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<PAGE> PAGE 2
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<PAGE> PAGE 4
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<PAGE> PAGE 5
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<PAGE> PAGE 6
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<PAGE> PAGE 7
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<PAGE> PAGE 8
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<PAGE> PAGE 9
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<PAGE> PAGE 10
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<PAGE> PAGE 11
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<PAGE> PAGE 12
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<PAGE> PAGE 13
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<PAGE> PAGE 14
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<PAGE> PAGE 15
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<PAGE> PAGE 16
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<PAGE> PAGE 17
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<PAGE> PAGE 18
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<PAGE> PAGE 19
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070 J020400 N
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<PAGE> PAGE 22
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<PAGE> PAGE 23
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015 A000501 FIRSTAR TRUST COMPANY
015 B000501 C
015 C010501 MILWAUKEE
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015 E010501 X
024 000500 N
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<PAGE> PAGE 24
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<PAGE> PAGE 25
054 D000500 Y
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054 F000500 Y
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054 H000500 Y
054 I000500 Y
054 J000500 Y
054 K000500 Y
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<PAGE> PAGE 26
070 A020500 Y
070 B010500 Y
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070 H020500 N
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070 I020500 N
070 J010500 Y
070 J020500 N
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070 K020500 N
070 L010500 Y
070 L020500 Y
070 M010500 N
070 M020500 N
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070 R020500 N
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<PAGE> PAGE 27
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<PAGE> PAGE 28
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015 A000601 FIRSTAR TRUST COMPANY
015 B000601 C
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024 000600 Y
025 A000601 SALOMON, INC.
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025 C000602 D
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025 A000603 CITICORP MORTGAGE SECURITIES, INC.
025 C000603 D
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<PAGE> PAGE 29
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<PAGE> PAGE 30
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<PAGE> PAGE 31
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070 J020600 N
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070 L020600 Y
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070 N020600 N
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070 P010600 N
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070 R020600 N
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<PAGE> PAGE 32
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<PAGE> PAGE 33
076 000600 0.00
015 A000701 FIRSTAR TRUST COMPANY
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024 000700 Y
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<PAGE> PAGE 34
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<PAGE> PAGE 35
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<PAGE> PAGE 36
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<PAGE> PAGE 37
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015 A000801 FIRSTAR TRUST COMPANY
015 B000801 C
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015 C020801 WI
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024 000800 Y
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<PAGE> PAGE 38
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<PAGE> PAGE 39
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<PAGE> PAGE 40
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<PAGE> PAGE 41
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<PAGE> PAGE 42
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SIGNATURE GRACIE FERMELIA
TITLE SECRETARY
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000759829
<NAME> HOTCHKIS & WILEY FUNDS
<SERIES>
<NUMBER> 1
<NAME> BALANCED INCOME FUND
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<S> <C>
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</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000759829
<NAME> HOTCHKIS & WILEY FUNDS
<SERIES>
<NUMBER> 2
<NAME> SMALL CAP FUND
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<TABLE> <S> <C>
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<CIK> 0000759829
<NAME> HOTCHKIS & WILEY FUNDS
<SERIES>
<NUMBER> 3
<NAME> EQUITY INCOME FUND
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<S> <C>
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</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000759829
<NAME> HOTCHKIS & WILEY FUNDS
<SERIES>
<NUMBER> 4
<NAME> INTERNATIONAL FUND
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</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000759829
<NAME> HOTCHKIS & WILEY FUNDS
<SERIES>
<NUMBER> 5
<NAME> EQUITY FUND FOR INSURANCE COMPANIES
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<S> <C>
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</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000759829
<NAME> HOTCHKIS & WILEY FUNDS
<SERIES>
<NUMBER> 6
<NAME> LOW DURATION FUND
<MULTIPLIER> 1000
<S> <C>
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<FISCAL-YEAR-END> JUN-30-1996
<PERIOD-START> JUL-01-1995
<PERIOD-END> JUN-30-1996
<INVESTMENTS-AT-COST> 186,776
<INVESTMENTS-AT-VALUE> 187,546
<RECEIVABLES> 2,927
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<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 190,473
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<SHARES-COMMON-STOCK> 18,700
<SHARES-COMMON-PRIOR> 12,146
<ACCUMULATED-NII-CURRENT> 290
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> (3)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 770
<NET-ASSETS> 189,161
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 12,312
<OTHER-INCOME> 0
<EXPENSES-NET> 931
<NET-INVESTMENT-INCOME> 11,381
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<APPREC-INCREASE-CURRENT> (604)
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<DISTRIBUTIONS-OF-INCOME> 11,386
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<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 18,412
<NUMBER-OF-SHARES-REDEEMED> 12,867
<SHARES-REINVESTED> 1,009
<NET-CHANGE-IN-ASSETS> 65,841
<ACCUMULATED-NII-PRIOR> 693
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 706
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 961
<AVERAGE-NET-ASSETS> 160,543
<PER-SHARE-NAV-BEGIN> 10.15
<PER-SHARE-NII> 0.68
<PER-SHARE-GAIN-APPREC> 0.06
<PER-SHARE-DIVIDEND> 0.72
<PER-SHARE-DISTRIBUTIONS> 0.05
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 10.12
<EXPENSE-RATIO> 0.58
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000759829
<NAME> HOTCHKIS & WILEY FUNDS
<SERIES>
<NUMBER> 7
<NAME> SHORT-TERM INVESTMENT FUND
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> JUN-30-1996
<PERIOD-START> JUL-01-1996
<PERIOD-END> JUN-30-1996
<INVESTMENTS-AT-COST> 18,520
<INVESTMENTS-AT-VALUE> 18,585
<RECEIVABLES> 259
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 18,844
<PAYABLE-FOR-SECURITIES> 0
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<TOTAL-LIABILITIES> 118
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 18,746
<SHARES-COMMON-STOCK> 1,841
<SHARES-COMMON-PRIOR> 1,957
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> (85)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 65
<NET-ASSETS> 18,726
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 1,242
<OTHER-INCOME> 0
<EXPENSES-NET> 85
<NET-INVESTMENT-INCOME> 1,157
<REALIZED-GAINS-CURRENT> 17
<APPREC-INCREASE-CURRENT> 73
<NET-CHANGE-FROM-OPS> 1,247
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<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 1,435
<NUMBER-OF-SHARES-REDEEMED> 1,614
<SHARES-REINVESTED> 63
<NET-CHANGE-IN-ASSETS> (1,086)
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 71
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 155
<AVERAGE-NET-ASSETS> 17,699
<PER-SHARE-NAV-BEGIN> 10.12
<PER-SHARE-NII> 0.66
<PER-SHARE-GAIN-APPREC> 0.05
<PER-SHARE-DIVIDEND> 0.66
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 10.17
<EXPENSE-RATIO> 0.48
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000759829
<NAME> HOTCHKIS & WILEY FUNDS
<SERIES>
<NUMBER> 8
<NAME> TOTAL RETURN BOND FUND
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> JUN-30-1996
<PERIOD-START> JUL-01-1995
<PERIOD-END> JUN-30-1996
<INVESTMENTS-AT-COST> 43,568
<INVESTMENTS-AT-VALUE> 42,985
<RECEIVABLES> 730
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 43,715
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 295
<TOTAL-LIABILITIES> 295
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 43,689
<SHARES-COMMON-STOCK> 3,396
<SHARES-COMMON-PRIOR> 1,181
<ACCUMULATED-NII-CURRENT> 80
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 234
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> (583)
<NET-ASSETS> 43,420
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 2,227
<OTHER-INCOME> 0
<EXPENSES-NET> 193
<NET-INVESTMENT-INCOME> 2,034
<REALIZED-GAINS-CURRENT> 386
<APPREC-INCREASE-CURRENT> (1,233)
<NET-CHANGE-FROM-OPS> 1,187
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 2,034
<DISTRIBUTIONS-OF-GAINS> 240
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 2,396
<NUMBER-OF-SHARES-REDEEMED> 319
<SHARES-REINVESTED> 138
<NET-CHANGE-IN-ASSETS> 28,132
<ACCUMULATED-NII-PRIOR> 167
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 165
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 278
<AVERAGE-NET-ASSETS> 28,417
<PER-SHARE-NAV-BEGIN> 12.94
<PER-SHARE-NII> 0.84
<PER-SHARE-GAIN-APPREC> 0.06
<PER-SHARE-DIVIDEND> 0.93
<PER-SHARE-DISTRIBUTIONS> 0.13
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 12.78
<EXPENSE-RATIO> 0.68
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
August 16, 1996
To the Board of Directors of Hotchkis and Wiley Funds
In planning and performing our audits of the financial
statements of the Equity Income Fund, the Small Cap Fund,
the International Fund, the Balanced Income Fund, the Total
Return Bond Fund, the Low Duration Fund, the Short-Term
Investment Fund and the Equity Fund for Insurance Companies
(constituting Hotchkis and Wiley Funds, hereafter referred to
as the "Funds") for the year ended June 30, 1996, we considered
the Funds' internal control structure, including procedures for
safeguarding securities, in order to determine our auditing
procedures for the purposes of expressing our opinion on the
financial statements and to comply with the requirements of Form
N-SAR, and not to provide assurance on the internal control
structure.
The management of the Funds is responsible for establishing and
maintaining an internal control structure. In fulfilling this
responsibility, estimates and judgments by management are required
to assess the expected benefits and related costs of internal
control structure policies and procedures. Two of the objectives
of an internal control structure are to provide management with
reasonable, but not absolute, assurance that assets are
appropriately safeguarded against loss from unauthorized use or
disposition and that transactions are executed in accordance with
management's authorization and recorded properly to permit preparation
of financial statements in conformity with generally accepted
accounting principles.
Because of inherent limitations in any internal control structure,
errors or irregularities may occur and may not be detected. Also,
projection of any evaluation of the structure to future periods is
subject to the risk that it may become inadequate because of changes
in conditions or that the effectiveness of the design and operation
may deteriorate.
Our consideration of the internal control structure would not
necessarily disclose all matters in the internal control structure
that might be material weaknesses under standards established by
the American Institute of Certified Public Accountants. A material
weakness is a condition in which the design or operation of the
specific internal control structure elements does not reduce to a
relatively low level the risk that errors or irregularities in
amounts that would be material in relation to the financial
statements being audited may occur and not be detected within a
timely period by employees in the normal course of performing their
assigned functions. However, we noted no matters involving the
internal control structure, including procedures for safeguarding
securities, that we consider to be material weaknesses as defined
above as of June 30, 1996.
This report is intended solely for the information and use of
management and the Securities and Exchange Commission.
PRICE WATERHOUSE LLP
