
3.850%, 01/02/98 ........................................................... 1,034 1,034
Texas Small Business Industrial Development Revenue Bond
3.700%, 01/07/98 ........................................................... 1,300 1,300
Texas State, Series A TRAN (A) (B) (C)
4.750%, 08/31/98 ........................................................... 2,500 2,514
----------
Total Texas 11,143
----------
</TABLE>
16
<PAGE>
<TABLE>
<CAPTION>
STATEMENT OF NET ASSETS (CONTINUED) COREFUND ELITE MONEY MARKET FUNDS
- ---------------------------------------------------------------------------------------------------------------------------
December 31, 1997 (Unaudited)
FACE
AMOUNT VALUE
ELITE TAX-FREE RESERVE (000) (000)
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
UTAH - 3.6%
Intermountain Power Agency Utah Power Supply Revenue
Bond, Series F (A) (B) (C)
3.750%, 07/01/15 ........................................................... $3,000 $ 3,000
Intermountain Power Agency Utah TECP
3.750%, 01/12/98 ........................................................... 3,000 3,000
Utah State Brd Regents Revenue Bond (A) (B) (C)
4.750%, 08/01/98 ........................................................... 1,155 1,161
---------
Total Utah 7,161
---------
VERMONT - 0.6%
Vermont State Student Loan Revenue Bond, Student Loan
Assistance Corporation Project (A) (B) (C)
3.800%, 01/02/98 ........................................................... 1,240 1,240
---------
VIRGINIA - 7.1%
Alexandria, Redevelopment & Housing Authority Goodwin
Project Revenue Bond, Ser B (A) (B) (C)
5.000%, 10/01/06 ........................................................... 2,100 2,100
Petersburg, Virginia Hospital Authority Southside
Revenue Project (A)
5.000%, 01/02/98 ........................................................... 1,800 1,800
Portsmouth, Virginia Housing Development Revenue
Bond (A) (B) (C)
4.000%, 11/01/27 ........................................................... 2,000 2,000
Virginia State Peninsula Port Authority Revenue Bond for
Dominion Terminal Project, Series 1987C (A) (B) (C)
5.000%, 01/02/98 ........................................................... 725 725
Virigina State Housing Revenue Bond
3.800%, 06/10/98 ........................................................... 3,000 3,000
Waynesboro, Viriginia Residential Care Facilities
Revenue Bond (A) (B) (C)
5.000%, 01/02/98 ........................................................... 4,330 4,330
---------
Total Virginia 13,955
---------
WEST VIRGINIA - 0.7%
Putnam County, West Virginia Industrial Development
Authority Revenue Bond for FMC Corporation
Project (A) (B) (C)
3.800%, 01/02/98 ........................................................... 1,300 1,300
---------
</TABLE>
17
<PAGE>
<TABLE>
<CAPTION>
STATEMENT OF NET ASSETS (CONTINUED) COREFUND ELITE MONEY MARKET FUNDS
- ---------------------------------------------------------------------------------------------------------------------------
December 31, 1997 (Unaudited)
FACE
AMOUNT VALUE
ELITE TAX-FREE RESERVE (000) (000)
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
WISCONSIN - 0.5%
Wisconsin Health and Educational Facilities Wheaton
Franciscan Services Revenue Bond
Pre-Refunded @ 102 (C) (D)
8.200%, 08/15/98 ........................................................... $1,000 $ 1,046
---------
WYOMING - 6.8%
Converse County, Wyoming TECP
3.750%, 02/02/98 ........................................................... 2,800 2,800
Gillette County, Wyoming TECP
3.700%, 01/07/98 ........................................................... 1,200 1,200
3.800%, 01/14/98 ........................................................... 3,000 3,000
Lincoln County, Wyoming Pollution Control Revenue Bond
for Exxon Project, Series D (A) (B)
5.100%, 01/07/98 ........................................................... 1,200 1,200
Lincoln County, Wyoming Pollution Control Revenue Bond,
Series 1984 B (A)
5.100%, 01/02/98 ........................................................... 600 600
Lincoln County, Wyoming Resource Recovery Revenue Bond
for Exxon Project, Series C (A) (B)
5.100%, 01/02/98 ........................................................... 600 600
Lincoln County, Wyoming Pollution Control Revenue Bond
for Exxon Project (A) (B)
4.950%, 01/02/98 ........................................................... 1,900 1,900
Platte County, Wyoming Pollution Control Revenue Bond,
Series A (A) (B) (C)
4.500%, 01/02/98 ........................................................... 600 600
Platte County, Wyoming Pollution Control Revenue Bond,
Series B (A) (B) (C)
4.500%, 01/02/98 ........................................................... 1,600 1,600
---------
Total Wyoming 13,500
---------
TOTAL MUNICIPAL BONDS
(Cost $202,760) ............................................................... 202,760
- ---------------------------------------------------------------------------------------------------------------------------
TOTAL INVESTMENTS - 99.7%
(Cost $202,760) .................................................................. 202,760
- ---------------------------------------------------------------------------------------------------------------------------
OTHER ASSETS AND LIABILITIES, NET - 0.3% ............................................ 499
- ---------------------------------------------------------------------------------------------------------------------------
</TABLE>
18
<PAGE>
<TABLE>
<CAPTION>
STATEMENT OF NET ASSETS (CONCLUDED) COREFUND ELITE MONEY MARKET FUNDS
- ---------------------------------------------------------------------------------------------------------------------------
December 31, 1997 (Unaudited)
MARKET
VALUE
ELITE TAX-FREE RESERVE (000)
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C>
NET ASSETS:
Portfolio Shares ($0.001 par value -- 250 million authorized)
based on 202,261,424 outstanding shares .......................................... $202,261
Portfolio Shares ($0.001 par value -- 250 million authorized)
based on 1,028,846 outstanding shares ............................................ 1,029
Accumulated Net Realized Loss on Investments ........................................ (31)
- ---------------------------------------------------------------------------------------------------------------------------
TOTAL NET ASSETS - 100.0% ........................................................... $203,259
- ---------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE AND REDEMPTION PRICE PER SHARE -- CLASS Y ........................... $1.00
- ---------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE AND REDEMPTION PRICE PER SHARE -- CLASS C ........................... $1.00
- ---------------------------------------------------------------------------------------------------------------------------
<FN>
GO -- GENERAL OBLIGATION
RAN -- REVENUE ANTICIPATION NOTE
TECP -- TAX-EXEMPT COMMERCIAL PAPER
TRAN -- TAX AND REVENUE ANTICIPATION NOTES
(A) VARIABLE RATE SECURITY -- THE RATE REFLECTED ON THE STATEMENT OF NET ASSETS
IS THE RATE IN EFFECT ON DECEMBER 31, 1997.
(B) PUT OR DEMAND FEATURES EXIST REQUIRING THE ISSUER TO REPURCHASE THE
INSTRUMENT PRIOR TO MATURITY. THE MATURITY DATE SHOWN IS THE LESSER OF THE
PUT DEMAND DATE OR MATURITY DATE.
(C) SECURITIES ARE HELD IN CONNECTION WITH A LETTER OF CREDIT ISSUED BY A MAJOR
COMMERCIAL BANK.
</FN>
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
19
<PAGE>
This page left intentionally blank.
20
<PAGE>
<TABLE>
<CAPTION>
STATEMENT OF OPERATIONS (000) COREFUND ELITE MONEY MARKET FUNDS
- ---------------------------------------------------------------------------------------------------------------------------
For the six month period ended December 31, 1997 (Unaudited)
ELITE ELITE ELITE
TREASURY CASH TAX
RESERVE RESERVE FREE
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
INVESTMENT INCOME:
Interest ................................................ $831 $7,064 $3,408
---- ------ ------
EXPENSES:
Investment advisory fees ................................... 30 248 184
Less investment advisory fees waived ....................... (18) (149) (111)
Administrative fees ........................................ 37 310 230
Less administrative fees waived ............................ (27) (224) (166)
Transfer agent fees & expenses ............................. 3 6 11
Professional fees .......................................... (1) (1) 4
Registration & filing fees ................................. -- 21 4
Printing ................................................... -- 15 10
Miscellaneous .............................................. -- 16 --
---- ------ ------
Total expenses ................................................... 24 242 166
---- ------ ------
NET INVESTMENT INCOME ............................................ 807 6,822 3,242
NET REALIZED LOSS ON INVESTMENTS:
Net realized loss from securities sold ..................... -- -- (1)
---- ------ ------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS ............. $807 $6,822 $3,241
==== ====== ======
</TABLE>
See accompanying notes to financial statements.
21
<PAGE>
<TABLE>
<CAPTION>
STATEMENT OF CHANGES IN NET ASSETS (000) COREFUND ELITE MONEY MARKET FUNDS
- ---------------------------------------------------------------------------------------------------------------------------
For the six month period ended December 31, 1997 (Unaudited) and the year ended June 30, 1996
ELITE
TREASURY
RESERVE*
- ---------------------------------------------------------------------------------------------------------------------
07/01/97 07/01/96
TO 12/31/97 TO 06/30/97
----------- -----------
INVESTMENT ACTIVITIES:
<S> <C> <C>
Net investment income ................................................. $ 807 $ 1,347
Net realized loss on securities ....................................... -- --
-------- --------
Net increase in net assets resulting from operations ........................ 807 1,347
-------- --------
DISTRIBUTIONS TO SHAREHOLDERS:
Net investment income
Class Y ........................................................... (799) (13,478)
Class C ........................................................... (8) --
-------- --------
Total dividends distributed ........................................... (807) (13,478)
-------- --------
CAPITAL SHARE TRANSACTIONS:
Class Y
Proceeds from shares issued ....................................... 97,965 40,896
Cost of shares redeemed ........................................... (65,778) (43,727)
-------- --------
Increase (Decrease) in net assets
from Class C transactions .............................. 32,187 (2,831)
-------- --------
Class C
Proceeds from shares issued ....................................... 4,498 --
Cost of shares redeemed ........................................... (85) --
-------- --------
Increase in net assets from Class C transactions ............. 4,413 --
-------- --------
Increase (Decrease) in net assets from capital transactions ................. 36,600 (2,831)
======== ========
NET ASSETS:
Beginning of period ................................................... 21,667 24,498
-------- --------
End of period ......................................................... $ 58,267 $ 21,667
======== ========
SHARES ISSUED AND REDEEMED:
Class Y
Shares issued ..................................................... 97,965 40,896
Shares redeemed ................................................... (65,778) (43,727)
-------- --------
Net increase (decrease) ...................................... 32,187 (2,831)
-------- --------
Class C
Shares issued ..................................................... 4,498 --
Shares redeemed ................................................... (85) --
-------- --------
Net increase (decrease) ...................................... 4,413 --
-------- --------
Total share activity for period ............................................. 36,600 (2,831)
-------- --------
OUTSTANDING SHARES:
Beginning of period ................................................... 21,667 24,498
-------- --------
End of period ......................................................... 58,267 21,667
======== ========
<PAGE>
</TABLE>
<TABLE>
<CAPTION>
ELITE
CASH
RESERVE**
- -----------------------------------------------------------------------------------------------------------------------
07/01/97 07/01/96
TO 12/31/97 TO 06/30/97
----------- -----------
INVESTMENT ACTIVITIES:
<S> <C> <C>
Net investment income ................................................. $ 6,822 $ 18,767
Net realized loss on securities ....................................... -- (3)
---------- ------------
Net increase in net assets resulting from operations ........................ 6,822 18,764
---------- ------------
DISTRIBUTIONS TO SHAREHOLDERS:
Net investment income
Class Y ........................................................... (6,821) (18,767)
Class C ........................................................... (1) --
---------- ------------
Total dividends distributed ........................................... (6,822) (18,767)
---------- ------------
CAPITAL SHARE TRANSACTIONS:
Class Y
Proceeds from shares issued ....................................... 457,011 825,899
Cost of shares redeemed ........................................... (384,653) (1,003,355)
---------- ------------
Increase (Decrease) in net assets
from Class C transactions .............................. 72,358 (177,456)
---------- ------------
Class C
Proceeds from shares issued ....................................... 345 --
Cost of shares redeemed ........................................... -- --
---------- ------------
Increase in net assets from Class C transactions ............. 345 --
---------- ------------
Increase (Decrease) in net assets from capital transactions ................. 72,703 (177,456)
========== ============
NET ASSETS:
Beginning of period ................................................... 206,990 384,446
---------- ------------
End of period ......................................................... $ 279,693 $ 206,990
========== ============
SHARES ISSUED AND REDEEMED:
Class Y
Shares issued ..................................................... 457,014 825,899
Shares redeemed ................................................... (384,653) (1,003,355)
---------- ------------
Net increase (decrease) ...................................... 72,361 (177,456)
---------- ------------
Class C
Shares issued ..................................................... 345 --
Shares redeemed ................................................... -- --
---------- ------------
Net increase (decrease) ...................................... 345 --
---------- ------------
Total share activity for period ............................................. 72,706 (177,456)
---------- ------------
OUTSTANDING SHARES:
Beginning of period ................................................... 206,990 384,446
---------- ------------
End of period ......................................................... 279,696 206,990
========== ============
</TABLE>
<TABLE>
<CAPTION>
ELITE
TAX-FREE
RESERVE***
- -------------------------------------------------------------------------------------------------------------------
07/01/96 07/01/96
TO 06/30/97 TO 06/30/97
----------- -----------
INVESTMENT ACTIVITIES:
<S> <C> <C>
Net investment income ................................................. $ 3,242 $ 3,774
Net realized loss on securities ....................................... (1) --
----------- ----------
Net increase in net assets resulting from operations ........................ 3,241 3,774
----------- ----------
DISTRIBUTIONS TO SHAREHOLDERS:
Net investment income
Class Y ........................................................... (3,241) (3,774)
Class C ........................................................... (1) --
----------- ----------
Total dividends distributed ........................................... (3,242) (3,774)
----------- ----------
CAPITAL SHARE TRANSACTIONS:
Class Y
Proceeds from shares issued ....................................... 248,501 226,783
Cost of shares redeemed ........................................... (193,581) (165,949)
----------- ----------
Increase (Decrease) in net assets
from Class C transactions .............................. 54,920 60,834
----------- ----------
Class C
Proceeds from shares issued ....................................... 1,029 --
Cost of shares redeemed ........................................... -- --
----------- ----------
Increase in net assets from Class C transactions ............. 1,029 --
----------- ----------
Increase (Decrease) in net assets from capital transactions ................. 55,948 60,834
=========== ==========
NET ASSETS:
Beginning of period ................................................... 147,311 86,477
----------- ----------
End of period ......................................................... $ 203,259 $147,311
=========== ==========
SHARES ISSUED AND REDEEMED:
Class Y
Shares issued ..................................................... 248,501 226,783
Shares redeemed ................................................... (193,581) (165,949)
----------- ----------
Net increase (decrease) ...................................... 54,920 60,834
----------- ----------
Class C
Shares issued ..................................................... 1,029 --
Shares redeemed ................................................... -- --
----------- ----------
Net increase (decrease) ...................................... 1,029 --
----------- ----------
Total share activity for period ............................................. 55,949 60,834
----------- ----------
OUTSTANDING SHARES:
Beginning of period ................................................... 147,341 86,507
----------- ----------
End of period ......................................................... 203,290 147,341
=========== ==========
<FN>
* THIS FUND WAS FORMERLY KNOWN AS THE FIDUCIARY TREASURY RESERVE.
** THIS FUND WAS FORMERLY KNOWN AS THE FIDUCIARY CASH RESERVE.
*** THIS FUND WAS FORMERLY KNOWN AS THE FIDUCIARY TAX-FREE RESERVE.
</FN>
</TABLE>
See accompanying notes to financial statements.
22 & 23
<PAGE>
<TABLE>
<CAPTION>
FINANCIAL HIGHLIGHTS COREFUND ELITE MONEY MARKET FUNDS
- ---------------------------------------------------------------------------------------------------------------------------
December 31, 1997 (Unaudited)
ELITE TREASURY RESERVE+
- ---------------------------------------------------------------------------------------------------------------------------
For a Share Outstanding Throughout the Period
RATIO
NET NET RATIO OF EXPENSES
ASSET DISTRIBUTIONS NET ASSETS RATIO OF NET TO AVERAGE
VALUE NET FROM NET ASSET VALUE END OF EXPENSES INCOME NET ASSETS
BEGINNING INVESTMENT INVESTMENT END TOTAL OF PERIOD TO AVERAGE TO AVERAGE (EXCLUDING
OF PERIOD INCOME INCOME OF PERIOD RETURN (000) NET ASSETS NET ASSETS WAIVERS)
--------- ---------- ------------- ------------ ------ --------- ----------- ---------- -----------
CLASS Y
For the six month
period ended
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
December 31, 1997** $1.00 0.05 (0.05) $1.00 2.76%* $53,854 0.16% 5.46% 0.46%
For the year ended
June 30, 1996 $1.00 0.05 (0.05) $1.00 5.54% $24,498 0.19% 5.39% 0.80%
For the year ended
June 30, 1995 $1.00 0.05 (0.05) $1.00 5.24% $18,396 0.23% 5.09% 0.87%
For the year ended
June 30, 1994 $1.00 0.03 (0.03) $1.00 3.10% $20,363 0.28% 3.03% 0.91%
For the year ended
June 30, 1993 $1.00 0.03 (0.03) $1.00 3.17% $27,614 0.18% 3.19% 0.85%
For the period ended
June 30, 1992 (1) $1.00 0.02 (0.02) $1.00 2.00%* $49,328 0.05% 3.95% 0.80%
CLASS C
For the six month
period ended
December 31, 1997**(2) $1.00 0.01 (0.01) $1.00 0.20%* $4,413 0.41% 5.21% 0.71%
RATIO OF
NET INCOME
TO AVERAGE
NET ASSETS
(EXCLUDING
WAIVERS)
----------
CLASS Y
For the six month
period ended
<S> <C>
December 31, 1997** 5.16%
For the year ended
June 30, 1996 4.78%
For the year ended
June 30, 1995 4.45%
For the year ended
June 30, 1994 2.40%
For the year ended
June 30, 1993 2.52%
For the period ended
June 30, 1992 (1) 3.20%
CLASS C
For the six month
period ended
December 31, 1997**(2) 4.91%
<FN>
- ----------------
* RETURN IS FOR THE PERIOD INDICATED AND HAS NOT BEEN ANNUALIZED.
** RATIOS FOR THE SIX MONTH PERIOD ENDED DECEMBER 31, 1997 HAVE BEEN ANNUALIZED.
(1) THE ELITE TREASURY RESERVE CLASS Y COMMENCED OPERATIONS ON DECEMBER 10, 1991.
RATIOS FOR THIS PERIOD HAVE BEEN ANNUALIZED.
(2) THE ELITE TREASURY RESERVE CLASS C COMMENCED OPERATIONS ON DECEMBER 18, 1997.
+ THIS FUND WAS FORMERLY KNOWN AS THE FIDUCIARY TREASURY RESERVE.
</FN>
</TABLE>
See accompanying notes to financial statements.
24
<PAGE>
<TABLE>
<CAPTION>
FINANCIAL HIGHLIGHTS COREFUND ELITE MONEY MARKET FUNDS
- ---------------------------------------------------------------------------------------------------------------------------
December 31, 1997 (Unaudited)
ELITE CASH RESERVE+
- ---------------------------------------------------------------------------------------------------------------------------
For a Share Outstanding Throughout the Period
RATIO
NET NET RATIO OF EXPENSES
ASSET DISTRIBUTIONS NET ASSETS RATIO OF NET TO AVERAGE
VALUE NET FROM NET ASSET VALUE END OF EXPENSES INCOME NET ASSETS
BEGINNING INVESTMENT INVESTMENT END TOTAL OF PERIOD TO AVERAGE TO AVERAGE (EXCLUDING
OF PERIOD INCOME INCOME OF PERIOD RETURN (000) NET ASSETS NET ASSETS WAIVERS)
--------- ---------- ------------- ------------ ------ --------- ----------- ---------- -----------
CLASS Y
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
For the six month
period ended
December 31, 1997** $1.00 0.05 (0.05) $1.00 2.81%* $279,348 0.20% 5.50% 0.50%
For the year ended
June 30, 1997 $1.00 0.05 (0.05) $1.00 5.43% $206,987 0.17% 5.28% 0.50%
For the year ended
June 30, 1996 $1.00 0.05 (0.05) $1.00 5.62% $384,446 0.15% 5.46% 0.76%
For the year ended
June 30, 1995 $1.00 0.05 (0.05) $1.00 5.46% $406,597 0.17% 5.35% 0.81%
For the year ended
June 30, 1994 $1.00 0.03 (0.03) $1.00 3.31% $382,814 0.16% 3.24% 0.84%
For the year ended
June 30, 1993 $1.00 0.03 (0.03) $1.00 3.29% $424,363 0.17% 3.25% 0.81%
For the year ended
June 30, 1992 $1.00 0.05 (0.05) $1.00 5.04% $416,945 0.18% 4.96% 0.83%
For the year ended
June 30, 1991 $1.00 0.07 (0.07) $1.00 7.49% $453,947 0.15% 7.05% 0.80%
For the period ended
June 30, 1990 (1) $1.00 0.08 (0.08) $1.00 8.03%* $232,091 0.13% 8.42% 0.83%
CLASS C
For the six month
period ended
December 31, 1997**(2) $1.00 0.01 (0.01) $1.00 0.21%* $345 0.45% 5.35% 0.75%
RATIO OF
NET INCOME
TO AVERAGE
NET ASSETS
(EXCLUDING
WAIVERS)
----------
CLASS Y
For the six month
period ended
<S> <C>
December 31, 1997** 5.20%
For the year ended
June 30, 1997 4.94%
For the year ended
June 30, 1996 4.85%
For the year ended
June 30, 1995 4.71%
For the year ended
June 30, 1994 2.56%
For the year ended
June 30, 1993 2.61%
For the year ended
June 30, 1992 4.31%
For the year ended
June 30, 1991 6.40%
For the period ended
June 30, 1990 (1) 7.72%
CLASS C
For the six month
period ended
December 31, 1997**(2) 5.05%
<FN>
- ------------------
* RETURN IS FOR THE PERIOD INDICATED AND HAS NOT BEEN ANNUALIZED.
** RATIOS FOR THE SIX MONTH PERIOD ENDED DECEMBER 31, 1997 HAVE BEEN ANNUALIZED.
(1) THE ELITE CASH RESERVE CLASS Y COMMENCED OPERATIONS ON DECEMBER 10, 1991.
RATIOS FOR THIS PERIOD HAVE BEEN ANNUALIZED.
(2) THE ELITE CASH RESERVE CLASS C COMMENCED OPERATIONS ON DECEMBER 18, 1997.
+ THIS FUND WAS FORMERLY KNOWN AS THE FIDUCIARY CASH RESERVE
</FN>
</TABLE>
See accompanying notes to financial statements.
25
<PAGE>
<TABLE>
<CAPTION>
FINANCIAL HIGHLIGHTS COREFUND ELITE MONEY MARKET FUNDS
- ---------------------------------------------------------------------------------------------------------------------------
December 31, 1997 (Unaudited)
ELITE TAX-FREE RESERVE+
- ---------------------------------------------------------------------------------------------------------------------------
For a Share Outstanding Throughout the Period
RATIO
NET NET RATIO OF EXPENSES
ASSET DISTRIBUTIONS NET ASSETS RATIO OF NET TO AVERAGE
VALUE NET FROM NET ASSET VALUE END OF EXPENSES INCOME NET ASSETS
BEGINNING INVESTMENT INVESTMENT END TOTAL OF PERIOD TO AVERAGE TO AVERAGE (EXCLUDING
OF PERIOD INCOME INCOME OF PERIOD RETURN (000) NET ASSETS NET ASSETS WAIVERS)
--------- ---------- ------------- ------------ ------ --------- ----------- ---------- -----------
CLASS Y
For the six month
period ended
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
December 31, 1997** $1.00 0.03 (0.03) $1.00 1.78%* $202,230 0.18% 3.52% 0.48%
For the year ended
June 30, 1997 $1.00 0.03 (0.03) $1.00 3.42%$ 147,311 0.17% 3.39% 0.50%
For the year ended
June 30, 1996 $1.00 0.03 (0.03) $1.00 3.51%$ 86,477 0.16% 3.44% 0.76%
For the year ended
June 30, 1995 $1.00 0.03 (0.03) $1.00 3.41%$ 72,593 0.19% 3.37% 0.83%
For the year ended
June 30, 1994 $1.00 0.02 (0.02) $1.00 2.32%$ 78,219 0.17% 2.29% 0.82%
For the year ended
June 30, 1993 $1.00 0.02 (0.02) $1.00 2.48%$ 48,424 0.19% 2.45% 0.83%
For the period ended
June 30, 1992 (1) $1.00 0.02 (0.02) $1.00 1.50%* $ 66,158 0.17% 3.00% 0.89%
For the six month
period ended
December 31, 1997** $1.00 0.03 (0.03) $1.00 1.78%* $202,230 0.18% 3.52% 0.48%
CLASS C
For the six month
period ended
December 31, 1997**(2) $1.00 0.01 (0.01) $1.00 0.13%* $1,029 0.43% 3.27% 0.73%
RATIO OF
NET INCOME
TO AVERAGE
NET ASSETS
(EXCLUDING
WAIVERS)
----------
CLASS Y
For the six month
period ended
<S> <C>
December 31, 1997** 3.22%
For the year ended
June 30, 1997 3.06%
For the year ended
June 30, 1996 2.84%
For the year ended
June 30, 1995 2.73%
For the year ended
June 30, 1994 1.64%
For the year ended
June 30, 1993 1.81%
For the period ended
June 30, 1992 (1) 2.28%
For the six month
period ended
December 31, 1997** 3.22%
CLASS C
For the six month
period ended
December 31, 1997**(2) 2.97%
<FN>
- --------------------
* RETURN IS FOR THE PERIOD INDICATED AND HAS NOT BEEN ANNUALIZED.
** RATIOS FOR THE SIX MONTH PERIOD ENDED DECEMBER 31, 1997 HAVE BEEN ANNUALIZED.
(1) THE ELITE TAX-FREE RESERVE CLASS Y COMMENCED OPERATIONS ON NOVEMBER 19, 1991.
RATIOS FOR THIS PERIOD HAVE BEEN ANNUALIZED.
(2) THE ELITE TAX-FREE RESERVE CLASS C COMMENCED OPERATIONS ON DECEMBER 18, 1997.
+ THIS FUND WAS FORMERLY KNOWN AS THE FIDUCIARY TAX-FREE RESERVE.
</FN>
</TABLE>
See accompanying notes to financial statements.
26
<PAGE>
NOTES TO FINANCIAL STATEMENTS COREFUND ELITE MONEY MARKET FUNDS
- --------------------------------------------------------------------------------
December 31, 1997 (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:
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 FUNDS:
Short Term Income Fund
Short-Intermediate Bond Fund
Government Income Fund
Bond Fund
Global Bond Fund
Intermediate Municipal Bond Fund
Pennsylvania Municipal Bond Fund
New Jersey Municipal Bond Fund
The financial statements included herein present only those of the Elite
Treasury Reserve. The financial statements of the remaining Funds are presented
separately. The assets of each Fund are segregated, and a shareholder's interest
is limited to the Fund in which shares are held. The Fund's prospectus provides
a description of the Fund's investment objectives, policies and strategies.
2. SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies followed by the
Elite Treasury Reserve.
SECURITY VALUATION -- Investment securities of the Elite Treasury Reserve are
stated at amortized cost which approximates market value. Under this valuation
method, purchase discounts and premiums are accreted and amortized ratably to
maturity and are included in interest income.
27
<PAGE>
NOTES TO FINANCIAL STATEMENTS (CONTINUED) COREFUND ELITE MONEY MARKET FUNDS
- --------------------------------------------------------------------------------
December 31, 1997 (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, Elite Cash Reserve and Elite Tax-Free Reserve. Advisory fees are
computed daily and paid monthly for all Funds. Additionally, for the six month
period ended December 31, 1997, CSIA has voluntarily waived a portion of their
fees in order to assist the Funds in maintaining competitive expense ratios.
28
<PAGE>
NOTES TO FINANCIAL STATEMENTS (CONTINUED) COREFUND ELITE MONEY MARKET FUNDS
- --------------------------------------------------------------------------------
December 31, 1997 (Unaudited)
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 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, Elite Cash Reserve and Elite
Tax-Free Reserve. Such a fee is computed daily and paid monthly for all Funds.
Additionally, for the six month period ended December 31, 1997, SFR has
voluntarily waived a portion of their fees in order to assist the Fund in
maintaining a competitive expense ratio.
Effective for the period July 1, 1995 to November 16, 1995, SEI Investments
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 Investments Distribution Co., also a wholly-owned
subsidiary of SEI Corporation, became the Fund's exclusive Distributor pursuant
to a distribution agreement dated October 30, 1992.
Certain officers of the Company are also officers of the Administrator. Such
officers are not paid fees by the Fund.
The Fund has paid legal fees to a law firm in which the secretary of the Company
is a partner.
29
<PAGE>
NOTES TO FINANCIAL STATEMENTS (CONTINUED) COREFUND ELITE MONEY MARKET FUNDS
- --------------------------------------------------------------------------------
December 31, 1997 (Unaudited)
5. INVESTMENT COMPOSITION
The Fund invests in securities which include revenue and general obligation
instruments.
At December 31, 1997, the revenue sources by purpose were as follows:
% OF PORTFOLIO
INVESTMENTS
--------------
REVENUE INSTRUMENTS
Education Bonds ..................................... 5%
Hospital & Health Care Bonds ........................ 12
Housing Bonds ....................................... 5
Industrial Development Bonds ........................ 8
Other Bonds ......................................... 5
Pollution Control Bonds ............................. 16
Transportation Bonds ................................ 4
Utility Bonds ....................................... 3
TAX EXEMPT COMMERCIAL PAPER .................................. 29
GENERAL OBLIGATIONS .......................................... 7
TAX & REVENUE ANTICIPATION NOTES ............................. 6
-----
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.
30
<PAGE>
NOTES TO FINANCIAL STATEMENTS (CONCLUDED) COREFUND ELITE MONEY MARKET FUNDS
- --------------------------------------------------------------------------------
December 31, 1997 (Unaudited)
6. PROPOSED REORGANIZATION
On November 18, 1997, CoreStates Financial Corp. and First Union
Corporation jointly announced that they had signed a definitive agreement for
the merger of CoreStates Bank, N.A. and First Union Bank. The Advisor is
currently a wholly-owned subsidiary of CoreStates Bank, N.A. Subject to certain
conditions, it is anticipated that the transaction will close at the end of
April, 1998. Thereafter, the Advisor will be an indirect wholly-owned subsidiary
of First Union Bank. A special meeting of shareholders will be called to
consider certain proposed fund reorganizations.
31
<PAGE>
NOTES
- --------------------------------------------------------------------------------
32
<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-059-02
