<PAGE>
SEMI-ANNUAL
REPORT
[LOGO]
RSI RETIREMENT TRUST
CORE EQUITY FUND
VALUE EQUITY FUND
EMERGING GROWTH EQUITY FUND
INTERNATIONAL EQUITY FUND
ACTIVELY MANAGED BOND FUND
INTERMEDIATE-TERM BOND FUND
SHORT-TERM INVESTMENT FUND
1998
BROKER/DEALER
[LOGO]
RETIREMENT SYSTEM
Distributors Inc.
P.O. Box 2064
Grand Central Station
New York, NY 10163-2064
<PAGE>
TABLE OF CONTENTS
- ------------------------------------------------------
<TABLE>
<S> <C>
President's Message...................................................... 1
Investment Review........................................................ 2
Financial Statements of Investment Funds................................. 9
Core Equity Fund..................................................... 11
Value Equity Fund.................................................... 15
Emerging Growth Equity Fund.......................................... 19
International Equity Fund............................................ 23
Actively Managed Bond Fund........................................... 27
Intermediate-Term Bond Fund.......................................... 33
Short-Term Investment Fund........................................... 39
Notes to Financial Statements............................................ 43
Officers, Consultants, Investment Managers,
Custodians, Distributor, Transfer Agent................................ 60
Board of Trustees........................................................ 61
</TABLE>
[LOGO]
is a registered trademark of Retirement System Group Inc.
This Semi-Annual Report is unaudited.
<PAGE>
PRESIDENT'S MESSAGE
To Our Unitholders:
The first three months of fiscal year 1998 (i.e., fourth
quarter 1997) were affected by concern over an overheated
domestic economy, an underlying fear of inflation, and
uncertainty about the Asian markets. These were all
contributing factors which influenced the equity markets, most
of which showed negative results during the fourth quarter of
1997. Large cap stocks, as measured by the S&P 500 Index, were
the exception, managing to return 2.85% during this period.
Small cap growth stocks (Russell 2000 Growth Index) and
non-U.S. stocks (MSCI EAFE Index, a representative proxy for
non-U.S. stocks), on the other hand, were the most volatile,
down 8.20% and 7.84%, respectively, for this period.
However, the second three months of fiscal year 1998
provided a major turnaround, with all of the major domestic
equity indices and MSCI EAFE showing strong double digit
returns. EAFE achieved the best investment performance,
returning 14.71%, followed by the S&P 500's return of 13.96%.
During this same period, the Russell 2000 Growth returned
11.88%. The U.S. economy continued to prosper and most of the
major European countries also showed positive economic growth
during the period.
Thus far in fiscal year 1998, the conditions that have
persisted over the past several years--moderate economic
growth, low inflation rates, favorable interest rates, heavy
corporate stock repurchases and substantial cash inflow by
mutual fund investors--have continued, thereby driving the
stock market. As always, the direction of the stock market is
uncertain, and ultimately will reflect the strength of the
underlying U.S. economy.
The Trust's funds turned in solid performances thus far in
fiscal 1998, with four of the seven funds outperforming their
respective Lipper benchmarks for the period. The funds also
performed well over the longer time periods--the time periods
that are all important when investing retirement plan assets.
In fact, three of the seven funds exceeded their Lipper
benchmarks for every time period covered in this report, and
five of the funds outperformed their benchmarks for the longest
time period listed, 15 years. (Our International Equity Fund
has been in existence for less than 15 years.)
On behalf of the Board of Trustees, I want to thank our
unitholders for choosing RSI Retirement Trust to help meet your
retirement savings goals. I would also like to thank the
members of the Board for their valuable counsel and assistance.
Without their diligence and guidance, the solid investment
performances achieved by our funds would not be possible.
Sincerely,
[SIG]
William Dannecker
President and Trustee
May 21, 1998
1
<PAGE>
INVESTMENT REVIEWEQUITY FUNDS
For the first three months of fiscal year 1998, most of the
domestic and non-U.S. equity market indices showed negative
results, with the exception of large cap stocks, as measured by
the Standard & Poor's 500 Index (S&P 500) and the Russell 1000
Value Index, which were up 2.85% and 4.47%, respectively. Small
cap growth stocks (Russell 2000 Growth Index) and non-U.S.
stocks (MSCI EAFE Index--EAFE) were the most volatile, down
8.20% and 7.84%, respectively, for this period. The concern of
an overheated domestic economy, the underlying fear of
inflation coupled with the uncertainty of the Asian markets,
and the underlying strength of the major European economies
were all contributing factors which impacted the equity markets
for the first quarter of fiscal year 1998.
However, the second three months of fiscal year 1998
provided a major turnaround--all of the major domestic equity
indices and EAFE, a representative proxy for non-U.S. stocks,
showed strong double digit returns. EAFE led the way with a
return of 14.71%, followed closely by the large cap
indices--S&P 500, at 13.96%, and Russell 1000 Value, at 11.66%.
The small capitalization company indices (Russell 2000, a blend
of value and growth stocks and the Russell 2000 Growth) were
strong at 10.06% and 11.88%, respectively. For this period,
most of the major European countries showed positive economic
growth. This was true of the U.S. economy as well; inflation
fears were dormant, reported company profits, for the most
part, showed strength, and technology stocks (both small cap
and large cap) performed quite well.
Overall, for the six-month period ended March 31, 1998,
domestic investors appeared to like the security afforded by
large cap growth and value stocks, which experienced strong
double digit returns for this period, with the S&P 500 up
17.21% and the Russell 1000 Value Index rising 16.64%. However,
despite the recovery of the equity capital markets for the
first quarter of 1998, small cap growth stocks (Russell 2000
Growth) and non-U.S. stocks (as measured by EAFE) for the
trailing six months were lackluster, with returns of 2.71% and
5.72%, respectively. This was the result of the severity of the
fourth quarter, 1997 negative results.
As noted at this time last year, moderate economic growth,
low inflation rates, favorable interest rates, heavy corporate
stock repurchases and cash inflow by mutual fund investors
continue to propel the stock market, a situation that has
persisted over the past several years. Thus far in fiscal year
1998, this trend has continued.
Economic growth (Gross Domestic Product, or "GDP") was
strong, growing at an annualized rate of 3.7% for the fourth
quarter 1997 (versus 3.8% for the fourth quarter, 1996). The
momentum continued for the first quarter of 1998 with GDP
reported at 4.2%, annualized.
Subsequent to March 31, 1998, the U.S. stock markets
continued to advance. However, during the last week of April,
daily changes were most pronounced. On April 28, an approximate
2% correction was realized, due to fears that the Federal
Reserve may take action to increase interest rates in an
attempt to impact the U.S. economy, since the Asian financial
crisis has failed to slow the economic growth as
2
<PAGE>
expected. Other news was forthcoming later in the week (i.e.,
economic growth in the U.S. was stronger than expected for the
first quarter, with GDP up at a 4.2% annual rate while
inflation fell to 1950s levels) and the stock and bond markets
surged and offset the earlier 2% correction.
However, concerns about the Asian crisis, increased
earnings disappointments and high earnings valuations could
become a more pronounced issue versus the mood of complacency
that held sway earlier this year. The risks are that earnings
and profit margin pressures will intensify as U.S. companies
feel pressure from Asian competitors to cut prices. Labor costs
are rising and companies are grappling with the year 2000
problem. Earnings also will be negatively impacted by adverse
foreign currency translations and weak exports. After years of
restructuring and productivity improvements, companies appear
to be running out of ways to expand their profit margins.
For the six months ended March 31, 1998 (as was the case
also for the six months ended March 31, 1997), the Trust's
large cap equity funds (Core and Value) turned in respectable
double digit performance results, with the International Equity
Fund up modestly. The Emerging Growth Equity Fund was hit
hardest, as small cap growth stocks faltered, and finished down
3.67%.
CORE EQUITY FUND
The Core Equity Fund posted a 14.79% return for the six months
ended March 31, 1998, compared to the 12.55% return of the
Lipper Growth and Income Funds Average, its performance
benchmark. For the one-year period ended March 31, 1998, the
Core Fund returned 44.22%, more than four percentage points
higher than the 40.15% return of its Lipper benchmark. With a
31.67% annual return for the three years ended March 31, 1998,
the Fund significantly outperformed its benchmark's return of
27.89%. This performance ranked the Core Fund in the top 14% of
its Lipper grouping (56th out of 426 funds). Over the longer
period (15 years ended March 31, 1998), the Core Fund achieved
a 17.23% annualized return, outperforming the 15.15% return of
the Lipper Growth and Income Funds Average. This annualized
return ranked the Core Equity Fund in the top 13 % of the
Lipper Growth and Income Funds grouping (11th out of 85 funds).
These long-term results for the Core Equity Fund have been
achieved while taking less risk (as measured by standard
deviation) than the overall market, as represented by the S&P
500. The standard deviation of return for the Fund was 13.58
versus 13.95 for the index over this 15-year period.
VALUE EQUITY FUND
The Value Equity Fund posted a 12.29% return for the fiscal
year-to-date, ended March 31, 1998, compared to the 12.55%
return of its performance benchmark, the Lipper Growth & Income
Funds Average. For the one-year period ended March 31, 1998,
the Value Equity returned 43.90%, outperforming the Lipper
benchmark's return of 40.15% by a substantial margin. With this
performance, the Value Fund ranked in the top 29% of its Lipper
grouping (186th out of 646 funds). For the
3
<PAGE>
three years ended March 31, 1998, the Fund's annualized return
of 31.25% placed it in the top 16% of its Lipper grouping (66th
out of 426 funds). (It should be noted that Retirement System
Investors commenced managing the Fund on April 1, 1995.) For
the five years ended March 31, 1998, the Value Fund recorded an
annualized return of 20.29%, compared to the 19.08% annualized
return of its benchmark. For the longer time periods, this Fund
underperformed versus its Lipper benchmark.
EMERGING GROWTH EQUITY FUND
The Emerging Growth Equity Fund returned -3.67% for the six
months ended March 31, 1998, while its benchmark, the Lipper
Small Company Growth Funds Average, returned 5.39%. For the
three-year period ended March 31, 1998, the Fund returned
26.81% per year, outperforming the 24.88% of its Lipper
benchmark. The Fund reflected an annualized return of 22.16%
for the five-year period ended March 31, 1998, and ranked in
the top 10% of its Lipper grouping (15th out of 154 funds). For
the 15 years ended March 31, 1998, the Emerging Growth Equity
Fund achieved an annual return of 15.82%, outperforming the
benchmark's return of 12.97% for the same period. This
performance ranked the Fund in the top 17% of the Lipper Small
Company Growth Funds grouping (3rd out of 18 funds).
INTERNATIONAL EQUITY FUND
The International Equity Fund returned 23.7% for the six-month
period ended March 31, 1998, while the Lipper International
Equity Funds Average, the Fund's performance benchmark,
returned 5.85%. For the one-year period ended March 31, 1998,
the Fund returned 13.38%, while its Lipper benchmark returned
19.45%. For the three years ended March 31, 1998, the Fund had
an annualized return of 13.35%, trailing the Lipper
International Funds Average return of 14.06% per year for this
period. For the longer time periods (5 years, 10 years and
since inception, 13 11/12 years ended March 31, 1998), the Fund
also underperformed versus its Lipper benchmark.
However, it's important to note that the International
Equity Fund's 10-year return was achieved with appreciably less
risk (as measured by standard deviation) than the market, as
measured by the MSCI EAFE Index. The standard deviation of
return for the Fund was 12.46 versus 15.93 for the index over
this time period.
FIXED-INCOME FUNDS
In the fourth quarter of 1997, inflation was almost
non-existent, as the Consumer Price Index (i.e., Urban
Consumers seasonally adjusted data, as reported by the U.S.
labor Department--CPI) was up 0.1% for the quarter. It was a
period when interest rates in the intermediate and longer-term
maturities continued to decline, and at December 31, 1997, they
were at their low points of the year. Short interest rates
remained flat to slightly higher, and the yield curve
flattened. The bond market rallied as deflation in Asia and
other developing countries was seen as slowing the U.S. economy
and further reducing inflation. For the longer-term portion of
the yield curve, fixed-income total returns (interest plus
price changes), as measured by the Lehman Brothers Aggregate
Bond Index, rose 2.94% for the quarter. For the short- to-
intermediate-term securities (represented by the Lehman
Brothers
4
<PAGE>
Government-Intermediate Bond Index), the total quarterly return
was up 2.21%; cash equivalent-type investments (the 90-Day
Treasury Bills) increased 1.25% for this period.
During the first quarter of 1998 interest rates backed up
slightly in February and March, after declining in January, a
continuation of contraction that was evident, as noted above,
in the last quarter of 1997. However, at March 31, interest
rates were at lower positions than at the start of 1998. For
example, the six-month Treasury Bill declined to 5.24% from
5.42% at December 31, 1997; the 5-year Treasury decreased to
5.62% from 5.70%; the 10-year Treasury declined to 5.65% from
5.74%; and the 30-year Treasury was similar to its position at
December 31, 1997 at 5.93%. Stable to lower interest rates
again were aided by the prospect that deflation and weak
economies in Asia and other developing countries would slow the
U.S. economy and further reduce inflation.
CPI for the recent quarter was also a non-factor, up less
than 0.1%. As a result of the positive conditions that
prevailed during the first quarter, the bond markets reflected
respectable results and for the fiscal half year ending March
31, 1998, the Lehman Brothers Aggregate Bond Index returned
4.53% (1.54% for the quarter) and 3.75% for the Lehman Brothers
Government-Intermediate Bond Index (1.50% for the latest
quarter). Cash equivalent-type securities (90-Day US Treasury
Bills) returned 1.25% for the recent quarter and 2.51% for the
six months ended March 31, 1998.
INTERMEDIATE-TERM BOND FUND
For the six-month period ended March 31, 1998, the
Intermediate-Term Bond Fund returned 3. 26%, exceeding the
3.10% return of its benchmark, the Lipper Short-Intermediate (1
to 5 year maturity) U.S. Government Funds Average. Over every
longer term period, as well, this Fund outperformed its Lipper
benchmark. For the five-year period ended March 31, 1998, it
returned 5.43% per year, compared to the 5.05% annual return of
its benchmark. For the 15 years ended March 31, 1998, the Fund,
at an annualized return of 8.90%, outperformed its benchmark by
38 basis points per year (8.90% versus 8.52%, respectively),
and was the top performing fund in its Lipper grouping for this
period.
The Intermediate-Term Bond Fund continues to emphasize
quality of holdings, with over 99% in U.S. Government and other
AAA-rated securities. At March 31, 1998, the average maturity
and average duration of all portfolio holdings was 4.2 years
and 3.1 years, respectively, versus 4.5 years and 3.4 years,
respectively, at the start of fiscal year 1998.
ACTIVELY MANAGED BOND FUND
The Actively Managed Bond Fund outperformed its benchmark, the
Lipper U.S. Government Bond Funds Average, for every period
ended March 31, 1998. For the fiscal year-to-date, the Fund
returned 4.40% versus 4.34% for the Lipper benchmark. With an
annualized return of 8.89% for the three years ended March 31,
1998, the Fund ranked in the top 9% of its Lipper grouping
(13th out of 149 funds). For the
5
<PAGE>
five-year period ended March 31, 1998, the Fund outpaced the
benchmark return of 5.75% per year by 75 basis points per year,
with an annualized return of 6.50%. The Fund's annualized
return was 9.41% for the 15 years ended March 31, 1998, while
the Lipper benchmark was 8.67% per year. For the period, the
Fund ranked in the top 29% of the Lipper U.S. Government Bond
Funds grouping (2nd out of 7 funds).
The Fund continues to emphasize quality of holdings, with
more than 98% in U.S. Government and other AAA-rated
securities. At March 31, 1998, the average maturity and average
duration of portfolio holdings was 9.5 years and 5.9 years,
respectively, compared to 9.0 years and 5.8 years,
respectively, at the start of fiscal year 1998.
SHORT-TERM INVESTMENT FUND
For the six months ended March 31, 1998, the Short-Term
Investment Fund posted a return of 2.45%, versus the 2.44%
return of the Lipper Retail Money Funds Average (a
representative benchmark). The Fund achieved a 4.28% annual
return for the five-year period ended March 31, 1998,
comparable to the 4.43% return of its Lipper benchmark. For the
15 years ended March 31, 1998, the Fund produced an annual
return of 6.35%, exceeding the Lipper benchmark's annualized
return of 6.13%.
The Short-Term Investment Fund continues to emphasize
quality of holdings, with 92.7% in U.S. Government securities,
2.4% in AA-rated securities and 4.9% in A-rated issues. The
average maturity of portfolio holdings declined to 78 days at
March 31, 1998, from 120 days at September 30, 1997.
6
<PAGE>
EQUITY FUNDS
NET INVESTMENT PERFORMANCE1
FOR PERIODS ENDED MARCH 31, 1998
---------------------------------------------------------------
<TABLE>
<CAPTION>
Annualized
------------------------------------------------
6 Months 1 Year 3 Years 5 Years 10 Years 15 Years
----------- ---------- ---------- ---------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
CORE EQUITY FUND 14.79% 44.22% 31.67% 21.48% 17.81% 17.23%
VALUE EQUITY FUND 12.29 43.90 31.25 20.29 15.26 13.88
Lipper Growth &
Income Funds
Average3 12.55 40.15 27.89 19.08 16.21 15.15
EMERGING GROWTH
EQUITY FUND (3.67) 32.74 26.81 22.16 17.59 15.82
Lipper Small
Company Growth
Funds Average3 5.39 43.53 24.88 18.34 16.77 12.97
INTERNATIONAL
EQUITY FUND2 2.37 13.38 13.35 11.44 7.13 NA
Lipper
International
Equity Funds
Average3 5.85 19.45 14.06 13.28 10.08 NA
</TABLE>
1. All performance results shown are net of management fees
and all related expenses, unless otherwise footnoted.
2. The International Equity Fund was started on May 1, 1984.
The inception date for all other funds was January 1, 1983,
or 15 1/4 years for the period ended March 31, 1998.
3. Lipper Analytical Services is an independent reporting
service that measures the performance of most U.S. mutual
funds. The performance results reflect an unmanaged index
and are net of all expenses other than sales charges and
redemption fees.
---------------------------------------------------------------
7
<PAGE>
FIXED-INCOME FUNDS*
NET INVESTMENT PERFORMANCE1
FOR PERIODS ENDED MARCH 31, 1998
---------------------------------------------------------------
<TABLE>
<CAPTION>
Annualized
------------------------------------------------
6 Months 1 Year 3 Years 5 Years 10 Years 15 Years
------------ ---------- ---------- ---------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
INTERMEDIATE-TERM
BOND FUND 3.26% 8.56% 7.29% 5.43% 7.56% 8.90%
Lipper Short-
Intermediate
(1 to 5 year
maturity) U.S.
Government Funds
Average2 3.10 7.95 6.78 5.05 7.24 8.52
ACTIVELY MANAGED
BOND FUND 4.40 12.57 8.89 6.50 8.41 9.41
Lipper U.S.
Government Bond
Funds Average2 4.34 11.46 8.07 5.75 7.68 8.67
SHORT-TERM
INVESTMENT FUND 2.45 5.07 4.96 4.28 5.32 6.35
Lipper Retail Money
Funds Average 2.44 4.96 5.01 4.43 5.38 6.13
</TABLE>
* The inception date for all fixed-income funds was January
1, 1983, or 15 1/4 years for the period ended March 31,
1998.
1. All performance results shown are net of management fees
and all related expenses, unless otherwise footnoted.
2. Lipper Analytical Services is an independent reporting
service that measures the performance of most U.S. mutual
funds. The performance results reflect an unmanaged index
and are net of all expenses other than sales charges and
redemption fees.
---------------------------------------------------------------
8
<PAGE>
FINANCIAL STATEMENTS OF INVESTMENT FUNDS
RSI RETIREMENT TRUST
Combined Statement of Assets and Liabilities March 31, 1998
(Unaudited)
---------------------------------------------------------------
<TABLE>
<S> <C> <C>
ASSETS:
Investments in securities at value (Cost
$466,903,065)--Note 2 (A) $642,785,432
Cash 1,954,371
Receivable for investments sold 2,527,620
Receivable for units sold 407,983
Dividends and interest receivable 2,193,177
Other assets 96,966
Net gain on forward foreign currency
contracts 107,918
------------
650,073,467
LIABILITIES:
Payable for investments purchased $6,305,056
Options written, at value (premiums
received $77,351) 85,712
Payable for units redeemed 264,004
Payable to investment managers 270,188
Accrued expenses 519,936 7,444,896
---------- ------------
NET ASSETS--Note 5 $642,628,571
------------
------------
</TABLE>
Combined Statement of Operations Six Months Ended March 31,
1998 (Unaudited)
---------------------------------------------------------------
<TABLE>
<S> <C> <C>
INVESTMENT INCOME:
Income:
Interest $ 8,815,914
Dividends 2,269,077
-----------
Total Income $ 11,084,991
Expenses:
Investment manager's fees--Note 3(A) 1,660,166
Shareholder servicing fees and
expenses--Note 3(B) 1,319,083
Custodian fees and expenses 127,742
Legal and auditing fees 69,399
Consultant fees 45,309
Trustees' fees and expenses--Note 3(C) 104,541
Other 223,489
-----------
Total Expenses 3,549,729
Less fees paid indirectly--Note 4 (41,632)
Less expense reimbursement--Note 3(A) (63,885)
Net Expenses 3,444,212
------------
INVESTMENT INCOME--NET 7,640,779
REALIZED AND UNREALIZED GAIN ON INVESTMENTS,
STOCK OPTIONS, AND FOREIGN CURRENCIES--Note
4:
Net realized gain (loss) on:
Investments 44,187,617
Options written 54,249
Foreign currency transactions 167,735
-----------
44,409,601
-----------
Unrealized appreciation (depreciation) on:
Investments (10,908,134)
Options written 21,166
Foreign currency translations of other
assets and liabilities 73,417
-----------
(10,813,551)
-----------
NET REALIZED AND UNREALIZED GAIN ON
INVESTMENTS, FOREIGN CURRENCIES AND STOCK
OPTIONS 33,596,050
------------
NET INCREASE IN NET ASSETS RESULTING FROM
OPERATIONS $ 41,236,829
------------
------------
</TABLE>
See Notes to Financial Statements
9
<PAGE>
RSI RETIREMENT TRUST (CONTINUED)
Combined Statement of Changes in Net Assets
---------------------------------------------------------------
<TABLE>
<CAPTION>
Six Months
Ended Year Ended
3/31/98 9/30/97
(Unaudited) (Audited)
------------- -------------
<S> <C> <C>
OPERATIONS
Investment income--net $ 7,640,779 $ 16,104,518
Net realized gain 44,409,601 87,569,039
Net unrealized appreciation (10,813,551) 29,216,787
------------- -------------
Net increase in net assets resulting from operations 41,236,829 132,890,344
------------- -------------
CAPITAL TRANSACTIONS--Note 5
Value of units sold 92,640,582 134,275,808
Value of units redeemed (133,324,896) (277,141,568)
------------- -------------
Net (decrease) in net assets resulting from capital
transactions (40,684,314) (142,865,760)
------------- -------------
Net increase (decrease) 552,515 (9,975,416)
NET ASSETS at beginning of period 642,076,056 652,051,472
------------- -------------
NET ASSETS at end of period $ 642,628,571 $ 642,076,056
------------- -------------
------------- -------------
</TABLE>
See Notes to Financial Statements
10
<PAGE>
CORE EQUITY FUND
Statement of Investments
March 31, 1998 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Shares Value
- ----------- ------------
<C> <S> <C> <C>
COMMON STOCKS 95.1%
AEROSPACE 5.2%
145,000 Allied Signal Inc. $ 6,090,000
40,700 Lockheed Martin Corp. 4,578,750
------------
10,668,750
------------
BANKING 7.1%
55,300 BankAmerica Corp. 4,569,162
32,788 Chase Manhattan Corp. 4,422,282
38,900 Citicorp 5,523,800
------------
14,515,244
------------
BUILDING PRODUCTS 4.3%
90,500 Armstrong World
Industries Inc. 7,833,906
22,000 Martin Marietta Materials 950,125
------------
8,784,031
------------
CHEMICALS 2.7%
81,000 E.I. Du Pont De Nemours &
Company 5,508,000
------------
COMPUTER SYSTEMS 6.0%
89,500 EMC Corp.* 3,384,218
84,800 Hewlett Packard Corp. 5,374,200
34,000 International Business
Machines Corp. 3,531,750
------------
12,290,168
------------
DRUG AND HEALTH CARE 9.5%
164,500 Johnson & Johnson 12,059,906
57,800 Merck & Company, Inc. 7,420,075
------------
19,479,981
------------
ELECTRONICS AND
ELECTRICAL 9.7%
38,100 Cisco Systems Inc.* 2,605,088
300 Dallas Semiconductor 10,088
115,300 Emerson Electric Company 7,516,118
3,600 General Electric Corp. 310,275
122,500 Intel Corp. 9,555,000
------------
19,996,569
------------
ENERGY 12.0%
38,400 Amoco Corp. 3,316,800
120,400 Dresser Industries Inc. 5,786,725
155,600 Royal Dutch Petroleum
Company 8,840,025
113,800 Texaco Inc. 6,856,450
------------
24,800,000
------------
FINANCIAL SERVICES 7.8%
170,000 Federal National Mortgage
Association 10,752,500
2,000 Morgan (J.P.) & Company
Inc. 268,625
35,800 Sunamerica, Inc. 1,713,925
41,400 Sunamerica, Inc.
Non-Voting Pfd. 2,005,312
<CAPTION>
Shares Value
- ----------- ------------
<C> <S> <C> <C>
22,100 Travelers Group, Inc. $ 1,326,000
------------
16,066,362
------------
FOOD AND SERVICES 0.9%
37,100 Dole Food Co. 1,794,713
------------
HOUSEHOLD PRODUCTS 0.9%
20,900 Procter & Gamble Corp. 1,763,438
------------
INSURANCE 2.6%
57,100 Allstate Corp. 5,249,631
------------
MACHINERY/GENERAL 0.1%
6,700 Snap-On Tools Inc. 305,688
------------
MACHINERY AND ENGINEERING 3.3%
7,500 Cincinnati Milacron Inc. 239,063
29,700 Deere & Company 1,839,544
99,900 Ingersoll-Rand Corp. 4,788,955
------------
6,867,562
------------
MATERIALS AND SERVICES 0.1%
1,000 Southdown Inc. 69,688
------------
METALS AND MINING 1.5%
3,600 Aluminum Company of
America 247,725
30,500 Potash Corp of
Saskatchewan 2,771,688
------------
3,019,413
------------
MULTI INDUSTRY 0.4%
19,100 Philip Morris Companies
Inc. 796,231
------------
OFFICE AND BUSINESS
EQUIPMENT 4.7%
91,000 Xerox Corp. 9,685,813
------------
PHARMACEUTICALS 3.5%
71,800 Pfizer Inc. 7,157,563
------------
RETAIL 0.1%
900 Tiffany & Co. 43,819
------------
SOFTWARE 4.8%
26,800 Cadence Design Systems
Inc.* 927,950
72,375 Computer Associates
International, Inc. 4,179,655
1,000 Hyperion Software 44,125
149,300 Oracle Systems Corp.* 4,712,281
1,600 Sterling Commerce 74,200
------------
9,938,211
------------
TELECOMMUNICATIONS 7.9%
117,700 GTE Corp. 7,047,288
51,741 Lucent Technologies, Inc. 6,616,380
42,000 Tellabs Inc.* 2,819,250
------------
16,482,918
------------
Total Common and Preferred Stocks (Cost
$63,744,010) $195,283,793
------------
</TABLE>
See Notes to Financial Statements 11
<PAGE>
CORE EQUITY FUND (CONTINUED)
Statement of Investments
March 31, 1998 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Principal
Amount Value
- ----------- ------------
SHORT TERM INVESTMENTS
<C> <S> <C> <C>
REPURCHASE AGREEMENT 4.8%
$ 9,931,574 Bear Stearns & Co. Inc.
Dated 3/31/1998 5.80%
Due 4/1/98
collateralized by
$41,350,000 United
States Treasury Strips
Due 8/15/2021 (Value
$10,130,750) $ 9,931,574
------------
</TABLE>
<TABLE>
<CAPTION>
Expiration Date
# of /
Contracts Strike Price
- --------- ---------------
<C> <S> <C> <C> <C>
LONG PUT OPTIONS
20 S&P 500 May 1998 / 1040
Total Options (premiums paid $24,520) $ 22,000
------------
Total Investments (Cost $73,700,104) 100.0% $205,237,367
--- ------------
</TABLE>
<TABLE>
<CAPTION>
Expiration Date
# of /
Contracts Strike Price Value
- --------- --------------- ------------
<C> <S> <C> <C> <C>
WRITTEN COVERED CALL OPTIONS
20 Allstate Corp. Jul 1998 / 100 $ (6,250)
Federal National Mortgage
30 Assoc. Jun 1998 / 65 (7,687)
30 Intel Corp. Jul 1998 / 95 (3,750)
10 Intel Corp. Jul 1998 / 100 (750)
3 Intel Corp. Jan 1999 / 100 (1,200)
25 Johnson & Johnson Corp. Jul 1998 / 70 (15,000)
20 Merck & Co. Jul 1998 / 130 (15,750)
20 JP Morgan Jun 1998 / 130 (22,000)
10 Pfizer Corp. Sep 1998 / 95 (13,250)
------------
Total written call options (premiums received $75,955) $ (85,637)
------------
Other Assets, Less Liabilities 0.1% 165,991
--- ------------
Net Assets 100.0% $205,317,721
--- ------------
--- ------------
</TABLE>
*Denotes non-income producing security.
See Notes to Financial Statements 12
<PAGE>
CORE EQUITY FUND (CONTINUED)
Statement of Assets and Liabilities March 31, 1998 (Unaudited)
---------------------------------------------------------------
<TABLE>
<S> <C> <C>
ASSETS:
Investments in securities at value (Cost
$73,700,104)--Note 2(A) $205,237,367
Receivable for investments sold 84,687
Receivable for units sold 117,950
Dividends and interest receivable 162,090
Other assets 14,697
------------
205,616,791
LIABILITIES:
Payable for units redeemed $ 35,409
Options written, at value (premiums
received $79,755) 85,637
Payable to investment managers 89,846
Accrued expenses 88,178 299,070
-------- ------------
NET ASSETS at value, applicable to 2,349,879
outstanding units of
beneficial interest--Note 5 $205,317,721
------------
------------
NET ASSET VALUE offering and redemption price
per unit
($205,317,721 divided by 2,349,879 units) $ 87.37
------------
------------
</TABLE>
Statement of Operations Six Months Ended March 31, 1998
(Unaudited)
---------------------------------------------------------------
<TABLE>
<S> <C> <C>
INVESTMENT INCOME:
Income:
Dividends $ 1,465,654
Interest 77,661
-----------
Total Income $ 1,543,315
Expenses:
Investment manager's fees--Note 3(A) 521,326
Shareholder servicing fees and
expenses--Note 3(B) 323,576
Custodian fees and expenses 17,739
Legal and auditing fees 10,478
Consultant fees 6,495
Trustees' fees and expenses--Note 3(C) 13,145
Other 17,437
-----------
Total Expenses 910,196
------------
INVESTMENT INCOME--NET 633,119
REALIZED AND UNREALIZED GAIN (LOSS)--Note 4:
Net realized gain on:
Investments 31,258,586
Options written 25,437
-----------
31,284,023
-----------
Unrealized (depreciation) on:
Investments (4,484,735)
Options written (9,683)
-----------
(4,494,418)
-----------
NET REALIZED AND UNREALIZED GAIN 26,789,605
------------
NET INCREASE IN NET ASSETS RESULTING FROM
OPERATIONS $ 27,422,724
------------
------------
</TABLE>
See Notes to Financial Statements
13
<PAGE>
CORE EQUITY FUND (CONTINUED)
Statement of Changes in Net Assets
---------------------------------------------------------------
<TABLE>
<CAPTION>
Six Months
Ended Year Ended
3/31/98 9/30/97
(Unaudited) (Audited)
------------ ------------
<S> <C> <C>
OPERATIONS:
Investment income--net $ 633,119 $ 2,030,012
Net realized gain 31,284,023 45,193,447
Net unrealized appreciation (depreciation) (4,494,418) 19,327,785
------------ ------------
Net increase in net assets resulting from operations 27,422,724 66,551,244
------------ ------------
CAPITAL TRANSACTIONS--Note 5:
Value of units sold 13,341,210 25,795,510
Value of units redeemed (47,719,635) (97,429,664)
------------ ------------
Net (decrease) in net assets resulting from capital transactions (34,378,425) (71,634,154)
------------ ------------
Net (decrease) (6,955,701) (5,082,910)
NET ASSETS at beginning of period 212,273,422 217,356,332
------------ ------------
NET ASSETS at end of period $205,317,721 $212,273,422
------------ ------------
------------ ------------
</TABLE>
See Notes to Financial Statements
14
<PAGE>
VALUE EQUITY FUND
Statement of Investments
March 31, 1998 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Shares Value
- ----------- ------------
<C> <S> <C> <C>
COMMON STOCKS 90.9%
AEROSPACE 2.6%
21,000 Allied Signal Inc. $ 882,000
7,000 Lockheed Martin Corp. 787,500
3,300 United Technologies Corp. 304,631
------------
1,974,131
------------
AUTOMOBILES 2.6%
21,400 Chrysler Corp. 889,437
17,600 Ford Motor Co. 1,140,700
------------
2,030,137
------------
AUTOMOTIVE PRODUCTS 0.6%
5,700 Goodyear Tire 431,775
------------
BANKING 8.1%
2,800 Banc One Corp. 177,100
8,000 BankAmerica Corp. 661,000
15,400 Chase Manhattan Corp. 2,077,075
5,000 Citicorp 710,000
26,100 Mellon Bank Corp. 1,657,350
16,400 Royal Bank of Canada 969,650
------------
6,252,175
------------
BUSINESS AND PUBLIC
SERVICES 0.4%
8,000 US Filter Corp. 281,000
------------
COMPUTER SYSTEMS 5.3%
41,700 EMC Corp.* 1,576,780
16,000 International Business
Machines Corp. 1,662,000
20,400 Sun Microsystems Inc.* 850,425
------------
4,089,205
------------
CONSUMER GOODS AND
SERVICES 1.4%
21,900 Maytag Corporation 1,047,093
------------
DRUG AND HEALTH CARE 7.1%
18,760 Amgen* 1,142,015
21,400 Bristol-Myers Squibb
Company 2,232,288
9,700 Manor Care Inc. 358,900
10,500 Mylan Laboratories 241,500
41,475 Tenet Healthcare
Corporation* 1,506,061
------------
5,480,764
------------
ELECTRONICS AND
ELECTRICAL 2.5%
10,000 Berg Electronics Corp.* 256,875
13,000 Dallas Semiconductor 437,125
11,900 Intel Corp. 928,200
15,900 Kemet Corp.* 292,163
------------
1,914,363
------------
<CAPTION>
Shares Value
- ----------- ------------
<C> <S> <C> <C>
ENERGY 11.3%
13,800 British Petroleum $ 1,187,662
27,600 Burlington Resources 1,323,075
28,400 Diamond Offshore Drilling 1,288,650
17,900 Dresser Industries Inc. 860,319
2,000 Enron Oil & Gas Co. 45,875
7,700 Halliburton Co. 386,444
2,500 Mobil Corp. 191,563
26,700 Noble Drilling Corp. 816,019
4,500 Schlumberger, Ltd. 340,875
3,100 Texaco Inc. 186,775
33,200 Tosco Corporation 1,170,300
3,200 Ultramar Diamond Shamrock 112,800
33,100 Union Pacific Resources 790,263
------------
8,700,620
------------
ENTERTAINMENT 1.0%
24,300 Carmike Cinemas* 780,638
------------
FINANCIAL SERVICES 9.7%
9,900 Federal National Mortgage
Association 626,175
10,600 Merrill Lynch & Co. 879,800
13,900 Morgan Stanley Dean
Witter 1,012,963
12,400 Nationsbank Corp. 904,425
7,250 Sunamerica, Inc. 347,094
32,100 Sunamerica, Inc.
Non-Voting Pfd. 1,554,844
23,850 Travelers Group, Inc. 1,431,000
9,800 Washington Mutual 702,538
------------
7,458,839
------------
FOOD AND SERVICES 0.4%
6,200 Dole Food Co. 299,925
------------
FOREST PRODUCTS AND PAPER 0.2%
5,000 Mead Corp. 179,063
------------
INSURANCE 1.8%
14,200 Allstate Corp. 1,305,513
2,500 Hartford Life 116,405
------------
1,421,918
------------
MACHINERY / GENERAL 0.4%
6,000 Snap-On Tools Inc. 273,750
------------
MACHINERY AND ENGINEERING 1.3%
13,600 Cincinnati Milacron Inc. 433,500
8,900 Deere & Company 551,244
------------
984,744
------------
MATERIALS AND SERVICES 5.5%
11,400 Federal Express Corp.* 810,825
2,500 MS Carriers* 84,062
19,100 Medusa Corporation 1,167,488
</TABLE>
See Notes to Financial Statements 15
<PAGE>
VALUE EQUITY FUND (CONTINUED)
Statement of Investments
March 31, 1998 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Shares Value
- ----------- ------------
17,700 Southdown Inc. $ 1,233,469
<C> <S> <C> <C>
37,600 Werner Enterprises Inc. 963,500
------------
4,259,344
------------
MEDICAL SERVICES AND
DRUGS 3.1%
28,800 Beverly Enterprises, Inc. 383,400
101,000 Health & Retirement Prop.
Trust 2,032,625
------------
2,416,025
------------
METALS AND MINING 1.6%
10,100 Aluminum Company of
America 695,005
2,000 Phelps Dodge Corp. 129,125
4,300 Potash Corp of
Saskatchewan 390,763
------------
1,214,893
------------
MULTI INDUSTRY 0.8%
15,400 Philip Morris Companies
Inc. 641,987
------------
OFFICE AND BUSINESS
EQUIPMENT 2.1%
36,100 Lexmark Intl Group
Inc--Cl A* 1,629,012
------------
RETAIL 4.0%
20,600 Federated Department
Stores* 1,067,337
38,000 KMart Corporation 634,125
21,700 KMart Finan. Non-Voting
Conv. Prf. 1,361,675
------------
3,063,137
------------
SOFTWARE 1.1%
12,600 Cadence Design Systems
Inc.* 436,276
6,600 Computer Associates
International, Inc. 381,150
------------
817,426
------------
TECHNOLOGY 0.4%
7,900 Applied Materials, Inc.* 278,475
------------
TELECOMMUNICATIONS 9.2%
30,500 ADC Telecommunications* 838,750
16,600 Bell Atlantic Corp. 1,701,500
29,600 DSC Communications 536,500
27,000 GTE Corp. 1,616,625
11,400 SBC Communications 497,325
35,300 U S West Inc.* 1,932,675
------------
7,123,375
------------
TRANSPORTATION 0.5%
5,600 FDX Corp. 398,300
------------
<CAPTION>
Shares Value
- ----------- ------------
<C> <S> <C> <C>
UTILITIES 5.9%
16,300 Cinergy Corp. $ 603,100
15,600 Duke Power Co. 929,175
12,000 Nicor Inc. 507,000
14,400 Peoples Energy Corp. 523,800
28,600 US West Media Group 993,850
40,900 Washington Water Power
Company 1,002,050
------------
4,558,975
------------
Total Common and Preferred Stocks (Cost
$55,408,747) $ 70,001,089
------------
<CAPTION>
Principal
Amount
- -----------
<C> <S> <C> <C>
SHORT TERM INVESTMENTS
REPURCHASE AGREEMENT 10.0%
$ 7,723,294 Bear Stearns & Co. Inc.
Dated 3/31/1998 5.80%
Due 4/1/98
Collateralized by
$15,522,000 United
States Treasury Strips
Due 2/15/2022 (Value
$3,686,475) and United
States Treasury Strips
Due 2/15/1999 (Value
$1,124,316) and United
States Treasury Strips
Due 11/15/1998 (Value
$671,959) and United
States Treasury Strips
Due 5/15/2008 (Value
$2,396,815) $ 7,723,294
------------
</TABLE>
<TABLE>
<CAPTION>
# of Expiration Date
Contracts / Strike Price
- --------- ---------------
<C> <S> <C> <C> <C>
LONG PUT OPTIONS
3 S&P 500 Apr 1998 / 1060 2,250
3 S&P 500 Apr 1998 / 980 600
5 S&P 500 May 1998 / 1100 15,250
1 S&P 500 Sep 1998 / 1050 3,612
------------
Total long put options (premiums paid $34,150) $ 21,712
------------
Total Investments (Cost $63,166,190) 100.9% $ 77,746,095
------------
WRITTEN COVERED CALL OPTIONS
2 Intel Corp. Apr 1998 / 85 (63)
2 Intel Corp. Apr 1998 / 90 (12)
------------
Total written call options (premiums received $1,596) $ (75)
------------
Liabilities, net of other assets -0.9% (688,807)
----- ------------
Net Assets 100.0% $ 77,057,213
----- ------------
----- ------------
</TABLE>
*Denotes non-income producing security.
See Notes to Financial Statements 16
<PAGE>
VALUE EQUITY FUND (CONTINUED)
Statement of Assets and Liabilities March 31, 1998 (Unaudited)
---------------------------------------------------------------
<TABLE>
<S> <C> <C>
ASSETS:
Investments in securities at value (Cost
$63,166,190)--Note 2(A) $77,746,095
Receivable for investments sold 282,722
Receivable for units sold 77,280
Dividends and interest receivable 90,249
Other assets 24,518
-----------
78,220,864
LIABILITIES:
Payable for investments purchased $1,065,832
Options written, at value (premiums received $1,596) 75
Payable for units redeemed 14,124
Payable to investment managers 23,682
Accrued expenses 59,938 1,163,651
---------- -----------
NET ASSETS at value, applicable to 1,196,279 outstanding
units of
beneficial interest--Note 5 $77,057,213
-----------
-----------
NET ASSET VALUE offering and redemption price per unit
($77,057,213 divided by 1,196,279 units) $ 64.41
-----------
-----------
</TABLE>
Statement of Operations Six Months Ended March 31, 1998
(Unaudited)
---------------------------------------------------------------
<TABLE>
<S> <C> <C>
INVESTMENT INCOME:
Income:
Dividends $ 584,579
Interest 36,813
----------
Total Income $ 621,392
Expenses:
Investment manager's fees--Note 3(A) 126,080
Shareholder servicing fees and expenses--Note 3(B) 158,938
Custodian fees and expenses 20,637
Legal and auditing fees 9,413
Consultant fees 6,584
Trustees' fees and expenses--Note 3(C) 13,176
Other 28,894
----------
Total Expenses 363,722
Less fees paid indirectly--Note 4 (2,357)
----------
Net Expenses 361,365
----------
INVESTMENT INCOME--NET 260,027
REALIZED AND UNREALIZED GAIN (LOSS)--Note 4:
Net realized gain (loss) on:
Investments 6,174,542
Options written 28,812
----------
6,203,354
----------
Unrealized appreciation on:
Investments 930,518
Options written 30,849
----------
961,367
----------
NET REALIZED AND UNREALIZED GAIN 7,164,721
----------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $7,424,748
----------
----------
</TABLE>
See Notes to Financial Statements
17
<PAGE>
VALUE EQUITY FUND (CONTINUED)
Statement of Changes in Net Assets
---------------------------------------------------------------
<TABLE>
<CAPTION>
Six Months
Ended Year Ended
3/31/98 9/30/97
(Unaudited) (Audited)
----------- ------------
<S> <C> <C>
OPERATIONS:
Investment income--net $ 260,027 $ 714,434
Net realized gain 6,203,354 16,009,624
Net unrealized appreciation 961,367 4,183,788
----------- ------------
Net increase in net assets resulting from
operations 7,424,748 20,907,846
----------- ------------
CAPITAL TRANSACTIONS--Note 5:
Value of units sold 17,035,969 11,173,465
Value of units redeemed (7,792,576) (23,923,187)
----------- ------------
Net increase (decrease) in net assets resulting
from capital transactions 9,243,393 (12,749,722)
----------- ------------
Net increase 16,668,141 8,158,124
NET ASSETS at beginning of period 60,389,072 52,230,948
----------- ------------
NET ASSETS at end of period $77,057,213 $ 60,389,072
----------- ------------
----------- ------------
</TABLE>
See Notes to Financial Statements
18
<PAGE>
EMERGING GROWTH EQUITY FUND
Statement of Investments
March 31, 1998 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Shares Value
- ---------- -----------
<C> <S> <C> <C>
COMMON STOCKS 93.3%
APPAREL AND TEXTILE 2.5%
77,800 Ashworth, Inc. $ 1,317,737
9,500 DM Management Co. 197,125
21,300 Dress Barn* 609,713
-----------
2,124,575
-----------
AUTOMOTIVE PRODUCTS 2.0%
14,500 Copart Inc.* 241,062
44,000 Delco Remy International,
Inc. 668,250
9,900 SPX Inc. 755,494
-----------
1,664,806
-----------
BROADCASTING AND
PUBLISHING 1.0%
20,100 Metro Networks, Inc* 844,200
-----------
BUILDING AND CONSTRUCTION 1.9%
19,900 Comfort Systems USA, Inc. 430,338
40,700 Dycom Industries, Inc.* 1,142,143
-----------
1,572,481
-----------
BUSINESS AND PUBLIC
SERVICES 12.7%
8,000 Advo Systems Inc.* 221,000
34,700 Americredit Corp.* 954,250
3,000 Corporate Family
Solutions 78,000
20,000 Cotelligent Group Inc.* 592,500
20,900 Consolidation Capital
Corp. 522,500
21,600 Daisytek Intl Corp. 521,100
24,100 Dollar Thrifty Automotive
Gp. 542,250
22,900 Edutrek Int'l Inc A* 486,625
15,000 Gilman & Ciocia Inc. 193,125
50,000 Hospitality World Wide
Services* 490,625
15,100 Imnet Systems, Inc. 337,863
17,600 Lasalle Partners Inc.* 572,000
15,400 Medallion Financial Corp. 413,875
41,800 MetroCall, Inc. 289,988
28,300 Sirron Capital Corp. 850,769
27,200 Smart Talk 867,000
20,000 Telxon Corp. 527,500
56,700 Twinlab Corp. 2,292,806
-----------
10,753,776
-----------
COMMERCIAL SERVICES 7.6%
27,000 AHL Services, Inc.* 867,375
10,800 Applied Graphics
Technologies* 519,075
17,000 Axent Technology 516,375
24,700 Lason Holdings Inc.* 913,900
12,000 Mail-Well, Inc.* 454,500
43,150 NFO Worldwide, Inc.* 906,150
43,300 Profit Recovery Group
Intl.* 925,538
<CAPTION>
Shares Value
- ---------- -----------
<C> <S> <C> <C>
17,000 Service Experts $ 534,437
25,500 Superior Services Inc.* 795,281
-----------
6,432,631
-----------
CONSUMER GOODS AND
SERVICES 1.4%
21,000 Central Garden & Pet* 819,000
9,300 Quicksilver, Inc.* 332,475
-----------
1,151,475
-----------
ELECTRONICS AND
ELECTRICAL 5.8%
40,400 AeroFlex Inc. 535,300
8,400 Artisan Components 150,150
15,050 Burr-Brown Corp.* 372,487
15,000 Diamond Multimedia 221,250
44,000 Endosonics Corp.* 451,000
23,900 General Cable Corp.* 1,084,463
23,200 Integrated Electrica 461,100
8,800 PMC Sierra, Inc.* 334,400
9,800 Qlogic Corp.* 347,900
28,000 Sipex Corporation* 917,000
-----------
4,875,050
-----------
ENERGY 1.2%
17,400 Basin Exploration Inc.* 358,875
28,800 Tom Brown Inc.* 644,400
-----------
1,003,275
-----------
ENTERTAINMENT 0.6%
14,200 Action Performance Co,
Inc.* 497,000
-----------
FINANCIAL SERVICES 0.9%
47,000 Headlands Mortgage Co. 790,188
-----------
FOOD AND SERVICES 2.6%
35,000 Apple South Inc. 511,875
35,000 Buffets Inc. 479,063
17,490 CKE Restaurants, Inc. 642,757
25,300 Dreyer's Grand Ice Cream,
Inc. 543,950
-----------
2,177,645
-----------
INSURANCE 1.8%
16,700 Amerin Corp.* 501,000
40,000 Century Business Services 707,500
9,600 Inspire Insurance
Solutions 319,200
-----------
1,527,700
-----------
MACHINERY AND ENGINEERING 1.2%
20,000 Kuhlman Corp 973,750
-----------
MATERIALS AND SERVICES 1.2%
30,100 MS Carriers* 1,012,113
-----------
</TABLE>
See Notes to Financial Statements 19
<PAGE>
EMERGING GROWTH EQUITY FUND (CONTINUED)
Statement of Investments
March 31, 1998 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Shares Value
- ---------- -----------
MEDICAL SERVICES AND
DRUGS 17.5%
<C> <S> <C> <C>
22,600 ABR Information Services,
Inc.* $ 629,975
12,700 Advanced Paradigm, Inc.* 503,238
21,400 ArQule, Inc. 476,150
15,700 Assisted Living Concepts
Inc.* 339,512
26,000 Cooper Companies Inc* 1,103,375
88,900 Coventy Corp. 1,422,400
36,300 Healthcare Recoveries,
Inc.* 839,437
27,700 Intensiva Healthcare* 224,198
15,000 Lifecore Biomedical, Inc. 346,875
12,500 Medicis Pharmaceutical
Class A* 545,313
53,300 Novacare, Inc.* 792,837
36,800 PHP Healthcare Corp. 607,200
22,200 Perclose, Inc.* 621,600
12,200 Pharmacyclic Inc. 350,750
14,200 Province Healthcare 372,750
18,950 Renal Care Group Inc.* 716,546
23,700 Res Care, Inc.* 875,419
93,100 Royavac Corp. 2,193,667
15,000 Sangstat Medical Corp.* 478,125
14,800 Ventana Medical Systems 392,200
9,100 Vertex Pharmaceuticals,
Inc.* 288,925
27,000 Visx, Inc. 675,000
-----------
14,795,492
-----------
PRINTING 1.9%
28,000 Consolidated Graphics,
Inc.* 1,620,500
-----------
REAL ESTATE 3.5%
30,600 Brandywine Realty Trust 728,663
51,100 Fairfield Communities* 1,127,393
38,400 Trammell Crow Co. 1,094,400
-----------
2,950,456
-----------
RETAIL 8.3%
28,600 American Eagle
Outfitter's Inc.* 1,258,400
22,100 Delia's Inc.* 524,875
30,000 Eagle Hardware & Garden* 528,750
26,900 Kenneth Cole 541,362
25,000 Let's Talk Cellular &
Wireless 446,875
28,000 Stage Stores Inc.* 1,435,000
19,500 The Buckle, Inc. 977,437
22,700 The Wet Seal Inc. Class A 859,763
26,400 Value City Department
Stores, Inc. 447,150
-----------
7,019,612
-----------
SOFTWARE 14.8%
25,800 3DFX Interactive, Inc. 725,625
<CAPTION>
Shares Value
- ---------- -----------
<C> <S> <C> <C>
23,100 Advantage Learning
Systems* $ 786,844
41,300 Ardent Software Inc. 583,363
17,950 Computer Learning
Centers* 300,663
20,400 Concord Communications
Inc. 530,400
22,400 Corsair Communications
Inc. 420,000
21,700 Dataworks Corp. 566,913
9,600 Insight Enterprises,
Inc.* 385,200
20,000 Omtool Ltd. 277,500
93,400 Platinum Software* 2,159,876
30,000 Pomeroy Computer
Resources* 705,000
70,400 Quadramed Corp. 2,332,000
28,600 RWD Technologies Inc* 765,050
6,800 Radisys Corp.* 169,575
25,900 Rogue Wave Software 388,500
9,000 STB Systems, Inc.* 178,875
20,300 Structural Dynamics
Research* 504,962
50,000 Xircom, Inc. 690,625
-----------
12,470,971
-----------
TELECOMMUNICATIONS 0.3%
9,975 Level One Communications* 233,166
-----------
TRANSPORTATION 2.7%
18,900 Allied Holdings Inc.* 378,000
14,600 Atlantic Coast Airlines
Inc.* 697,150
22,100 Knight Transport, Inc.* 679,575
55,000 Mesa Air Group, Inc. 501,875
-----------
2,256,600
-----------
Total Common Stocks (Cost
$60,923,785) $78,747,462
-----------
<CAPTION>
Principal
Amount
- ----------
<C> <S> <C> <C>
SHORT TERM INVESTMENTS
REPURCHASE AGREEMENTS 9.4%
$7,893,452 Bear Stearns & Co. Inc.
Dated 3/31/1998 5.80%
Due 4/1/98
Collateralized by
$22,035,000 United
States Treasury Strips
Due 11/15/2020 (Value
$5,902,719) and
8,775,000 United States
Treasury Bonds due
8/15/2021 (Value
$2,149,875) $ 7,893,452
-----------
Total Investments (Cost
$68,817,237) 102.7% $86,640,914
Other Assets, Less Liabilities (2.7%) (2,284,107)
----- -----------
Net Assets 100.0% $84,356,807
----- -----------
----- -----------
</TABLE>
*Denotes non-income producing security.
See Notes to Financial Statements 20
<PAGE>
EMERGING GROWTH EQUITY FUND (CONTINUED)
Statement of Assets and Liabilities March 31, 1998 (Unaudited)
---------------------------------------------------------------
<TABLE>
<S> <C> <C>
ASSETS:
Investments in securities at value (Cost
$68,817,237)--Note 2(A) $86,640,914
Receivable for investments sold 1,752,444
Receivable for units sold 123,112
Dividends and interest receivable 77,362
Other assets 6,549
-----------
88,600,381
LIABILITIES:
Payable for investments purchased $4,036,575
Payable for units redeemed 54,902
Payable to investment managers 68,618
Accrued expenses 83,479 4,243,574
---------- -----------
NET ASSETS at value, applicable to 1,036,723 outstanding
units of beneficial interest--Note 5 $84,356,807
-----------
-----------
NET ASSET VALUE offering and redemption price per unit
($84,356,807 divided by 1,036,723 units) $ 81.37
-----------
-----------
</TABLE>
Statement of Operations Six Months Ended March 31, 1998
(Unaudited)
---------------------------------------------------------------
<TABLE>
<S> <C> <C>
INVESTMENT INCOME:
Income:
Dividends $ 72,670
Interest 266,705
----------
Total Income $ 339,375
Expenses:
Investment manager's fees--Note 3(A) 478,035
Shareholder servicing fees and expenses--Note 3(B) 224,236
Custodian fees and expenses 25,645
Legal and auditing fees 10,726
Consultant fees 6,496
Trustees' fees and expenses--Note 3(C) 25,640
Other 33,972
----------
Total expenses 804,750
----------
Less fees paid indirectly--Note 4 (29,275)
----------
Net Expenses 775,475
----------
INVESTMENT (LOSS)--NET (436,100)
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS--Note
4:
Net realized gain on investments 4,165,134
Unrealized (depreciation) on investments (7,406,677)
----------
NET REALIZED GAIN AND UNREALIZED (LOSS) ON INVESTMENTS (3,241,543)
----------
NET DECREASE IN NET ASSETS RESULTING FROM OPERATIONS $(3,677,643)
----------
----------
</TABLE>
See Notes to Financial Statements
21
<PAGE>
EMERGING GROWTH EQUITY FUND (CONTINUED)
Statement of Changes in Net Assets
---------------------------------------------------------------
<TABLE>
<CAPTION>
Six Months
Ended Year Ended
3/31/98 9/30/97
(Unaudited) (Audited)
----------- -----------
<S> <C> <C>
OPERATIONS:
Investment (loss)--net $ (436,100) $(1,179,968)
Net realized gain on investments 4,165,134 20,339,766
Net unrealized appreciation (depreciation) (7,406,677) 1,076,088
----------- -----------
Net increase (decrease) in net assets resulting from operations (3,677,643) 20,235,886
----------- -----------
CAPITAL TRANSACTIONS--Note 5:
Value of units sold 6,757,926 15,421,504
Value of units redeemed (10,312,134) (36,204,646)
----------- -----------
Net (decrease) in net assets resulting from capital transactions (3,554,208) (20,783,142)
----------- -----------
Net (decrease) (7,231,851) (547,256)
NET ASSETS at beginning of period 91,588,658 92,135,914
----------- -----------
NET ASSETS at end of period $84,356,807 $91,588,658
----------- -----------
----------- -----------
</TABLE>
See Notes to Financial Statements
22
<PAGE>
INTERNATIONAL EQUITY FUND
Statement of Investments
March 31, 1998 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Shares Value
- --------- -----------
<C> <S> <C> <C>
COMMON STOCKS 94.7%
AUTOMOBILES 3.7%
310 Bayerische Motoren Werke AG $ 349,001
11,000 Bridgestone Corp. 249,117
18,000 Suzuki Motor Corp. 168,728
8,000 Toyota Motor Corp. 212,972
16,680 Volvo AB Series B 531,015
-----------
1,510,833
-----------
BANKING 12.2%
5,720 Banco Popular Esp 555,204
24,000 Bank of Tokyo-Mitsubishi Bank 291,561
18,450 Barclays Plc Ord 553,045
6,700 Credit Commercial de France 550,433
3,260 Credit Suisse Group 652,221
16,090 HSBC Holdings UK 524,875
29,000 Hang Seng Bank 283,524
21,000 Malayan Banking Bhd 80,771
67,690 Nordbanken AB 448,769
20,678 Overseas Chinese Bank 116,519
36,698 Standard Chartered Plc 531,888
12,000 Sumitomo Trust & Bank 77,480
78,000 Thai Farmer's Bank 193,760
28,900 Westpac Banking Corp. 193,952
-----------
5,054,002
-----------
BROADCASTING AND PUBLISHING 2.0%
1,690 Canal Plus 316,960
17,340 Flextech Ord* 156,512
2,390 Wolters Kluwer CVA 341,646
-----------
815,118
-----------
BUILDING PRODUCTS 0.4%
58,800 Pioneer International 169,622
-----------
BUSINESS AND PUBLIC SERVICES 5.7%
7,000 Asatsu Inc. 122,834
12,000 Canon Inc. 270,864
7,934 Getronics NV 340,625
16,742 Logica 459,793
1,180 SAP AG Non Voting Preferred 503,434
5,000 Secom Company 305,584
10,430 Securitas AB 354,875
-----------
2,358,009
-----------
CHEMICALS 3.8%
2,500 Akzo Nobel NV* 507,873
37,000 Asahi Chemical Industries 138,177
300 Clariant AG 323,716
2,200 Novo-Nordisk AS 374,489
<CAPTION>
Shares Value
- --------- -----------
<C> <S> <C> <C>
12,000 Shin-etsu Chemical Co. $ 237,568
-----------
1,581,823
-----------
COMMERCIAL SERVICES 0.4%
35,300 Mayne Nickless Ltd. 182,593
-----------
CONSTRUCTION AND HOUSING 0.5%
38,000 Kajima Corp. 128,233
11,000 Sekisui House 89,913
-----------
218,146
-----------
CONSUMER GOODS AND SERVICES 2.4%
1,470 Accor SA 377,247
3,100 Cap Gemini SA 364,254
3,100 Cap Gemini SA-Rights* 9,582
6,000 Fuji Photo Film 223,170
-----------
974,253
-----------
ELECTRONICS AND ELECTRICAL 11.3%
3,855 ASM Lithography 356,158
2,390 Alcatel Alsthom 448,631
12,090 Ericsson Tel 574,688
69,803 General Cable Corp.* 197,548
49,743 General Electric Corp. 394,007
30,000 Hitachi Ltd. 218,221
17,000 Matsushita Electric Industrial Corp. 272,814
6,000 Matsushita Electric Works 58,942
5,380 Nokia AB 577,542
7,380 Philips Electronics 541,638
3,000 Rohm Co. 274,463
4,940 SGS-Thomson Micro* 388,220
4,500 Sony Corp. 381,324
-----------
4,684,196
-----------
ENERGY 4.4%
27,430 British Petroleum 395,953
196,320 Centrica Plc Ord 369,852
66,660 Lasmo Ord 308,096
81,400 Oil Search Limited 144,129
4,810 Total 577,603
-----------
1,795,633
-----------
FINANCIAL SERVICES 4.3%
75,300 Femsa 543,678
33,900 Grupo Fin Bancomer
ADR Repr. 20 Shs. 405,949
9,806 ING Groep NV 556,465
23,000 Nomura Securities Co. Ltd. 270,789
-----------
1,776,881
-----------
FOOD AND SERVICES 2.5%
117,000 Goodman Fielder Lt 182,024
</TABLE>
See Notes to Financial Statements 23
<PAGE>
INTERNATIONAL EQUITY FUND (CONTINUED)
Statement of Investments
March 31, 1998 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Shares Value
- --------- -----------
29,387 Grand Metropolitan $ 345,963
<C> <S> <C> <C>
270 Nestle SA 515,919
-----------
1,043,906
-----------
HEALTH AND PERSONAL CARE 8.0%
18,870 Astra AB-A Shares 389,474
16,200 Glaxo Wellcome 435,955
375 Novartis AG 663,668
35 Roche Holding AG 378,817
14,000 Sankyo Company 388,448
53,640 Smithkline Beecham 678,183
6,000 Yamanouchi Pharm 137,682
5,795 Zeneca Plc 249,789
-----------
3,322,016
-----------
INDUSTRIAL COMPONENTS 1.9%
33,069 BICC 81,958
18,000 NSK 70,866
18,000 Sumitomo Electric Industries 232,169
4,587 Valeo 403,494
-----------
788,487
-----------
INSURANCE 5.4%
1,480 Allianz AG 444,559
880 Allianz AG Rights* 4,354
5,210 AXA-UAP 536,500
43,206 Royal & Sun Alliance Insurance Group 550,605
6,720 Skandia Forsakrings 437,955
22,000 Tokio Marine & Fire 245,817
-----------
2,219,790
-----------
LEISURE 0.5%
5,500 Sony Music Entertainment 225,607
-----------
MACHINERY AND ENGINEERING 2.0%
5,874 IHC Caland NV 324,318
103,020 Rolls Royce 481,323
-----------
805,641
-----------
MATERIALS AND COMMODITIES 0.6%
2,170 SGL Carbon AG 241,132
-----------
METALS AND MINING 0.8%
114,00 NKK Corp. 102,586
13,000 SSAB (Svenskt Stal) 240,673
-----------
343,259
-----------
MULTI INDUSTRY 0.5%
28,000 Hutchison Whampoa 196,953
-----------
REAL ESTATE 0.9%
19,000 Cheung Kong Holdings 134,873
<CAPTION>
Shares Value
- --------- -----------
<C> <S> <C> <C>
12,000 Mitsubishi Estate $ 116,984
12,000 Mitsui Fudosan Co. 114,285
-----------
366,142
-----------
RETAIL 5.7%
12,670 Ahold (Kon) NV 409,028
5,800 Familymart Co. 217,471
12,760 Great Univ Stores 158,443
5,900 Hennes & Mauritz Series B 296,688
6,000 Ito-yokado Co. 324,857
27,040 Kingfisher Plc Ord 506,696
33,040 Morrison Supermarket 142,748
35,380 Sainsbury (J) Plc Ord 304,087
-----------
2,360,018
-----------
TELECOMMUNICATIONS 9.4%
50,190 British Telecom 546,313
420 DDI Corp. 103,306
138,00 Hong Kong Telecomm 284,976
670 Mannesmann AG 484,746
3,700 Nippon Tel & Tel Corp. 307,984
69,570 Securicor Group 475,328
46,450 Telecom Ital Mobile 249,783
98,930 Telecom Services Telecom Italia SPA 606,671
11,700 Telefonica De Espana 515,660
114,00 Tenaga Nasional 288,139
-----------
3,862,906
-----------
TRANSPORTATION 1.4%
28,990 Railtrack Group Plc Ord 475,757
29,000 Tobu Railways Co. 93,730
-----------
569,487
-----------
UTILITIES 4.0%
4,600 Cemig Cia Energ Mg
ADR Repr 1000 Shs* 223,720
50,000 China Light & Power 251,678
28,990 National Power Ord 297,106
2,200 Telebras Telec Bra
ADR Repr. 1000 Pfd. Shs. 285,588
8,120 Veba AG* 578,922
-----------
1,637,014
-----------
Total Investments (Cost $32,871,929) 94.7% $39,103,467
Other Assets, Less Liabilities 5.3% 2,173,157
------ -----------
Net Assets 100.0% $41,276,624
------ -----------
------ -----------
</TABLE>
See Notes to Financial Statements 24
<PAGE>
INTERNATIONAL EQUITY FUND (CONTINUED)
Geographical Diversification March 31, 1998 (Unaudited)
---------------------------------------------------------------
<TABLE>
<CAPTION>
Percent of
Net Assets
-------------
Country Total
- ------------------------- -------------
<S> <C>
United Kingdom 23.3%
Japan 16.2
France 9.6
Netherlands 8.2
Sweden 7.9
Germany 6.3
Switzerland 6.1
Spain 4.1
Hong Kong 2.8
Australia 2.1
Italy 2.1
Finland 1.4
Mexico 1.3
Denmark 0.9
Malaysia 0.9
Brazil 0.7
Thailand 0.5
Singapore 0.3
---
Total Investments 94.7%
Other Assets Less
Liabilities 5.3%
---
Total 100.0%
---
---
</TABLE>
Statement of Assets and Liabilities March 31, 1998 (Unaudited)
---------------------------------------------------------------
<TABLE>
<S> <C> <C>
ASSETS:
Investments in securities at value (Cost
$32,871,929)--Note 2(A) $39,103,467
Cash 1,902,634
Receivable for investments sold 407,767
Receivable for units sold 10,135
Dividends and interest receivable 122,490
Other assets 6,342
Net gain on forward foreign currency contracts 107,918
-----------
41,660,753
LIABILITIES:
Payable for investments purchased $270,043
Payable for units redeemed 3,818
Payable to investment managers 21,114
Accrued expenses 89,154 384,129
-------- -----------
NET ASSETS at value, applicable to 789,170
outstanding units of
beneficial interest--Note 5 $41,276,624
-----------
-----------
NET ASSET VALUE offering and redemption price per
unit
($41,276,624 divided by 789,170 units) $ 52.30
-----------
-----------
</TABLE>
See Notes to Financial Statements
25
<PAGE>
INTERNATIONAL EQUITY FUND (CONTINUED)
Statement of Operations Six Months Ended March 31, 1998
(Unaudited)
---------------------------------------------------------------
<TABLE>
<S> <C> <C>
INVESTMENT INCOME:
Income:
Dividends $ 146,174
Interest 124,606
----------
Total Income $ 270,780
Expenses:
Investment managers's fees--Note 3(A) 135,276
Shareholder servicing fees and expenses--Note
3(B) 96,962
Custodian fees and expenses 35,901
Legal and auditing fees 10,725
Consultant fees 6,495
Trustees' fees and expenses--Note 3(C) 13,145
Other 43,077
----------
Total Expenses 341,581
Less fees paid indirectly--Note 4 (10,000)
----------
Net Expenses 331,581
-----------
INVESTMENT (LOSS)--NET (60,801)
REALIZED AND UNREALIZED GAIN--Note 4:
Net realized gain on:
Investments 875,931
Foreign currency transactions 167,735
----------
1,043,666
----------
Unrealized appreciation on investments
Investments 26,221
Foreign currency translations of other assets
and liabilities 73,417
----------
99,638
----------
NET REALIZED AND UNREALIZED GAIN ON INVESTMENTS
AND FOREIGN CURRENCIES 1,143,304
-----------
NET INCREASE IN NET ASSETS RESULTING FROM
OPERATIONS $ 1,082,503
-----------
-----------
</TABLE>
Statement of Changes in Net Assets
---------------------------------------------------------------
<TABLE>
<CAPTION>
Six Months
Ended Year Ended
3/31/98 9/30/97
(Unaudited) (Audited)
----------- -----------
<S> <C> <C>
OPERATIONS:
Investment (loss)--net $ (60,801) $ (107,067)
Net realized gain 1,043,666 4,019,696
Net unrealized appreciation 99,638 544,854
----------- -----------
Net increase in net assets resulting from operations 1,082,503 4,457,483
----------- -----------
CAPITAL TRANSACTIONS--Note 5:
Value of units sold 8,263,957 9,216,371
Value of units redeemed (3,346,131) (17,999,512)
----------- -----------
Net increase (decrease) in net assets resulting from
capital transactions 4,917,826 (8,783,141)
----------- -----------
Net increase (decrease) 6,000,329 (4,325,658)
NET ASSETS at beginning of period 35,276,295 39,601,953
----------- -----------
NET ASSETS at end of period $41,276,624 $35,276,295
----------- -----------
----------- -----------
</TABLE>
See Notes to Financial Statements
26
<PAGE>
ACTIVELY MANAGED BOND FUND
Statement of Investments
March 31, 1998 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Principal
Amount Value
- ----------- ------------
<C> <S> <C> <C>
CORPORATE BONDS 1.5%
$ 2,000,000 Pepsico Inc.
Structured Medium Term Note
6.125% Due 03/04/2008 $ 1,971,134
245,000 Consolidated Natural Gas Sf Db
8.624% Due 12/01/2011 256,728
------------
Total Corporate Bonds (Cost $2,255,445) $ 2,227,862
------------
UNITED STATES GOVERNMENT AND AGENCY
OBLIGATIONS 98.0%
$ 25,651 Collateralized Mortgage Oblig Tr 1
0.00% Due 05/20/2017 $ 21,705
97,668 Collateralized Mortgage Sec Corp.
7.00% Due 06/01/2006 97,198
200,000 Federal Home Loan Bank
7.125% Due 12/20/2010 198,643
2,000,000 Federal Home Loan Bank
7.13% Due 02/01/2011 1,989,638
8,000,000 Federal Home Loan Bank
0.00% Due 06/25/2012 2,664,648
10,000,000 Federal Home Loan Bank
0.00% Due 06/26/2017 2,238,270
10,000,000 Federal Home Loan Bank
0.00% Due 07/02/2012 3,316,700
3,000,000 Federal Home Loan Bank
0.00% Due 07/07/2017 669,885
15,000,000 Federal Home Loan Bank
0.00% Due 07/14/2017 3,344,355
28,000,000 Federal Home Loan Bank
0.00% Due 07/25/2017 6,512,156
500,000 Federal Home Loan Bank
0.00% Due 08/28/2017 105,738
770,000 Federal Home Loan Bank
7.50% Due 11/05/2012 774,876
622,121 Federal Home Loan Mortgage Corp.
Remic 1360 B
7.50% Due 04/15/2022 616,208
1,272,889 Federal Home Loan Mortgage Corp.
Remic 1378 NZ
7.50% Due 10/15/2022 1,251,669
200,000 Federal Home Loan Mortgage Corp.
Structured Note
6.25% Due 02/13/2008 200,401
1,199,755 Federal Home Loan Mortgage Corp.
Remic 1459 TZ
7.00% Due 12/15/2022 1,173,590
<CAPTION>
Principal
Amount Value
- ----------- ------------
<C> <S> <C> <C>
UNITED STATES GOVERNMENT AND AGENCY
OBLIGATIONS (Continued)
$ 522,388 Federal Home Loan Mortgage Corp.
Remic 1454 N
7.50% Due 01/15/2023 $ 516,592
3,503,560 Federal Home Loan Mortgage Corp.
Remic 1527 OZ
7.50% Due 05/15/2023 3,569,361
4,846,000 Federal Home Loan Mortgage Corp.
Remic 1505 Q
7.00% Due 05/15/2023 4,870,778
1,680,230 Federal Home Loan Mortgage Corp.
Remic 1574 U
6.50% Due 09/15/2023 1,614,700
885,714 Federal Home Loan Mortgage Corp.
Remic 1574 V
6.50% Due 03/15/2023 841,809
1,251,963 Federal Home Loan Mortgage Corp.
Remic 1559 WD
7.00% Due 05/15/2023 1,236,440
307,000 Federal Home Loan Mortgage Corp.
Remic 1578 N
7.00% Due 09/15/2023 305,743
592,550 Federal Home Loan Mortgage Corp.
Remic 1560 N
7.00% Due 11/15/2022 579,708
604,000 Federal Home Loan Mortgage Corp.
Remic 1583 OB
7.00% Due 06/15/2023 594,842
207,000 Federal Home Loan Mortgage Corp.
Remic 1608 O
6.50% Due 11/15/2023 199,917
650,558 Federal Home Loan Mortgage Corp.
Remic 1767 O
7.50% Due 12/15/2024 651,080
708,000 Federal Home Loan Mortgage Corp.
Remic 1966 N
7.50% Due 09/15/2026 704,740
3,000,000 Federal Home Loan Mortgage Corp.
Remic 1966 V
7.50% Due 06/15/2027 2,999,553
1,000,000 Federal Home Loan Mortgage Corp.
Remic 2038 PS
6.50% Due 07/15/2026 977,539
1,500,000 Federal Home Loan Mortgage Corp.
6.84% Due 03/02/2009 1,487,868
</TABLE>
See Notes to Financial Statements 27
<PAGE>
ACTIVELY MANAGED BOND FUND (CONTINUED)
Statement of Investments
March 31, 1998 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Principal
Amount Value
- ----------- ------------
UNITED STATES GOVERNMENT AND AGENCY
OBLIGATIONS (Continued)
<C> <S> <C> <C>
$ 1,000,000 Federal Home Loan Mortgage Corp.
6.59% Due 12/09/2008 $ 983,596
733,202 Federal Home Loan Mortgage Corp.
Pool #141001
7.75% Due 09/01/2016 753,380
239,914 Federal Home Loan Mortgage Corp.
Pool #297625
8.50% Due 06/01/2017 251,584
300,333 Federal Home Loan Mortgage Corp.
Pool #533625
8.50% Due 12/01/2007 311,473
421,961 Federal Home Loan Mortgage Corp.
Pool #533624
8.50% Due 12/01/2007 438,899
500,000 Federal Home Loan Mortgage Corp.
7.13% Due 09/15/2005 502,046
1,825,000 Federal Home Loan Mortgage Corp.
Structured Note
7.049% Due 04/11/2011 1,842,075
15,000,000 Federal Home Loan Mortgage Corp.
0.00% Due 02/02/2023 2,266,905
1,000,000 Federal Home Loan Mortgage Corp.
7.46% Due 01/23/2012 1,001,377
10,000,000 Federal Home Loan Mortgage Corp.
0.00% Due 08/07/2017 2,173,570
637,514 Federal National Mortgage Association
Remic 1993-4 M
7.50% Due 03/25/2022 633,319
285,418 Federal National Mortgage Association
Remic 1992-210 L
7.50% Due 04/25/2022 284,588
2,000,000 Federal National Mortgage Association
Remic 1993-26 O
7.50% Due 09/25/2022 1,992,650
612,000 Federal National Mortgage Association
Remic 93-61 HB
6.75% Due 03/25/2022 622,946
1,385,565 Federal National Mortgage Association
Remic 1993-183 OA
6.50% Due 08/25/2023 1,325,564
1,823,852 Federal National Mortgage Association
Remic 1993-255 V
6.50% Due 02/25/2023 1,751,712
<CAPTION>
Principal
Amount Value
- ----------- ------------
<C> <S> <C> <C>
UNITED STATES GOVERNMENT AND AGENCY
OBLIGATIONS (Continued)
$ 661,000 Federal National Mortgage Association
Remic 1994-3 PL
5.50% Due 01/25/2024 $ 593,922
1,376,584 Federal National Mortgage Association
Remic 1993-255 E
7.099% Due 12/25/2023 1,387,515
3,820,118 Federal National Mortgage Association
Remic 1993-247 C
7.00% Due 03/25/2023 3,823,721
1,371,000 Federal National Mortgage Association
Remic 93-226 C
6.00% Due 12/25/2023 1,314,486
2,015,050 Federal National Mortgage Association
Remic X-225C NE
6.50% Due 12/25/2022 1,931,654
950,000 Federal National Mortgage Association
Remic 1994-23 E
6.00% Due 02/25/2024 899,470
4,474,638 Federal National Mortgage Association
Remic 1994-36 UA
7.00% Due 08/25/2023 4,414,298
3,636,825 Federal National Mortgage Association
Remic 1994-69 CA
7.25% Due 03/25/2023 3,629,548
868,000 Federal National Mortgage Association
Remic X-12 A C
8.00% Due 07/25/2025 865,925
1,347,000 Federal National Mortgage Association
Remic 1997-42U
7.50% Due 08/18/2025 1,340,032
1,687,054 Federal National Mortgage Association
Remic 1997-34 C
7.00% Due 06/18/2027 1,646,950
3,000,000 Federal National Mortgage Association
Remic 1997-52 CD
7.50% Due 09/18/2025 3,010,011
5,000,000 Federal National Mortgage Association
Remic 1997-52 CE
7.50% Due 02/18/2026 4,976,755
1,165,000 Federal National Mortgage Association
Remic 1997-56 H
7.50% Due 05/18/2026 1,163,434
2,877,853 Federal National Mortgage Association
Pass Thru Pool #50965
6.50% Due 01/01/2024 2,861,047
</TABLE>
See Notes to Financial Statements 28
<PAGE>
ACTIVELY MANAGED BOND FUND (CONTINUED)
Statement of Investments
March 31, 1998 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Principal
Amount Value
- ----------- ------------
UNITED STATES GOVERNMENT AND AGENCY
OBLIGATIONS (Continued)
<C> <S> <C> <C>
$ 1,112,886 Federal National Mortgage Association
Pass Thru Pool #50966
7.00% Due 01/01/2024 $ 1,128,166
616,664 Federal National Mortgage Association
Pool #50987
6.50% Due 02/01/2009 619,754
540,930 Federal National Mortgage Association
Pool #87277
7.50% Due 04/01/2018 559,419
200,000 Federal National Mortgage Association
Medium Term Note
6.69% Due 02/02/2011 199,646
1,000,000 Federal National Mortgage Association
8.00% Due 04/26/2012 1,023,856
1,000,000 Federal National Mortgage Association
Medium Term Note
7.65% Due 10/06/2006 1,027,403
1,300,000 Federal National Mortgage Association
6.29% Due 01/22/2008 1,283,370
997,951 Federal National Mortgage Association
Pass Thru Pool #239024
7.00% Due 10/01/2023 1,011,654
27,639 Government National Mortgage Association
Pool #1350
6.50% Due 03/15/2002 27,737
1,588 Government National Mortgage Association
Pool #2919
8.00% Due 02/15/2004 1,653
286,487 Government National Mortgage Association
Jumbo #000675
8.00% Due 12/20/2016 299,087
58,372 Government National Mortgage Association
Jumbo #000710
8.00% Due 02/20/2017 60,925
67,569 Government National Mortgage Association
Pool #05214
8.00% Due 07/15/2005 70,669
217,575 Government National Mortgage Association
Pool #10260
8.00% Due 06/15/2006 228,012
1,430 Government National Mortgage Association
Pool #10855
8.00% Due 07/15/2006 1,499
<CAPTION>
Principal
Amount Value
- ----------- ------------
<C> <S> <C> <C>
UNITED STATES GOVERNMENT AND AGENCY
OBLIGATIONS (Continued)
$ 27,088 Government National Mortgage Association
Pool #11192
7.25% Due 04/15/2006 $ 27,777
237,323 Government National Mortgage Association
Pass Thru Pool #346560
8.00% Due 04/15/2023 246,646
557,236 Government National Mortgage Association
Pool #364979
8.00% Due 04/15/2024 577,135
748,159 Government National Mortgage Association
Pool #373826
8.00% Due 09/15/2023 777,548
714,799 Government National Mortgage Association
Pass Thru Pool #377003
8.00% Due 08/15/2024 740,325
1,453,873 Government National Mortgage Association
Pass Through Pool #377341
8.00% Due 11/15/2024 1,505,792
15,183 Government National Mortgage Association
Pool #025811
9.00% Due 01/15/2009 16,449
5,421 Government National Mortgage Association
Pass Through Pool #26113
9.00% Due 08/15/2006 5,866
689,564 Government National Mortgage Association
Pass Thru Pool #385850
8.00% Due 08/15/2024 714,189
15,116 Government National Mortgage Association
Pass Thru Pool #35238
9.50% Due 09/15/2009 16,515
429,965 Government National Mortgage Association
Custom #152027
8.00% Due 10/20/2016 448,876
22,452 Government National Mortgage Association
9.00% Due 07/15/2016 24,373
14,071 Government National Mortgage Association
9.50% Due 06/15/2016 15,432
2,314 Government National Mortgage Association
9.50% Due 12/15/2016 2,537
172,138 Government National Mortgage Association
Pool #169957
8.50% Due 07/15/2016 182,876
7,364 Government National Mortgage Association
9.00% Due 10/15/2016 7,994
</TABLE>
See Notes to Financial Statements 29
<PAGE>
ACTIVELY MANAGED BOND FUND (CONTINUED)
Statement of Investments
March 31, 1998 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Principal
Amount Value
- ----------- ------------
UNITED STATES GOVERNMENT AND AGENCY
OBLIGATIONS (Continued)
<C> <S> <C> <C>
$ 4,681 Government National Mortgage Association
9.00% Due 08/15/2016 $ 5,082
30,497 Government National Mortgage Association
9.00% Due 09/15/2016 33,105
14,485 Government National Mortgage Association
Custom #209105
8.00% Due 03/20/2017 15,119
44,144 Government National Mortgage Association
9.50% Due 04/15/2017 48,355
209,752 Government National Mortgage Association
Pool #213606
8.00% Due 04/15/2017 220,599
144,877 Government National Mortgage Association
Pool #193256
8.00% Due 03/15/2017 152,370
274,335 Government National Mortgage Association
Pool #196754
8.50% Due 02/15/2017 291,350
29,573 Government National Mortgage Association
9.50% Due 01/15/2017 32,394
116,786 Government National Mortgage Association
Pool #202887
8.00% Due 04/15/2017 122,825
64,334 Government National Mortgage Association
Pool #205624
8.50% Due 03/15/2017 68,323
8,358 Government National Mortgage Association
9.50% Due 12/15/2017 9,156
11,402 Government National Mortgage Association
Pool #216159
8.00% Due 04/15/2017 11,992
234,602 Government National Mortgage Association
Pool #218150
8.00% Due 06/15/2017 246,734
6,919 Government National Mortgage Association
9.50% Due 07/15/2017 7,579
23,946 Government National Mortgage Association
9.50% Due 06/15/2018 26,228
<CAPTION>
Principal
Amount Value
- ----------- ------------
<C> <S> <C> <C>
UNITED STATES GOVERNMENT AND AGENCY
OBLIGATIONS (Continued)
$ 312,843 Government National Mortgage Association
Pool #226673
9.50% Due 07/15/2017 $ 342,681
10,564 Government National Mortgage Association
Pool #247493
8.00% Due 07/15/2018 11,082
4,591 Government National Mortgage Association
9.50% Due 08/15/2018 5,029
5,959 Government National Mortgage Association
Pool #290013
8.00% Due 04/15/2020 6,217
111,674 Government National Mortgage Association
Pool #290123
8.00% Due 06/15/2020 116,493
123,371 Government National Mortgage Association
Pool #291195
8.00% Due 05/15/2020 128,694
173,417 Government National Mortgage Association
Pass Thru Pool #319342
8.50% Due 03/15/2022 183,337
1,000,000 Government National Mortgage Association
Remic 1998-1 A
7.00% Due 01/20/2028 970,835
10,020,000 United States Treasury Bonds
9.25% Due 02/15/2016 13,570,838
6,800,000 United States Treasury Zero Coupons
0.00% Due 02/15/2006 4,327,996
19,180,000 United States Treasury Zero Coupons
0.00% Due 02/15/2010 9,526,898
3,700,000 Federal Home Loan Bank
Discount Note
5.82% Due 04/01/1998 3,700,000
------------
Total United States Government and Agency Obligations
(Cost $139,576,624) $144,355,293
------------
Total Investments (Cost $141,832,069) 99.5% $146,583,155
Other Assets, Less Liabilities 0.5% 685,349
------ ------------
Net Assets 100.0% $147,268,504
------ ------------
------ ------------
</TABLE>
See Notes to Financial Statements 30
<PAGE>
ACTIVELY MANAGED BOND FUND (CONTINUED)
Statement of Assets and Liabilities March 31, 1998 (Unaudited)
---------------------------------------------------------------
<TABLE>
<S> <C> <C>
ASSETS:
Investments in securities at value (Cost
$141,832,069)--Note 2 (A) $146,583,155
Receivable for units sold 33,142
Interest receivable 843,481
Cash 34,620
Other assets 16,149
------------
147,510,817
LIABILITIES:
Payable for investments purchased $ 69,120
Payable for units redeemed 41,704
Payable to investment managers 41,511
Accrued expenses 89,978 242,313
-------- ------------
NET ASSETS at value, applicable to 4,162,502
outstanding units of beneficial interest--Note 5 $147,268,504
------------
------------
NET ASSET VALUE offering and redemption price per unit
($147,268,504 divided by 4,162,502 units) $ 35.38
------------
------------
</TABLE>
Statement of Operations Six Months Ended March 31, 1998
(Unaudited)
---------------------------------------------------------------
<TABLE>
<S> <C> <C>
INVESTMENT INCOME:
Income:
Interest $ 5,216,713
-----------
Total Income $ 5,216,713
Expenses:
Investment manager's fees--Note 3(A) 244,439
Shareholder servicing fees and expenses--Note 3(B) 270,938
Custodian fees and expenses 12,051
Legal and auditing fees 10,727
Consultant fees 6,492
Trustees' fees and expenses--Note 3(C) 13,145
Other 43,426
-----------
Total Expenses 601,218
-----------
INVESTMENT INCOME--NET 4,615,495
REALIZED AND UNREALIZED GAIN ON INVESTMENTS--Note 4:
Net realized gain on investments 1,521,077
Unrealized appreciation on investments 136,063
-----------
NET REALIZED AND UNREALIZED GAIN ON INVESTMENTS 1,657,140
-----------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 6,272,635
-----------
-----------
</TABLE>
See Notes to Financial Statements
31
<PAGE>
ACTIVELY MANAGED BOND FUND (CONTINUED)
Statement of Changes in Net Assets
---------------------------------------------------------------
<TABLE>
<CAPTION>
Six Months
Ended
3/31/98 Year Ended
(Unaudited) 9/30/97
------------ ------------
<S> <C> <C>
OPERATIONS:
Investment income--net $ 4,615,495 $ 9,227,012
Net realized gain 1,521,077 1,219,640
Net unrealized appreciation 136,063 3,740,985
------------ ------------
Net increase in net assets resulting from operations 6,272,635 14,187,637
CAPITAL TRANSACTIONS--Note 5:
Value of units sold 7,909,405 36,098,759
Value of units redeemed (14,052,342) (53,451,868)
------------ ------------
Net (decrease) in net assets resulting from capital transactions (6,142,937) (17,353,109)
------------ ------------
Net increase (decrease) 129,698 (3,165,472)
NET ASSETS at beginning of period 147,138,806 150,304,278
------------ ------------
NET ASSETS at end of period $147,268,504 $147,138,806
------------ ------------
------------ ------------
</TABLE>
See Notes to Financial Statements
32
<PAGE>
INTERMEDIATE-TERM BOND FUND
Statement of Investments
March 31, 1998 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Principal
Amount Value
- ----------- -----------
<C> <S> <C> <C>
CERTIFICATE OF DEPOSIT 0.2%
$ 126,079 Certificate of Deposit--Hudson City Savings
Bank
7.56% Due 02/22/1999 $ 126,080
-----------
CORPORATE BONDS 0.2%
$ 100,000 Ford Motor Co.
9.70% Due 06/10/1998 $ 100,680
-----------
MORTGAGE 0.0%
$ 9,029 Pioneer Savings Bank Mortgage
8.5% Due 01/01/2005 $ 9,029
-----------
UNITED STATES GOVERNMENT AND AGENCY
OBLIGATIONS 100.1%
$ 367,000 CSC4 CMO
1993-1E
7.50% Due 02/01/2023 $ 375,448
235,593 Collateralized Mortgage Obligation Trust
Remic 27A
7.25% Due 04/23/2017 239,946
430,000 Federal Farm Credit Bank
Medium Term Note
7.21% Due 08/06/2007 432,037
1,300,000 Federal Home Loan Bank
7.04% Due 10/14/2005 1,301,343
500,000 Federal Home Loan Bank
7.00% Due 01/08/2008 498,138
610,956 Federal Home Loan Mortgage Corp.
CMO 157A
8.75% Due 07/15/2000 629,608
686,155 Federal Home Loan Mortgage Corp.
Remic 1406 N
8.00% Due 01/15/2022 688,561
1,445,675 Federal Home Loan Mortgage Corp.
Remic 1379 I
7.50% Due 03/15/2022 1,436,528
1,039,844 Federal Home Loan Mortgage Corp.
Remic 1462 A
7.50% Due 02/15/2022 1,034,768
216,223 Federal Home Loan Mortgage Corp.
Remic 1468 O
7.00% Due 10/15/2022 215,494
2,253,407 Federal Home Loan Mortgage Corp.
Remic 1579 PQ
7.00% Due 04/15/2022 2,234,624
1,056,248 Federal Home Loan Mortgage Corp.
Remic 1641 WD
6.50% Due 05/15/2013 1,040,040
<CAPTION>
Principal
Amount Value
- ----------- -----------
<C> <S> <C> <C>
UNITED STATES GOVERNMENT AND AGENCY
OBLIGATIONS (Continued)
$ 400,000 Federal Home Loan Mortgage Corp.
Remic 32 E
7.50% Due 03/25/2005 $ 409,211
537,202 Federal Home Loan Mortgage Corp.
Remic 1680 E
6.50% Due 02/15/2024 538,350
1,439,189 Federal Home Loan Mortgage Corp.
Remic 1681 K
7.00% Due 08/15/2023 1,432,785
980,708 Federal Home Loan Mortgage Corp.
Remic 1701 C
6.50% Due 03/15/2009 961,865
1,262,011 Federal Home Loan Mortgage Corp.
Remic 1706 LB
7.00% Due 06/15/2023 1,251,970
500,000 Federal Home Loan Mortgage Corp.
Remic 1770 PH
8.00% Due 08/15/2023 517,620
9,493 Federal Home Loan Mortgage Corp.
Pool #200030
9.00% Due 03/01/2001 9,726
29,415 Federal Home Loan Mortgage Corp.
Pool #200034
8.50% Due 05/01/2001 30,301
13,656 Federal Home Loan Mortgage Corp.
Pool #200035
9.00% Due 05/01/2001 13,990
54,160 Federal Home Loan Mortgage Corp.
Pool #200040
9.00% Due 06/01/2001 55,483
48,738 Federal Home Loan Mortgage Corp.
Pool #200070
7.50% Due 04/01/2002 49,513
79,695 Federal Home Loan Mortgage Corp.
Pool #200071
7.50% Due 05/01/2002 80,962
1,000,000 Federal Home Loan Mortgage Corp.
6.355% Due 08/08/2005 993,102
15,517 Federal Home Loan Mortgage Corp.
Pool #251478
7.00% Due 12/01/1998 15,668
71,889 Federal Home Loan Mortgage Corp.
Pool #212242
7.50% Due 07/01/2001 72,842
</TABLE>
See Notes to Financial Statements 33
<PAGE>
INTERMEDIATE-TERM BOND FUND (CONTINUED)
Statement of Investments
March 31, 1998 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Principal
Amount Value
- ----------- -----------
UNITED STATES GOVERNMENT AND AGENCY
OBLIGATIONS (Continued)
<C> <S> <C> <C>
$ 16,922 Federal Home Loan Mortgage Corp.
Pool #212719
7.50% Due 08/01/2001 $ 17,146
63,612 Federal Home Loan Mortgage Corp.
Pool #213857
7.50% Due 11/01/2001 64,455
23,539 Federal Home Loan Mortgage Corp.
Pool #214040
7.50% Due 12/01/2001 23,852
32,740 Federal Home Loan Mortgage Corp.
Pool #320139
8.00% Due 09/01/2001 33,258
5,058 Federal Home Loan Mortgage Corp.
Pool #309883
7.00% Due 09/01/1998 5,107
1,500,000 Federal Home Loan Mortgage Corp.
6.91% Due 06/20/2005 1,524,249
2,000,000 Federal Home Loan Mortgage Corp.
7.13% Due 06/30/2005 2,006,572
300,000 Federal Home Loan Mortgage Corp.
7.30% Due 05/21/2003 299,725
2,000,000 Federal Home Loan Mortgage Corp.
Structured Note
6.50% Due 10/15/2007 2,008,220
1,000,000 Federal Home Loan Mortgage Corp.
Structured Note
6.85% Due 11/20/2006 1,002,096
1,150,000 Federal Home Loan Mortgage Corp.
7.09% Due 11/24/2006 1,166,736
1,000,000 Federal Home Loan Mortgage Corp.
7.25% Due 07/17/2007 1,002,530
94,426 Federal National Mortgage Association
Remic 1991-56 K
8.599% Due 02/25/2020 94,856
516,000 Federal National Mortgage Association
Remic 1992-135 J
7.50% Due 02/25/2021 528,404
1,000,000 Federal National Mortgage Association
Remic 1992-138 P
7.50% Due 08/25/2022 1,009,751
376,000 Federal National Mortgage Association
Remic 1992-131 H
7.50% Due 06/25/2021 382,049
<CAPTION>
Principal
Amount Value
- ----------- -----------
<C> <S> <C> <C>
UNITED STATES GOVERNMENT AND AGENCY
OBLIGATIONS (Continued)
$ 271,092 Federal National Mortgage Association
Remic 1992-181 B
7.50% Due 03/25/2022 $ 271,175
324,000 Federal National Mortgage Association
Remic 1992-174 H
7.25% Due 09/25/2021 329,342
104,000 Federal National Mortgage Association
Remic 1993-1 G
7.50% Due 01/25/2022 107,634
225,000 Federal National Mortgage Association
Remic 1992-202 J
7.50% Due 04/25/2020 231,981
2,334,000 Federal National Mortgage Association
Remic 1993-20 L
7.00% Due 12/25/2022 2,306,571
2,821,286 Federal National Mortgage Association
CMO 1993-162 C
3.00% Due 08/25/2023 2,720,285
163,663 Federal National Mortgage Association
CMO 93-244 A
0.00% Due 11/25/2023 156,170
1,480,774 Federal National Mortgage Association
Remic X-225 C UC
6.25% Due 09/25/2022 1,463,324
1,167,266 Federal National Mortgage Association
Remic X-225 C NB
6.50% Due 12/25/2022 1,147,067
414,000 Federal National Mortgage Association
Remic G-94 8 M
8.00% Due 05/17/2024 412,969
810,463 Federal National Mortgage Association
Remic G-94 5 A
7.00% Due 01/17/2024 818,341
1,006,175 Federal National Mortgage Association
Remic1995-23 U
7.50% Due 04/25/2023 1,004,385
400,000 Federal National Mortgage Association
Remic X 10-B G
7.00% Due 08/25/2010 400,326
2,740,000 Federal National Mortgage Association
Remic 1997-42 O
7.50% Due 12/18/2025 2,728,651
18,777 Federal National Mortgage Association
Pool #7242
8.50% Due 07/01/2001 19,347
</TABLE>
See Notes to Financial Statements 34
<PAGE>
INTERMEDIATE-TERM BOND FUND (CONTINUED)
Statement of Investments
March 31, 1998 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Principal
Amount Value
- ----------- -----------
UNITED STATES GOVERNMENT AND AGENCY
OBLIGATIONS (Continued)
<C> <S> <C> <C>
$ 83,169 Federal National Mortgage Association
Pool #46609
8.00% Due 05/01/2002 $ 85,259
171,316 Federal National Mortgage Association
Pool #46872
8.00% Due 05/01/2002 175,170
9,281 Federal National Mortgage Association
Pool #47137
8.00% Due 05/01/2002 9,515
120,321 Federal National Mortgage Association
Pool #47402
8.00% Due 05/01/2002 123,344
96,046 Federal National Mortgage Association
Pool #47932
8.00% Due 05/01/2002 98,459
66,136 Federal National Mortgage Association
Pool #48103
8.00% Due 05/01/2002 67,798
24,516 Federal National Mortgage Association
Pool #26607
9.00% Due 05/01/2001 25,225
13,572 Federal National Mortgage Association
Pool #26707
9.00% Due 05/01/2001 13,965
122,381 Federal National Mortgage Association
Pool #28785
9.00% Due 06/01/2001 125,921
67,126 Federal National Mortgage Association
Pool #28645
9.00% Due 06/01/2001 69,067
4,641 Federal National Mortgage Association
Pool #29658
8.50% Due 07/01/2001 4,782
25,240 Federal National Mortgage Association
Pool #29470
9.00% Due 07/01/2001 25,970
60,706 Federal National Mortgage Association
Pool #30409
8.50% Due 09/01/2001 62,546
2,503 Federal National Mortgage Association
Pool # 31435
8.50% Due 08/01/2001 2,580
798,887 Federal National Mortgage Association
Pool #82407
9.00% Due 03/01/2004 827,943
<CAPTION>
Principal
Amount Value
- ----------- -----------
<C> <S> <C> <C>
UNITED STATES GOVERNMENT AND AGENCY
OBLIGATIONS (Continued)
$ 300,516 Federal National Mortgage Association
Pool #87277
7.50% Due 04/01/2018 $ 310,788
1,000,000 Federal National Mortgage Association
6.69% Due 02/27/2006 994,941
1,000,000 Federal National Mortgage Association
Medium Term Note
6.58% Due 03/01/2006 1,000,864
250,000 Federal National Mortgage Association
7.59% Due 10/04/2006 255,021
500,000 Federal National Mortgage Association
Medium Term Note
7.65% Due 10/06/2006 513,702
1,000,000 Federal National Mortgage Association
7.53% Due 10/16/2006 1,006,645
2,500,000 Federal National Mortgage Association
Medium Term Note
7.439% Due 11/06/2006 2,525,572
1,000,000 Federal National Mortgage Association
Medium Term Note
7.29% Due 11/08/2006 1,009,556
400,000 Federal National Mortgage Association
7.43% Due 06/13/2007 411,589
400,000 Federal National Mortgage Association
7.34% Due 12/18/2006 402,088
385,000 Federal National Mortgage Association
6.87% Due 10/02/2007 388,303
199,487 Federal National Mortgage Association
7 Year Balloon
7.00% Due 08/01/2003 202,490
872,000 Federal National Mortgage Association
Remic1998-24 B
0.00% Due 04/30/1999 858,920
880,084 Federal National Mortgage Association
7.55% Due 12/25/2023 876,408
10,418 Government National Mortgage Association
8.25% Due 03/15/2006 10,953
1,081 Government National Mortgage Association
8.25% Due 04/15/2006 1,136
883,616 Government National Mortgage Association
Pass Thru Pool #409781
8.25% Due 08/15/2025 925,801
984,572 Government National Mortgage Association
Remic 1997-18 E
6.90% Due 02/20/2023 983,900
</TABLE>
See Notes to Financial Statements 35
<PAGE>
INTERMEDIATE-TERM BOND FUND (CONTINUED)
Statement of Investments
March 31, 1998 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Principal
Amount Value
- ----------- -----------
UNITED STATES GOVERNMENT AND AGENCY
OBLIGATIONS (Continued)
<C> <S> <C> <C>
$ 10,000 United States Treasury Bonds
3.50% Due 11/15/1998 $ 9,944
300,000 United States Treasury Notes
7.50% Due 11/15/2001 317,625
125,000 United States Treasury Notes
6.375% Due 07/15/1999 126,172
50,000 United States Treasury Notes
5.50% Due 04/15/2000 49,906
60,000 United States Treasury Notes
7.124% Due 02/29/2000 61,612
200,000 United States Treasury Notes
7.75% Due 02/15/2001 211,000
<CAPTION>
Principal
Amount Value
- ----------- -----------
<C> <S> <C> <C>
UNITED STATES GOVERNMENT AND AGENCY
OBLIGATIONS (Continued)
$ 3,000,000 United States Treasury Zero Coupons
0.00% Due 02/15/2000 $ 2,702,310
4,000,000 United States Treasury Zero Coupons
0.00% Due 08/15/2002 3,131,920
1,750,000 United States Government Repo.
5.82% Due 04/01/98 1,750,000
-----------
Total United States Government and Agency Obligations
(Cost $63,650,553) $64,603,207
-----------
Total Investments (Cost $63,886,356) 100.5% 64,838,996
Liabilities, net of other assets (0.5%) (308,629)
----- -----------
Net Assets 100.0% $64,530,367
----- -----------
----- -----------
</TABLE>
See Notes to Financial Statements 36
<PAGE>
INTERMEDIATE-TERM BOND FUND (CONTINUED)
Statement of Assets and Liabilities March 31, 1998 (Unaudited)
---------------------------------------------------------------
<TABLE>
<S> <C> <C>
ASSETS:
Investments in securities at value (Cost
$63,886,356)--Note 2 (A) $64,838,996
Receivable for units sold 17,070
Interest receivable 697,339
Cash 14,061
Other assets 10,420
-----------
65,577,886
LIABILITIES:
Payable for investments purchased 863,486
Payable for units redeemed 102,855
Payable to investment managers 20,563
Accrued expenses 60,615 1,047,519
-------- -----------
NET ASSETS at value, applicable to 1,980,859 outstanding
units of beneficial interest--Note 5 $64,530,367
-----------
-----------
NET ASSET VALUE offering and redemption price per unit
($64,530,367 divided by 1,980,859 units) $ 32.58
-----------
-----------
</TABLE>
Statement of Operations Six Months Ended March 31, 1998
(Unaudited)
---------------------------------------------------------------
<TABLE>
<S> <C> <C>
INVESTMENT INCOME:
Income:
Interest $2,349,787
----------
Total Income $2,349,787
Expenses:
Investment manager's fees--Note 3(A) 122,523
Shareholder servicing fees and expenses--Note 3(B) 167,516
Custodian fees and expenses 7,652
Legal and auditing fees 9,105
Consultant fees 6,372
Trustees' fees and expenses--Note 3(C) 13,145
Other 33,323
----------
Total Expenses 359,636
----------
INVESTMENT INCOME--NET 1,990,151
REALIZED AND UNREALIZED GAIN ON INVESTMENTS--Note 4:
Net realized gain on investments 192,346
Unrealized (depreciation) on investments (99,191)
----------
NET REALIZED AND UNREALIZED GAIN ON INVESTMENTS 93,155
----------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $2,083,306
----------
----------
</TABLE>
See Notes to Financial Statements
37
<PAGE>
INTERMEDIATE--TERM BOND FUND (CONTINUED)
Statement of Changes in Net Assets
---------------------------------------------------------------
<TABLE>
<CAPTION>
Six Months
Ended Year Ended
3/31/98 9/30/97
(Unaudited) (Audited)
----------- -----------
<S> <C> <C>
OPERATIONS:
Investment income--net $ 1,990,151 $ 4,223,168
Net realized gain 192,346 786,866
Net unrealized appreciation (depreciation) (99,191) 321,150
----------- -----------
Net increase in net assets resulting from operations 2,083,306 5,331,184
----------- -----------
CAPITAL TRANSACTIONS--Note 5:
Value of units sold 2,814,518 17,101,876
Value of units redeemed (8,756,225) (28,798,252)
----------- -----------
Net (decrease) in net assets resulting from capital transactions (5,941,707) (11,696,376)
----------- -----------
Net (decrease) (3,858,401) (6,365,192)
NET ASSETS at beginning of period 68,388,768 74,753,960
----------- -----------
NET ASSETS at end of period $64,530,367 $68,388,768
----------- -----------
----------- -----------
</TABLE>
See Notes to Financial Statements
38
<PAGE>
SHORT-TERM INVESTMENT FUND
Statement of Investments
March 31, 1998 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Principal
Amount Value
- ---------- -----------
<C> <S> <C> <C>
CORPORATE BONDS 7.3%
$ 260,000 Mid America Energy
5.05% Due 10/15/1998 $ 258,866
300,000 Merrill Lynch & Co.
5.05% Due 05/20/1998 299,664
250,000 Southwestern Bell
5.50% Due 04/20/1998 249,997
850,000 Georgia Power
5.50% Due 04/01/1998 850,000
-----------
Total Corporate Bonds (Cost $1,658,723) 1,658,527
-----------
UNITED STATES GOVERNMENT AND AGENCY
OBLIGATIONS 91.9%
$ 159,783 Federal Farm Credit Bank
5.79% Due 03/01/1999 $ 159,590
55,000 Federal Farm Credit Bank
5.70% Due 11/03/1998 54,981
250,000 Federal Home Loan Bank
5.42% Due 12/08/1998 249,335
500,000 Federal Home Loan Bank
5.25% Due 04/29/1998 499,795
515,000 Federal Home Loan Bank
5.27% Due 05/13/1998 514,951
100,000 Federal Home Loan Bank
5.215% Due 07/08/1998 99,842
30,303 Federal Home Loan Bank
5.15% Due 09/01/1998 30,196
100,000 Federal Home Loan Bank
5.04% Due 10/01/1998 99,672
250,000 Federal Home Loan Bank
5.512% Due 02/16/1999 249,295
500,000 Federal Home Loan Bank
5.905% Due 10/21/1998 500,401
30,000 Federal Home Loan Bank
5.71% Due 11/20/1998 29,990
250,000 Federal Home Loan Bank
5.575% Due 03/02/1999 249,343
129,195 Federal Home Loan Mortgage Corp.
Pool 90320 6.00% Due 01/01/1999 129,430
255,297 Federal Home Loan Mortgage Corp.
Pool 71994 5.50% Due 02/01/1999 254,115
500,000 Federal Home Loan Mortgage Corp.
5.70% Due 02/02/1999 500,194
350,000 Federal Home Loan Mortgage Corp.
5.31% Due 04/29/1998 349,904
600,000 Federal Home Loan Mortgage Corp.
5.55% Due 09/07/1998 600,680
<CAPTION>
Principal
Amount Value
- ---------- -----------
<C> <S> <C> <C>
UNITED STATES GOVERNMENT AND AGENCY
OBLIGATIONS (Continued)
$ 100,000 Federal Home Loan Mortgage Corp.
5.55% Due 09/08/1998 $ 100,114
500,000 Federal Home Loan Mortgage Corp.
4.77% Due 09/14/1998 497,894
425,000 Federal Home Loan Mortgage Corp.
4.75% Due 09/17/1998 422,602
100,000 Federal Home Loan Mortgage Corp.
5.30% Due 10/26/1998 99,994
100,000 Federal Home Loan Mortgage Corp.
5.50% Due 10/30/1998 99,934
300,000 Federal Home Loan Mortgage Corp.
5.84% Due 04/08/1998 299,996
750,000 Federal National Mortgage Association
5.25% Due 05/13/1998 749,505
250,000 Federal National Mortgage Association
5.35% Due 08/12/1998 249,606
500,000 Federal National Mortgage Association
4.70% Due 09/10/1998 497,179
500,000 Federal National Mortgage Association
5.16% Due 08/26/1998 499,006
250,000 Federal National Mortgage Association
5.55% Due 09/08/1998 250,285
250,000 Federal National Mortgage Association
5.35% Due 10/13/1998 250,070
40,000 Federal National Mortgage Association
4.75% Due 10/26/1998 39,790
200,000 Federal National Mortgage Association
5.42% Due 11/02/1998 199,882
500,000 Federal National Mortgage Association
5.75% Due 02/09/1999 500,262
350,000 Federal National Mortgage Association
5.52% Due 04/13/1998 349,975
300,000 Federal National Mortgage Association
Medium Term Note
5.25% Due 04/22/1998 299,881
700,000 Federal National Mortgage Association
5.10% Due 04/28/1998 699,691
600,000 Federal National Mortgage Association
Medium Term Note
5.20% Due 04/30/1998 599,715
100,000 Federal National Mortgage Association
5.41% Due 06/25/1998 99,950
200,000 Federal National Mortgage Association
5.32% Due 07/01/1998 199,866
</TABLE>
See Notes to Financial Statements 39
<PAGE>
SHORT-TERM INVESTMENT FUND (CONTINUED)
Statement of Investments
March 31, 1998 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Principal
Amount Value
- ---------- -----------
UNITED STATES GOVERNMENT AND AGENCY
OBLIGATIONS (Continued)
<C> <S> <C> <C>
$9,400,000 Federal Home Loan Bank
0.00% Due 04/01/1998 $ 9,400,000
-----------
Total United States Government and Agency
Obligations (Cost $20,970,457) $20,976,911
-----------
Total Investments (Cost $22,629,180) 99.2% $22,635,438
Other Assets, Less Liabilities 0.8% 185,897
----- -----------
Net Assets 100.0% $22,821,335
----- -----------
----- -----------
</TABLE>
See Notes to Financial Statements 40
<PAGE>
SHORT-TERM INVESTMENT FUND (CONTINUED)
Statement of Assets and Liabilities March 31, 1998 (Unaudited)
---------------------------------------------------------------
<TABLE>
<S> <C> <C>
ASSETS:
Investments in securities at value (Cost
$22,629,180)--Note 2(A) $22,635,438
Receivable for units sold 29,294
Interest receivable 200,166
Cash 3,056
Other assets 18,021
-----------
22,885,975
LIABILITIES:
Payable for units redeemed $ 11,192
Payable to investment managers 4,854
Accrued expenses 48,594 64,640
-------- -----------
NET ASSETS at value, applicable to 1,049,303 outstanding
units of beneficial interest--Note 5 $22,821,335
-----------
-----------
NET ASSET VALUE offering and redemption price per unit
($22,821,335 divided by 1,049,303 units) $ 21.75
-----------
-----------
</TABLE>
Statement of Operations Six Months Ended March 31, 1998
(Unaudited)
---------------------------------------------------------------
<TABLE>
<S> <C> <C>
INVESTMENT INCOME:
Income:
Interest $ 743,629
---------
Total Income $ 743,629
Expenses:
Investment manager's fees--Note 3(A) 32,487
Shareholder servicing fees and expenses--Note 3(B) 76,917
Custodian fees and expenses 8,117
Legal and auditing fees 8,225
Consultant fees 6,375
Trustees' fees and expenses--Note 3(C) 13,145
Other 23,360
---------
Total Expenses 168,626
Less expense reimbursement--Note 3(A) (63,885)
Net Expenses 104,741
---------
INVESTMENT INCOME--NET 638,888
REALIZED AND UNREALIZED GAIN ON INVESTMENTS--Note 4:
Realized gain on investments 1
Unrealized (depreciation) on investments (10,333)
---------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS (10,332)
---------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 628,556
---------
---------
</TABLE>
See Notes to Financial Statements
41
<PAGE>
SHORT-TERM INVESTMENT FUND (CONTINUED)
Statement of Changes in Net Assets
---------------------------------------------------------------
<TABLE>
<CAPTION>
Six Months
Ended Year Ended
3/31/98 9/30/97
(Unaudited) (Audited)
----------- -----------
<S> <C> <C>
OPERATIONS:
Investment income--net $ 638,888 $ 1,196,927
Net realized gain 1 --
Net unrealized appreciation (depreciation) (10,333) 22,137
----------- -----------
Net increase in net assets resulting from operations 628,556 1,219,064
----------- -----------
CAPITAL TRANSACTIONS--Note 5:
Value of units sold 36,517,597 19,468,323
Value of units redeemed (41,345,853) (19,334,439)
----------- -----------
Net increase (decrease) in net assets resulting from capital
transactions (4,828,256) 133,884
----------- -----------
Net increase (decrease) (4,199,700) 1,352,948
NET ASSETS at beginning of period 27,021,035 25,668,087
----------- -----------
NET ASSETS at end of period $22,821,335 $27,021,035
----------- -----------
----------- -----------
</TABLE>
See Notes to Financial Statements
42
<PAGE>
NOTES TO FINANCIAL STATEMENTS
NOTE 1--GENERAL
Participation in RSI Retirement Trust ("RSI") is limited to
IRA's and trusts established by eligible employers, which
include banks, savings banks, credit unions, savings and loan
associations and other organizations determined by the Trustees
of RSI to have business interests in common with organizations
participating in RSI. Such trusts are exempt from taxation
under Section 501(a) of the Internal Revenue Code ("Code") and
have been established under pension or profit sharing plans
which are qualified under Section 401 of the Code
("Participating Plans").
In order to provide investment products to Participating
Plans, RSI operates, pursuant to an Agreement and Declaration
of Trust amended effective as of August 31, 1984 ("Trust
Agreement"), as a series fund currently issuing as of March 31,
1998 seven classes of units of beneficial interest: Core Equity
Fund, Emerging Growth Equity Fund, Value Equity Fund,
International Equity Fund, Actively Managed Bond Fund,
Intermediate-Term Bond Fund and Short-Term Investment Fund
("Investment Funds"). The Trust Agreement was amended in 1984
to provide for the continued operation of RSI as an open-end
management investment company under the Investment Company Act
of 1940 ("Act"). Retirement System Distributors Inc.
("Distributors") acts as the distributor of the Investment
Funds' units of beneficial interest. The Distributor is a
wholly owned subsidiary of Retirement System Group Inc.
(RSGROUP-REGISTERED TRADEMARK-).
On April 24, 1992, the remaining unitholders of RSI's
Dedicated Bond Fund sold their units and the proceeds were used
to purchase units in other RSI fixed-income funds. The
Dedicated Bond Fund has been inactive subsequent to this date,
but may be reactivated again, should a number of clients elect
to "immunize" their retiree liabilities.
The financial statements of the Investment Funds are
presented on a combined and individual basis. The combined
financial statements should be read in conjunction with the
individual financial statements.
NOTE 2--SIGNIFICANT ACCOUNTING POLICIES
(A) SECURITIES VALUATION: Except for debt securities with
remaining maturities of 60 days or less, investments for
which market prices are available are valued as follows:
(1)each listed security is valued at its closing price
obtained from the respective exchange on which the
security is listed, or, if there were no sales on that
day, at its last reported closing or bid price.
(2)each unlisted security quoted on the NASDAQ is valued at
the last current bid price obtained from the NASDAQ;
(3)United States Government and agency obligations and
certain other debt obligations are valued based upon bid
quotations from various market makers for identical or
similar obligations.
43
<PAGE>
(4)mortgage-backed securities and asset-backed securities
are valued with a cash flow model based on both the
pre-payment assumptions (Public Securities Association
median) and the price-yield spreads over comparable
United States Treasury Securities.
(5)short-term money market instruments (such as
certificates of deposit, bankers' acceptances and
commercial paper) are valued by bid quotations or by
reference to bid quotations of available yields for
similar instruments of issuers with similar credit
rating.
Debt securities with remaining maturities of 60 days or
less are valued on the basis of amortized cost. In the absence
of an ascertainable market value, investments are valued at
their fair value as determined by the officers of RSI using
methods and procedures reviewed and approved by RSI's Trustees.
Investments and other assets and liabilities denominated in
foreign currencies are translated to US. dollars at the
prevailing rates of exchange. It is not practical to isolate
that portion of income arising from changes in the exchange
rates from the portion arising from changes in the market
prices of securities.
(B) SECURITIES TRANSACTIONS AND INVESTMENT INCOME: Securities
transactions are recorded on a trade date basis. Realized
gain and loss from securities transactions are recorded on
a specific cost basis. Dividend income is recognized on the
ex-dividend date or when the dividend information is known;
interest income, including, where applicable, amortization
of discount and premium on investments and zero coupon
bonds, is recognized on an accrual basis.
The Investment Funds may enter into repurchase agreements
with financial institutions, deemed to be creditworthy by
the Investment Funds' Manager, subject to the sellers'
agreement to repurchase and the Funds' agreement to resell
such securities at a mutually agreed upon price. Securities
purchased subject to repurchase agreements are deposited
with the Investment Funds' custodian and, pursuant to the
terms of the repurchase agreement, must have an aggregate
market value greater than or equal to the repurchase price
plus accrued interest at all times. If the value of the
underlying securities falls below the value of the
repurchase price plus accrued interest, the Investment
Funds will require the seller to deposit additional
collateral by the next business day. If the request for
additional collateral is not met, or the seller defaults on
its repurchase obligation, the Investment Funds maintain
the right to sell the underlying securities at market value
and may claim any resulting loss against the seller.
(C) DIVIDENDS TO UNITHOLDERS: RSI does not normally declare
nor pay dividends on its net investment income or capital
gains.
(D) FEDERAL INCOME TAXES: RSI has received a determination
letter from the Internal Revenue Service stating that it is
exempt from taxation under
44
<PAGE>
Section 501(a) of the Internal Revenue Code with respect to
funds derived from Participating Plans which are pension or
profit sharing trusts maintained in conformity with Section
401 of the Code.
(E) ACCOUNTING ESTIMATES: The preparation of financial
statements in conformity with generally accepted accounting
principles requires management to make estimates and
assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent liabilities at the
date of the financial statements and the reported amounts
of increase and decrease in net assets from operations
during the period. Actual results could differ from those
estimates.
(F) OTHER: RSI accounts separately for the assets, liabilities
and operations of each Investment Fund. Expenses directly
attributed to each Investment Fund are charged to that
Investment Fund's operations; expenses which are applicable
to all Investment Funds are allocated among them.
Administrative expenses incurred by RSI relating to the
administration of Plans of Participation are charged to
Full Participation Employers (as defined in the Trust
Agreement) and are not included in the operation of the
Investment funds.
The Investment Funds may enter into financial futures
contracts which require initial margin deposits of cash or
U.S. Government securities equal to approximately 10% of
the value of the contract. During the period the financial
futures are open, changes in the value of the contracts are
recognized by "marking to market" on a daily basis to
reflect the market value of the contracts at the close of
each day's trading. Accordingly, variation margin payments
are made or received to reflect daily unrealized gains or
losses. The Investment Fund is exposed to market risk as a
result of movements in securities, values and interest
rates.
(G) OPTIONS VALUATION: The Investment Funds may write call
options on equity securities. Premiums received for call
options written are recorded as a liability and "marked to
market" daily to reflect the current value of the option
written. If the written option is exercised prior to
expiration, the premium received is treated as a realized
gain. If the written option is exercised, the premium
received is added to the sale proceeds of the underlying
security.
NOTE 3--INVESTMENT MANAGERS' FEES AND OTHER TRANSACTIONS WITH
AFFILIATES
(A) Retirement System Investors Inc. ("Investors") is the
Investment Advisor for each Investment Fund. Investors has
retained sub-advisors to manage the International Equity
Fund and the Emerging Growth Equity Fund. Investors acts as
Investment Manager to the remaining Trust Investment Funds,
and in the case of all Investment Funds, exercises general
oversight with respect to the
45
<PAGE>
portfolio management, including reporting of manager
performance to the Trustees and Investment Committee,
compliance matters, sub-advisory portfolio analysis, and
presentations to unitholders.
Beginning April 1, 1997, HLM Management Company, Inc.
became one of the two sub-advisors to the Emerging Growth
Equity Fund, replacing The Putnam Advisory Company, Inc.
Friess Associates, Inc. continues to be the other sub-
advisor to the Emerging Growth Equity Fund.
Fees incurred by Investors pursuant to the provisions of
its investment management contracts are payable monthly to
Investors and quarterly to all sub-advisors and are
computed based on the value of the net assets of each
Investment Fund determined on a monthly or quarterly bases
as appropriate at the rates listed in the following table.
<TABLE>
<CAPTION>
INVESTMENT FUND INVESTMENT MANAGER FEE
- ----------------------- ------------------------------------- ------------------------------
<S> <C> <C>
Core Equity Fund Retirement System Investors Inc. .60% on first $50 million
.50% on next $150 million,
and .40% over $200 million
Value Equity Fund Retirement System Investors Inc. .60% on first $10 million,
.50% on next $10 million,
.40% on next $20 million,
.30% on next $20 million,
.20% on next $40 million,
.15% on next $50 million,
and .10% over $150 million
Emerging Growth Friess Associates, Inc. 1.00%
Equity Fund (Sub-adviser)
HLM Management Company, Inc. 1.00% on first $25 million
(Sub-adviser, commencing 4/1/97) .80% on next $25 million,
and .60% over $50 million
International Morgan Grenfell Investment Services .60% on first $50 million,
Equity Fund Limited (Sub-adviser) and .50% over $50 million
Actively Managed Bond Retirement System Investors Inc. .40% on first $50 million,
Fund .30% on next $100 million,
and .20% over $150 million
Intermediate-Term Retirement System Investors Inc. .40% on first $50 million,
Bond Fund .30% on next $100 million,
and .20% over $150 million
Short-Term Retirement System Investors Inc. .25 on first $50 million,
Investment Fund and .20% over $50 million
</TABLE>
RSI's investment management agreement with Investors
provides for RSI to receive a management fee of 0.20% per
annum of the average daily net assets of the Investment
Funds that employ a sub-advisor. For the period ended
46
<PAGE>
March 31, 1998, Investors has voluntarily waived a portion
of its investment manager's fee from the Short-Term
Investment Fund amounting to $63,885, to limit the Fund's
annual expenses to 0.80% of average net assets.
(B) Shareholder servicing fees and expenses for the period
ended consist of fees paid to Retirement System Consultants
Inc., (a subsidiary of RSGroup) under a contract for
providing administrative services for the Investment Funds.
The fee arrangement applicable for each of the investment
funds is as follows:
<TABLE>
<CAPTION>
AVERAGE NET ASSETS FEE
- --------------------------------- ---------
<S> <C>
First $25 million .60%
Next $25 million .50%
Next $25 million .40%
Next $25 million .30%
Over $100 million .20%
</TABLE>
(C) Each Trustee who is not an officer of RSI receives an
annual fee of $9,500 and a fee of $950 per meeting
attended, except that such fee is $400 for a telephonic
meeting. Such Trustees also participate in a deferred
compensation plan which permits each Trustee to defer
payment of a portion of their fees. A Trustee and several
officers of RSI are also officers of RSGroup and its
subsidiaries.
NOTE 4--SECURITIES TRANSACTIONS
The following summarizes the securities transactions, other
than short-term securities, by the various Investment Funds for
the period ended March 31, 1998:
<TABLE>
<CAPTION>
PURCHASES SALES
---------------- ----------------
<S> <C> <C>
Core Equity Fund $ 1,082,878 $ 41,857,743
Value Equity Fund 36,631,273 32,492,868
Emerging Growth Equity Fund 68,812,082 73,684,863
International Equity Fund 22,561,820 18,840,113
Actively Managed Bond Fund 189,459,502 191,072,415
Intermediate-Term Bond Fund 91,036,834 93,988,848
</TABLE>
Net unrealized appreciation (depreciation) consisting of
gross unrealized appreciation and gross unrealized depreciation
at March 31, 1998 for each of the Investment Funds was as
follows:
<TABLE>
<CAPTION>
NET UNREALIZED GROSS GROSS
APPRECIATION UNREALIZED UNREALIZED
(DEPRECIATION) APPRECIATION DEPRECIATION
---------------- ---------------- --------------
<S> <C> <C> <C>
Core Equity Fund $ 131,537,263 $ 131,568,700 $ (31,437)
Value Equity Fund 14,579,905 14,939,638 (359,733)
Emerging Growth Equity Fund 17,823,677 18,489,336 (665,659)
International Equity Fund 6,231,538 7,984,685 (1,753,147)
Actively Managed Bond Fund 4,751,086 5,038,059 (286,973)
Intermediate-Term Bond Fund 952,654 998,494 (45,840)
Short-Term Investment Fund 6,454 8,611 (2,207)
</TABLE>
47
<PAGE>
As of March 31, 1998, the International Equity Fund had an
outstanding forward currency contract as set forth below. These
contracts are reported in the financial statements at the
Fund's net gain of $107,918, which is the difference between
the forward foreign exchange rate at the dates of entry into
the contracts and the forward rates at March 31, 1998.
<TABLE>
<CAPTION>
CONTRACTS TO SELL
---------------------------------------------------------
<C> <S> <C>
179,940,000 Japanese Yen for U.S. $1,467,365 5/13/1998 107,918
-----------
</TABLE>
The following summarizes the market value of securities
that were on loan to brokers and the value of securities and
cash held as collateral for these loans at March 31, 1998:
<TABLE>
<CAPTION>
VALUE OF
SECURITIES VALUE OF
LOANED COLLATERAL
-------------- --------------
<S> <C> <C>
Core Equity Fund $ 6,575,321 $ 6,708,100
Value Equity Fund 3,429,318 3,501,243
Emerging Growth Equity Fund 16,684,256 17,020,488
International Equity Fund 1,272,550 1,272,550
Actively Managed Bond Fund 9,360,550 4,481,688
Intermediate Term Bond Fund 3,039,440 1,216,161
</TABLE>
These securities lending arrangements may result in
significant credit exposure in the event the counterparty to
the transaction was unable to fulfill its contractual
obligations. In accordance with industry practice, the
securities lending agreements are generally collaterized by
cash or securities with a market value in excess of the
Investment Funds obligation under the contract. The Investment
Funds attempt to minimize credit risk associated with these
activities by monitoring broker credit exposure and collateral
values on a daily basis and requiring additional collateral to
be deposited with or returned to the Investment Funds when
deemed necessary.
In June 1996, the Financial Accounting Standards Board
issued Statement of Financial Accounting Standards No. 125,
"Accounting for Transfers and Servicing of Financial Assets and
Extinguishments of Liabilities" ("SFAS 125"). SFAS 125 provides
accounting and reporting standards for transfers of financial
assets, including repurchase agreements and securities lending
arrangements, and establishes new requirements for pledged
collateral. RSI has adopted this pronouncment effective January
1, 1998.
For the period ended March 31, 1998 the Emerging Growth
Equity Fund, Value Equity Fund, and the International Equity
Fund each had expenses paid through brokerage/service
arrangements which amounted to $29,275, $2,357 and $10,000
respectively.
48
<PAGE>
NOTE 5--CAPITAL TRANSACTIONS:
At March 31, 1998 there were an unlimited number of units
of beneficial interest authorized for each Investment Fund.
Transactions in the units of beneficial interest of each
Investment Fund for the period ended March 31, 1998 were as
follows:
<TABLE>
<CAPTION>
Core Equity Value Equity
Fund Fund
----------------------- ----------------------
Units Amount Units Amount
--------- ------------ --------- -----------
<S> <C> <C> <C> <C>
Units sold 171,092 $ 13,341,210 277,740 $17,035,969
Units redeemed (610,208) (47,719,635) (134,217) (7,792,576)
--------- ------------ --------- -----------
Net increase
(decrease) (439,116) $(34,378,425) 143,523 $ 9,243,393
--------- ------------ --------- -----------
--------- ------------ --------- -----------
</TABLE>
<TABLE>
<CAPTION>
Emerging Growth International
Equity Fund Equity Fund
----------------------- ----------------------
Units Amount Units Amount
--------- ------------ --------- -----------
<S> <C> <C> <C> <C>
Units sold 87,617 $ 6,757,926 169,033 $ 8,263,957
Units redeemed (135,193) (10,312,134) (70,492) (3,346,131)
--------- ------------ --------- -----------
Net increase
(decrease) (47,576) $ (3,554,208) 98,541 $ 4,917,826
--------- ------------ --------- -----------
--------- ------------ --------- -----------
</TABLE>
<TABLE>
<CAPTION>
Actively Managed Intermediate-Term
Bond Fund Bond Fund
----------------------- ----------------------
Units Amount Units Amount
--------- ------------ --------- -----------
<S> <C> <C> <C> <C>
Units sold 226,471 $ 7,909,405 88,893 $ 2,814,518
Units redeemed (405,042) (14,052,342) (275,472) (8,756,225)
--------- ------------ --------- -----------
Net (decrease) (178,571) $ (6,142,937) (186,579) $(5,941,707)
--------- ------------ --------- -----------
--------- ------------ --------- -----------
</TABLE>
<TABLE>
<CAPTION>
Short-Term
Investment Fund
------------------------
Units Amount
---------- ------------
<S> <C> <C>
Units sold 1,699,721 $ 36,517,597
Units redeemed (1,923,202) (41,345,853)
---------- ------------
Net (decrease) (223,481) $ (4,828,256)
---------- ------------
---------- ------------
</TABLE>
49
<PAGE>
Transactions in the units of beneficial interest of each
Investment Fund for the year ended September 30, 1997 were as
follows:
<TABLE>
<CAPTION>
Core Equity Value
Fund Equity Fund
------------------------ -----------------------
Units Amount Units Amount
---------- ------------ --------- ------------
<S> <C> <C> <C> <C>
Units sold 396,478 $ 25,795,510 227,658 $ 11,173,465
Units redeemed (1,449,971) (97,429,664) (491,588) (23,923,187)
---------- ------------ --------- ------------
Net (decrease) (1,053,493) $(71,634,154) (263,930) $(12,749,722)
---------- ------------ --------- ------------
---------- ------------ --------- ------------
</TABLE>
<TABLE>
<CAPTION>
Emerging Growth International
Equity Fund Equity Fund
----------------------- -----------------------
Units Amount Units Amount
--------- ------------ --------- ------------
<S> <C> <C> <C> <C>
Units sold 227,146 $ 15,421,504 199,932 $ 9,216,371
Units redeemed (516,504) (36,204,646) (384,652) (17,999,512)
--------- ------------ --------- ------------
Net (decrease) (289,358) $(20,783,142) (184,720) $ (8,783,141)
--------- ------------ --------- ------------
--------- ------------ --------- ------------
</TABLE>
<TABLE>
<CAPTION>
Actively Managed Intermediate-Term
Bond Fund Bond Fund
------------------------ -----------------------
Units Amount Units Amount
---------- ------------ --------- ------------
<S> <C> <C> <C> <C>
Units sold 1,111,406 $ 36,098,759 559,693 $ 17,101,876
Units redeemed (1,652,565) (53,451,868) (943,239) (28,798,252)
---------- ------------ --------- ------------
Net (decrease) (541,159) $(17,353,109) (383,546) $(11,696,376)
---------- ------------ --------- ------------
---------- ------------ --------- ------------
</TABLE>
<TABLE>
<CAPTION>
Short-Term
Investment Fund
-----------------------
Units Amount
--------- ------------
<S> <C> <C>
Units sold 943,098 $ 19,468,323
Units redeemed (938,236) (19,334,439)
--------- ------------
Net increase 4,862 $ 133,884
--------- ------------
--------- ------------
</TABLE>
50
<PAGE>
Net Assets at March 31, 1998 are comprised as follows:
<TABLE>
<CAPTION>
Emerging
Core Equity Growth Value Equity International
Fund Equity Fund Fund Equity Fund
------------- ------------ ------------ -----------
<S> <C> <C> <C> <C>
Paid-in capital (deficit) $(136,569,351) $(38,820,569) $(24,178,042) $ (183,660)
Accumulated income (loss) 47,852,948 (3,397,403) 18,967,224 (1,721,722)
Accumulated realized gain 162,506,543 108,751,102 67,686,605 36,840,625
Unrealized appreciation 131,527,581 17,823,677 14,581,426 6,341,381
------------- ------------ ------------ -----------
$ 205,317,721 $ 84,356,807 $ 77,057,213 $41,276,624
------------- ------------ ------------ -----------
------------- ------------ ------------ -----------
</TABLE>
<TABLE>
<CAPTION>
Short-Term Actively
Investment Intermediate-Term Managed
Fund Bond Fund Bond Fund
-------------- --------------- ------------
<S> <C> <C> <C>
Paid-in capital (deficit) $(20,023,574) $ (76,645,976) $(54,169,658)
Accumulated income 41,508,736 124,796,803 161,193,695
Accumulated realized gain 1,329,915 15,426,900 35,493,381
Unrealized appreciation 6,258 952,640 4,751,086
-------------- --------------- ------------
$ 22,821,335 $ 64,530,367 $147,268,504
-------------- --------------- ------------
-------------- --------------- ------------
</TABLE>
51
<PAGE>
NOTE 6--FINANCIAL INSTRUMENTS WITH OFF-BALANCE SHEET RISK
The Investment Funds activity during the period in writing
equity call options had off-balance sheet risk of accounting
loss. These financial instruments involve market risk in excess
of the amount recognized in the Statement of Assets and
Liabilities. A written equity call option obligates the
Investment Funds to deliver the underlying security upon
exercise by the holder of the option. The Investment Funds
cover options written by owning the underlying security.
A summary of the Investment Funds option transactions
written for the period follows:
<TABLE>
<CAPTION>
Number of
Options Premiums
Contracts Received
------------- -----------
<S> <C> <C>
Core Equity Fund
Contracts outstanding at September 30, 1997 0 $ 0
Options written 293 101,391
Options exercised 0 0
Options expired (125) (25,437)
--- -----------
Contracts outstanding at March 31, 1998 168 $ 75,954
--- -----------
--- -----------
</TABLE>
<TABLE>
<CAPTION>
Number of
Options Premiums
Contracts Received
------------- -----------
<S> <C> <C>
Value Equity Fund
Contracts outstanding at September 30, 1997 46 $ 17,947
Options written 41 14,078
Options exercised 0 0
Options expired (83) (30,429)
--- -----------
Contracts outstanding at March 31, 1998 4 $ 1,596
--- -----------
--- -----------
</TABLE>
52
<PAGE>
NOTE 7--FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
CORE EQUITY FUND
--------------------------------------------------------------
Period Year Year Year Year Year
Ended Ended Ended Ended Ended Ended
3/31/98 9/30/97 9/30/96 9/30/95 9/30/94 9/30/93
------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C>
Per Unit Operating
Performance:*
(for a unit outstanding
throughout the period)
Net Asset Value, Beginning of
period $76.11 $56.57 $46.71 $35.57 $34.49 $30.09
------- ------- ------- ------- ------- -------
Income from Investment Operations:
Investment income--net 0.26 0.60 0.72 0.74 0.54 0.56
Net realized and unrealized gain
on investments 11.00 18.94 9.14 10.40 0.54 3.84
------- ------- ------- ------- ------- -------
Total from Investment Operations 11.26 19.54 9.86 11.14 1.08 4.40
------- ------- ------- ------- ------- -------
Net Asset Value, End of the Period $87.37 $76.11 $56.57 $46.71 $35.57 $34.49
------- ------- ------- ------- ------- -------
------- ------- ------- ------- ------- -------
Total Return+ 14.79% 34.54% 21.11% 31.32% 3.13% 14.62%
Ratios/Supplemental Data
Ratios to Average Net Assets++
Expenses (0.94)% (0.90)% (0.92)% (0.98)% (1.01)% (0.99)%
Investment income--net 0.60% 0.92% 1.40% 1.86% 1.56% 1.74%
Portfolio Turnover Rate+ 0.55% 5.68% 9.95% 7.91% 6.47% 13.41%
Average Commission Rate Paid (per
share)+++ $0.0492 $0.0595 $0.0500 -- -- --
Net Assets at End of the Period
($1,000's) $205,318 $212,273 $217,356 $189,942 $141,544 $146,137
</TABLE>
* Using average units basis.
+ Not annualized for periods of less than a year.
++ Annualized for periods of less than a year.
+++ Required by regulations issued in 1995.
53
<PAGE>
<TABLE>
<CAPTION>
VALUE EQUITY FUND
--------------------------------------------------------------
Period Year Year Year Year Year
Ended Ended Ended Ended Ended Ended
3/31/98 9/30/97 9/30/96 9/30/95 9/30/94 9/30/93
------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C>
Per Unit Operating
Performance:*
(for a unit outstanding
throughout the period)
Net Asset Value, Beginning of period $57.36 $39.67 $32.63 $27.05 $26.48 $22.94
------- ------- ------- ------- ------- -------
Income from Investment Operations:
Investment income--net 0.25 0.60 0.72 0.93 0.79 0.70
Net realized and unrealized gain (loss)
on investments 6.80 17.09 6.32 4.65 (0.22) 2.84
------- ------- ------- ------- ------- -------
Total from Investment Operations 7.05 17.69 7.04 5.58 0.57 3.54
------- ------- ------- ------- ------- -------
Net Asset Value, End of the Period $64.41 $57.36 $39.67 $32.63 $27.05 $26.48
------- ------- ------- ------- ------- -------
------- ------- ------- ------- ------- -------
Total Return+ 12.29% 44.59% 21.58% 20.63% 2.15% 15.43%
Ratios/Supplemental Data
Ratios to Average Net Assets++
Expenses** (1.18)% (1.20)% (1.20)% (1.32)% (1.41)% (1.70)%
Investment income--net 0.86% 1.26% 1.98% 3.24% 3.02% 2.83%
Portfolio Turnover Rate+ 54.10% 99.25% 61.53% 67.06% 40.41% 54.46%
Average Commission Rate Paid (per
share)+++ $0.0301 $0.0601 $0.0100 -- -- --
Net Assets at End of the Period
($1,000's) $77,057 $60,389 $52,231 $43,824 $35,603 $38,104
</TABLE>
* Using average units basis.
** Ratio reflects fees paid with brokerage commissions only
for the six months ended March 31, 1998 and the years
ended 9/30/97, 9/30/96 and 9/30/95.
+ Not annualized for periods of less than a year.
++ Annualized for periods of less than a year.
+++ Required by regulations issued in 1995.
54
<PAGE>
<TABLE>
<CAPTION>
EMERGING GROWTH
EQUITY FUND
--------------------------------------------------------------
Period Year Year Year Year Year
Ended Ended Ended Ended Ended Ended
3/31/98 9/30/97 9/30/96 9/30/95 9/30/94 9/30/93
------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C>
Per Unit Operating
Performance:*
(for a unit outstanding
throughout the period)
Net Asset Value, Beginning of period $84.47 $67.07 $52.58 $35.96 $35.52 $24.26
------- ------- ------- ------- ------- -------
Income from Investment Operations:
Investment (loss)--net (0.37) (0.95) (0.90) (0.67) (0.57) (0.53)
Net realized and unrealized gain on
investments (2.73) 18.35 15.39 17.29 1.01 11.79
------- ------- ------- ------- ------- -------
Total from Investment Operations (3.10) 17.40 14.49 16.62 0.44 11.26
------- ------- ------- ------- ------- -------
Net Asset Value, End of the Period $81.37 $84.47 $67.07 $52.58 $35.96 $35.52
------- ------- ------- ------- ------- -------
------- ------- ------- ------- ------- -------
Total Return+ (3.67)% 25.94% 27.56% 46.22% 1.24% 46.41%
Ratios/Supplemental Data
Ratios to Average Net Assets++
Expenses** (1.92)% (1.98)% (1.91)% (2.12)% (2.08)% (2.27)%
Investment income--net (1.08)% (1.39)% (1.54)% (1.61)% (1.64)% (1.78)%
Portfolio Turnover Rate+ 92.49% 177.68% 150.40% 170.54% 114.15% 145.59%
Average Commission Rate Paid (per
share)+++ $0.0165 $0.0577 $0.0200 -- -- --
Net Assets at End of the Period
($1,000's) $84,357 $91,589 $92,136 $74,625 $48,293 $56,645
</TABLE>
* Using average units basis.
** Ratio reflects fees paid with brokerage commissions only
for the six months ended March 31, 1998 and the years
ended 9/30/97, 9/30/96 and 9/30/95.
+ Not annualized for periods of less than a year.
++ Annualized for periods of less than a year.
+++ Required by regulations issued in 1995.
55
<PAGE>
<TABLE>
<CAPTION>
INTERNATIONAL EQUITY FUND
--------------------------------------------------------------
Period Year Year Year Year Year
Ended Ended Ended Ended Ended Ended
3/31/98 9/30/97 9/30/96 9/30/95 9/30/94 9/30/93
------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C>
Per Unit Operating
Performance:*
(for a unit outstanding
throughout the period)
Net Asset Value, Beginning of
period $51.09 $45.25 $40.25 $38.08 $34.36 $28.27
------- ------- ------- ------- ------- -------
Income from Investment Operations:
Investment (loss)--net (0.14) (0.14) (0.08) (0.02) (0.09) (0.21)
Net realized and unrealized gain
on investments 1.35 5.98 5.08 2.19 3.81 6.30
------- ------- ------- ------- ------- -------
Total from Investment Operations 1.21 5.84 5.00 2.17 3.72 6.09
------- ------- ------- ------- ------- -------
Net Asset Value, End of the Period $52.30 $51.09 $45.25 $40.25 $38.08 $34.36
------- ------- ------- ------- ------- -------
------- ------- ------- ------- ------- -------
Total Return+ 2.37% 12.91% 12.42% 5.70% 10.83% 21.54%
Ratios/Supplemental Data
Ratios to Average Net Assets++
Expenses** (1.98)% (2.03)% (1.93)% (1.90)% (1.96)% (2.83)%
Investment income--net (1.02)% (0.29)% (0.20)% (0.07)% (0.25)% (0.68)%
Portfolio Turnover Rate+ 57.42% 62.18% 51.29% 51.40% 44.25% 55.02%
Average Commission Rate Paid (per
share)+++ $0.0295 $0.0200 $0.0200 -- -- --
Net Assets at End of the Period
($1,000's) $41,277 $35,276 $39,602 $31,143 $28,672 $21,769
</TABLE>
* Using average units basis.
** Ratio reflects fees paid with brokerage commissions only
for the six months ended March 31, 1998 and the years
ended 9/30/97, 9/30/96 and 9/30/95.
+ Not annualized for periods of less than a year.
++ Annualized for periods of less than a year.
+++ Required by regulations issued in 1995.
56
<PAGE>
<TABLE>
<CAPTION>
ACTIVELY MANAGED
BOND FUND
--------------------------------------------------------------
Period Year Year Year Year Year
Ended Ended Ended Ended Ended Ended
3/31/98 9/30/97 9/30/96 9/30/95 9/30/94 9/30/93
------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C>
Per Unit Operating
Performance:*
(for a unit outstanding
throughout the period)
Net Asset Value, Beginning of
period $33.89 $30.79 $29.58 $26.06 $27.43 $24.57
------- ------- ------- ------- ------- -------
Income from Investment Operations:
Investment income--net 1.10 2.04 1.80 1.64 1.47 1.23
Net realized and unrealized gain
(loss) on investments 0.39 1.06 (0.59) 1.88 (2.84) 1.63
------- ------- ------- ------- ------- -------
Total from Investment Operations 1.49 3.10 1.21 3.52 (1.37) 2.86
------- ------- ------- ------- ------- -------
Net Asset Value, End of the Period $35.38 $33.89 $30.79 $29.58 $26.06 $27.43
------- ------- ------- ------- ------- -------
------- ------- ------- ------- ------- -------
Total Return+ 4.40% 10.07% 4.09% 13.51% (4.99)% 11.64%
Ratios/Supplemental Data
Ratios to Average Net Assets++
Expenses (0.82)% (0.81)% (0.80)% (0.84)% (0.82)% (0.87)%
Investment income--net 6.30% 6.32% 5.94% 5.95% 5.51% 5.22%
Portfolio Turnover Rate+ 130.58% 69.29% 17.14% 18.21% 8.54% 170.16%
Net Assets at End of the Period
($1,000's) $147,269 $147,139 $150,304 $140,127 $136,210 $146,918
</TABLE>
* Using average units basis.
+ Not annualized for periods of less than a year.
++ Annualized for periods of less than a year.
57
<PAGE>
<TABLE>
<CAPTION>
INTERMEDIATE-TERM
BOND FUND
--------------------------------------------------------------
Period Year Year Year Year Year
Ended Ended Ended Ended Ended Ended
3/31/98 9/30/97 9/30/96 9/30/95 9/30/94 9/30/93
------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C>
Per Unit Operating
Performance:*
(for a unit outstanding
throughout the period)
Net Asset Value, Beginning of
period $31.55 $29.30 $28.01 $25.40 $25.95 $24.20
------- ------- ------- ------- ------- -------
Income from Investment Operations:
Investment income--net 0.98 1.78 1.74 1.66 1.46 1.48
Net realized and unrealized gain
(loss) on investments 0.05 0.47 (0.45) 0.95 (2.01) 0.27
------- ------- ------- ------- ------- -------
Total from Investment Operations 1.03 2.25 1.29 2.61 (0.55) 1.75
------- ------- ------- ------- ------- -------
Net Asset Value, End of the Period $32.58 $31.55 $29.30 $28.01 $25.40 $25.95
------- ------- ------- ------- ------- -------
------- ------- ------- ------- ------- -------
Total Return+ 3.26% 7.68% 4.61% 10.28% (2.12)% 7.23%
Ratios/Supplemental Data
Ratios to Average Net Assets++
Expenses (1.10)% (1.04)% (0.98)% (0.98)% (0.95)% (1.07)%
Investment income--net 6.10% 5.86% 6.06% 6.27% 5.68% 5.95%
Portfolio Turnover Rate+ 140.58% 67.95% 13.20% 15.95% 17.92% 12.39%
Net Assets at End of the Period
($1,000's) $64,530 $68,389 $74,754 $90,482 $89,780 $97,796
</TABLE>
* Using average units basis.
+ Not annualized for periods of less than a year.
++ Annualized for periods of less than a year.
58
<PAGE>
<TABLE>
<CAPTION>
SHORT-TERM
INVESTMENT FUND
--------------------------------------------------------------
Period Year Year Year Year Year
Ended Ended Ended Ended Ended Ended
3/31/98 9/30/97 9/30/96 9/30/95 9/30/94 9/30/93
------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C>
Per Unit Operating
Performance:*
(for a unit outstanding
throughout the period)
Net Asset Value, Beginning of
period $21.23 $20.24 $19.31 $18.36 $17.83 $17.43
------- ------- ------- ------- ------- -------
Income from Investment Operations:
Investment income--net 0.53 0.97 0.94 0.93 0.53 0.43
Net realized and unrealized gain
(loss) on investments (0.01) 0.02 (0.01) 0.02 0.00 (0.03)
------- ------- ------- ------- ------- -------
Total from Investment Operations 0.52 0.99 0.93 0.95 0.53 0.40
------- ------- ------- ------- ------- -------
Net Asset Value, End of the Period $21.75 $21.23 $20.24 $19.31 $18.36 $17.83
------- ------- ------- ------- ------- -------
------- ------- ------- ------- ------- -------
Total Return+ 2.45% 4.89% 4.82% 5.17% 2.97% 2.29%
Ratios/Supplemental Data
Ratios to Average Net Assets++
Expenses (0.80)% (0.80)% (0.80)% (0.80)% (0.80)% (0.89)%
Investment income--net 4.96% 4.67% 4.76% 4.94% 2.92% 2.43%
Decrease in above expense ratio
due to fee waiver 0.50% 0.45% 0.39% 0.34% 0.32% --%
Net Assets at End of the Period
($1,000's) $22,821 $27,021 $25,668 $27,360 $29,975 $35,117
</TABLE>
* Using average units basis.
+ Not annualized for periods of less than a year.
++ Annualized for periods of less than a year.
59
<PAGE>
THE INFORMATION CONTAINED HEREIN SHALL NOT BE CONSTRUED TO BE OR CONSTITUTE AN
OFFER OR SOLICITATION OF AN OFFER TO BUY UNITS IN THE RSI RETIREMENT TRUST.
SALES OF UNITS IN THE TRUST MAY BE MADE ONLY IN THOSE STATES WHERE SUCH UNITS
ARE EXEMPT FROM REGISTRATION OR HAVE BEEN QUALIFIED FOR SALE. TOTAL RETURNS ARE
BASED ON HISTORICAL RESULTS AND ARE NOT INTENDED TO INDICATE FUTURE PERFORMANCE.
FUTURE PERFORMANCE AND UNIT NET ASSET VALUE WILL FLUCTUATE SO THAT UNITS, IF
REDEEMED, MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL COST. THIS MATERIAL MUST
BE PRECEDED OR ACCOMPANIED BY A PROSPECTUS.
<PAGE>
OFFICERS
---------------------------------------------------------------
William Dannecker, President
James P. Coughlin, C.F.A., Executive Vice President and Chief
Investment Officer
Stephen P. Pollak, Esq., Executive Vice President, Counsel and
Secretary
Heidi Viceconte, Treasurer
John F. Meuser, Senior Vice President
Durando J. Saccente, Senior Vice President
Veronica A. Fisher, Vice President and Assistant Treasurer
Chris R. Kaufman, First Vice President
Herbert Kuhl, Jr., C.F.A., First Vice President
Stephen A. Hughes, Second Vice President
Deborah A. Modzelewski, Second Vice President
CONSULTANTS
---------------------------------------------------------------
Actuarial--Retirement System Consultants Inc.
Administrative and Recordkeeping--Retirement System Consultants
Inc.
Investments--Hewitt Associates
INVESTMENT MANAGERS
---------------------------------------------------------------
Friess Associates, Inc.
HLM Management Company, Inc.
Morgan Grenfell Investment Services Limited
Retirement System Investors Inc.
CUSTODIANS
---------------------------------------------------------------
The Chase Manhattan Bank
Custodial Trust Company
DISTRIBUTOR
---------------------------------------------------------------
Retirement System Distributors Inc.
TRANSFER AGENT
---------------------------------------------------------------
Retirement System Consultants Inc.
INDEPENDENT AUDITORS
---------------------------------------------------------------
McGladrey & Pullen, LLP
COUNSEL
---------------------------------------------------------------
Shereff, Friedman, Hoffman & Goodman, LLP
60
<PAGE>
BOARD OF TRUSTEES
---------------------------------------------------------------
Herbert G. Chorbajian
Chairman, President and Chief Executive Officer
ALBANK, FSB, NY
Candace Cox
Private Investments
James P. Cronin
President, Treasurer and Chief Executive Officer
The Dime Savings Bank, Norwich, CT
William Dannecker
President and Chief Executive Officer
Retirement System Group Inc., NY
Covington Hardee
Retired Chairman
The Lincoln Savings Bank, FSB, NY
Ralph L. Hodgkins, Jr.
Retired Chief Executive Officer
Mid Maine Savings Bank, FSB, ME
Maurice E. Kinkade
Director of Development
Maplebrook School
President, KINCO Management
Willliam G. Lillis
Real Estate Consultant
William A. McKenna, Jr.
Chairman, President and Chief Executive Officer
Ridgewood Savings Bank, Ridgewood, NY
William L. Schrauth
President and Chief Executive Officer
The Savings Banks of Utica, NY
William E. Swan
President and Chief Executive Officer
Lockport Savings Bank, NY
Raymond L. Willis
Private Investments
61
<PAGE>
SEMI-ANNUAL
REPORT
[LOGO]
RSI RETIREMENT TRUST
CORE EQUITY FUND
VALUE EQUITY FUND
EMERGING GROWTH EQUITY FUND
INTERNATIONAL EQUITY FUND
ACTIVELY MANAGED BOND FUND
INTERMEDIATE-TERM BOND FUND
SHORT-TERM INVESTMENT FUND
1998
BROKER/DEALER
[LOGO]
RETIREMENT SYSTEM
Distributors Inc.
P.O. Box 2064
Grand Central Station
New York, NY 10163-2064
