<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
1999
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
Combined Financial Statements............................................ 10
Financial Statements of Investment Funds............................. 12
Core Equity Fund..................................................... 12
Value Equity Fund.................................................... 16
Emerging Growth Equity Fund.......................................... 20
International Equity Fund............................................ 24
Actively Managed Bond Fund........................................... 28
Intermediate-Term Bond Fund.......................................... 35
Short-Term Investment Fund........................................... 41
Notes to Financial Statements............................................ 45
Officers, Consultants, Investment Managers,
Custodians, Distributor, Transfer Agent................................ 63
Board of Trustees........................................................ 64
</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 period covered by this report--the six-months ended March
31, 1999--was a very positive time for the economy in general,
and for RSI Retirement Trust in particular. The conditions that
have prevailed for the past several years--moderate to strong
economic growth, low inflation rates, favorable interest rates
and substantial cash inflow by mutual fund
investors--persisted, propelling the United States stock market
to record highs. The bond markets, however, reflected
lackluster results for the fiscal half year.
During this period, the Trust's funds turned in solid
performances, with six of the seven funds exceeding their
respective benchmarks, which are published by Lipper, Inc. In
fact, three of the four equity funds outperformed their Lipper
benchmarks by more than six percentage points. Perhaps even
more importantly, during the longer time period of 15 years,
the returns of five of the seven funds outperformed their
Lipper benchmarks. This is especially noteworthy when
considering that the Trust holds retirement plan and IRA assets
exclusively, assets that we believe should be invested without
taking undue risks.
The portfolio managers of the various Trust funds never
lose sight of the fact that, while there are stringent
guidelines that must be followed, there are also high standards
for each fund's investment performance. During the first
quarter of 1999, we took action on two funds that were not
meeting our expectations. On February 8, 1999, the Board of
Trustees removed Friess Associates, Inc., as a manager of the
Emerging Growth Equity Fund. Retirement System Investors Inc.
was appointed to manage a portion of the Fund's assets, with
the remainder of the assets given to the other Emerging Growth
Equity Fund manager, HLM Management Company, Inc. The portfolio
manager of the International Equity Fund was also changed by
the Board. Effective March 1, 1999, the Bank of Ireland Asset
Management (U.S.) Limited was named manager, replacing Morgan
Grenfell Investment Services Limited. We expect these changes
will have positive results on the investment performances of
both funds.
On behalf of the Board of Trustees, I would like to thank
our unitholders for choosing RSI Retirement Trust to help meet
your retirement savings goals.
Sincerely,
[SIG]
William Dannecker
President and Trustee
May 12, 1999
1
<PAGE>
INVESTMENT REVIEW
EQUITY FUNDS
The first quarter of fiscal year 1999 started in a most
depressing way. For the first eight days of October, all major
domestic equity indices were down, ranging from -4.2% for the
Russell 1000 Value Index to -18.5% for the Russell 2000 Growth
Index. For this period, the Standard & Poor's 500 Index ("S&P
500") declined 5.7%, the Russell 2000 Index (a blend of both
growth and value small cap stocks) dropped 14.7% and the NASDAQ
OTC Composite Index was down 16.2%. Non-U.S. stocks (as
measured by the MSCI EAFE Index -- EAFE) were down less
severely for this specific period at -2.2%. Subsequent to
October 8th, through the quarter ended December 31, 1998, all
the equity indices recovered dramatically. The most pronounced
turnarounds were reflected by the NASDAQ OTC Composite, up
54.5%, and the Russell 2000 Growth Index, up 51.6%, followed by
the Russell 1000 Growth Index, up 39.0%. In addition, the
Russell 2000 Index rose 36.3%, the S&P 500 was up 28.6% and the
Russell Value 1000 Index returned 21.7%. The turnaround was
likewise impressive for non-U.S. stocks, with EAFE up 23.4% for
this period.
Despite the initial shortfall, growth stocks (small, medium
and large cap issues) rebounded nicely and reflected strong
double digit returns for the quarter: the NASDAQ OTC Composite
Index rose 29.5%; the Russell 1000 Growth Index returned 26.7%;
and the Russell 2000 Growth Index was up 23.6%. In addition,
the S&P 500 finished the quarter very strong, at +21.3%,
followed by the Dow Jones Industrial Average (DJIA) at +17.5%,
the Russell 1000 Value Index at +16.6%, and the Russell 2000
Index at +16.3%. The Russell 2000 Value Index (small cap value
stocks), at +9.1%, was the laggard. EAFE, the proxy for
non-U.S. stocks, rebounded strongly with a return 20.7% for the
quarter. Foreign markets in general recovered strongly as
interest rates fell during the quarter. Japan, the third
largest equity market (after the U.S. and the United Kingdom)
returned 26.9% in U.S. dollar terms, which was primarily due to
the rise in value of the yen vis-a-vis the U.S. dollar and
other major currencies.
For the second three months of fiscal year 1999, the
markets started off strong, struggled in February, and then
picked up momentum in March. (After a very strong upward
movement in April, the equity markets, in general, have leveled
off so far in May.) However, investor sentiment is shifting to
embrace sectors and stocks previously left behind (e.g.,
cyclical and small cap stocks). For the most part, during this
period, large cap growth stocks continued to be in favor while
large cap value stocks lagged, along with small cap growth and
value stocks. The Russell 1000 Growth Index (representing large
cap growth stocks) rose 6.4% for the period, followed by the
S&P 500, at 5.0%, while the Russell 1000 Value Index
(representing large cap value stocks) was up moderately, at
1.4%. Small cap growth stocks (represented by the Russell 2000
Growth Index) declined 1.7%. Small cap value stocks, as
measured by the Russell 2000 Value Index, continued to
disappoint, at -9.7% for the recent quarter. Non-U.S. stocks
were down for most of the quarter before coming on strongly in
March, with EAFE up 4.2% for the month and 1.4% for the
quarter. In general, lack of growth in Europe and the Far East
has impacted the markets, but most markets did respond strongly
in March with solid gains in Japan
2
<PAGE>
(benefiting from overseas buying), the U.K. (bolstered by a
significant uptick in economic activity and consumer
confidence). In addition, the European markets, although mixed,
reflected positive results for the EEC countries.
Overall, the six months ended March 31, 1999, was a period
that reflected unique double digit returns, with the NASDAQ OTC
Composite Index up over 45%, followed by the Russell 1000
Growth Index at 34.8%, the S&P 500 at 27.3%, EAFE at 22.3%, and
the Russell 2000 Growth Index at 21.6%. For the fiscal half
year, large cap value stocks lagged growth stocks and small cap
value stocks were totally out-of-favor, with the Russell 2000
Value Index down 1.5%.
As noted at this time last year, the U.S. continues to
experience moderate to strong economic growth, low inflation
rates, favorable interest rates, strong corporate stock
repurchases, increased merger activity and cash inflow by
mutual fund investors. These factors continue to propel the
stock market, a condition that has persisted for the past four
plus years. Thus far in fiscal 1999, this trend has been even
more pronounced.
Economic growth (Gross Domestic Product, or "GDP") was
strong, growing at an annualized rate of 6.0% for the fourth
quarter 1998 (versus 3.7% for the fourth quarter, 1997). The
momentum, although not as strong as the fourth quarter,
continued into the first quarter of 1999, with GDP rising 4.5%,
annualized.
Although U.S. stock markets continued to advance in April,
there are some troubling concerns abroad: the conflict in
Kosovo and surrounding areas continues to increase with the
possible introduction of combat troops to defeat the Serb
forces; the picture in Russia becomes bleaker by the day;
China/U.S. relations continue to present some problems both
here and abroad, especially with the failure of China to gain
acceptance in the World Trade Organization for now; a generally
weakening European economy; the uncertainty as to whether Japan
has the ability to stimulate internal economic growth; some
issues persist with Iraq; and the peace process with Palestine
and Israel remains uncertain. How this will all play out is
difficult to assess at this time.
For the six months ended March 31, 1999 (as had been the
case for the six months ended March 31, 1998 and March 31,
1997), the Trust's large cap equity funds (Core and Value)
turned in very strong double digit results. The Emerging Growth
Equity Fund also rebounded significantly for the period, up
20.35% (versus being down 3.67% for the six months ended March
31, 1998); and the International Equity Fund, thanks to the
upper teens performance for the fourth quarter, 1998 (+16.86%),
finished the recent six month period up 16.95% (versus 2.37%
for the same period last year).
CORE EQUITY FUND
The Core Equity Fund posted a 26.92% return for the six months
ended March 31, 1999, compared to the 19.87% return of the
Lipper Growth and Income Funds Average, its performance
benchmark. For the one-year period ended March 31, 1999, the
Core Fund returned 15.36%, nearly ten percentage points higher
than the 5.47%
3
<PAGE>
return of its Lipper benchmark. With a 25.34% annual return for
the three years ended March 31, 1999, the Fund significantly
outperformed its benchmark's return of 19.49%. For the five-,
ten- and 15-year periods ended March 31, 1999, Core achieved
annualized returns that appreciably outperformed the benchmark
returns and achieved percentile rankings of the top 9% (26th
out of 321 funds), top 18% (26th out of 150 funds), and the top
10% (9th out of 90 funds), respectively, in the Lipper Growth &
Income Funds grouping for these three periods.
The Core Equity Fund's 15-year annualized return of 17.41%
was 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 14.48
versus 14.79 for the index over this period.
VALUE EQUITY FUND
The Value Equity Fund posted a 26.07% return for the fiscal
year-to-date, ended March 31, 1999, compared to the 19.87%
return of its performance benchmark, the Lipper Growth & Income
Funds Average. For the one-year period ended March 31, 1999,
the Value Equity returned 10.14%, outperforming the Lipper
benchmark return of 5.47% by an impressive margin. For the
three and five years ended March 31, 1999, the Fund achieved
annualized returns of 24.41% and 22.73%, respectively, and
ranked in the top 19% (93rd out of 499 growth and income funds)
and 20% of its Lipper benchmark grouping (62nd out of 321
funds).
Retirement System Investors Inc. commenced managing the
Value Equity Fund on April 1, 1995, or four years ended March
31, 1999. For this period, the Fund achieved an annualized
return of 25.62% and exceeded the Lipper Growth & Income Funds
Average by 386 basis points per year, and ranked in the top 19%
of its Lipper benchmark grouping (78th out of 413 funds). For
the longer time periods, this Fund underperformed versus its
Lipper benchmark.
EMERGING GROWTH EQUITY FUND
The Emerging Growth Equity Fund returned 20.35% for the six
months ended March 31, 1999, significantly outperforming its
benchmark, the Lipper Small Cap Funds Average, which returned
12.00%. For the trailing one- and three-year periods ended
March 31, 1999, the Fund underperformed its Lipper benchmark
with returns of -18.80% and 4.26%, annualized, versus -15.48%
and 8.03%, annualized. The Fund reflected an annualized return
of 13.86% for the five-year period ended March 31, 1999 and
outperformed its Lipper benchmark, which returned 12.11%,
annualized. For the 10 and 15 years ended March 31, 1999, the
Emerging Growth Equity Fund achieved annual returns of 14.32%
and 14.05%, respectively, and outperformed the Lipper benchmark
returns of 13.60%, annualized, and 12.86%, annualized, for
these two periods. For the 15-year period, the Fund ranked in
the top 28% of the Lipper Small Company Growth Funds grouping
(7th out of 25 funds).
It should be noted that the manager structure of the
Emerging Growth Equity Fund was changed, effective February 8,
1999, with the removal of Friess Associates,
4
<PAGE>
Inc. (Friess). Retirement System Investors Inc. was appointed
to manage $10 million of the Fund's assets, with the remainder
of the assets formerly managed by Friess given to the other
Fund manager, HLM Management Company, Inc.
INTERNATIONAL EQUITY FUND
The International Equity Fund's return for the six-month period
ended March 31, 1999 was 16.95%, while the Lipper International
Equity Funds Average, the Fund's performance benchmark,
returned 18.22%. For the one-year period ended March 31, 1999,
the Fund returned 1.61%, and outperformed its Lipper benchmark,
which returned 0.02%. However, for the three, five and ten
years ended March 31, 1999, the Fund trailed the Lipper
International Funds Average returns for each of these periods.
Since inception (14 years and 11 months ended March 31, 1999),
the Fund also underperformed versus its Lipper benchmark,
11.91%, annualized, versus 12.88%, annualized. [A manager
change was made, effective March 1, 1999, with the appointment
of the Bank of Ireland Asset Management (U.S.) Limited to
manage the Fund, replacing Morgan Grenfell Investment Services
Limited (MGIS). MGIS was a portfolio manager of the
International Equity Fund from inception, May 1, 1984, through
February 28, 1999.]
It is important to note that while the International Equity
Fund's annualized 10-year return of 6.71% trailed the Lipper
International Equity Fund Average, it 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 13.91 versus 17.08 for the
index over this time period.
FIXED-INCOME FUNDS
In the fourth quarter of 1998, inflation, as measured by the
Consumer Price Index (CPI, i.e., Urban Consumers seasonally
adjusted data, as reported by the U.S. Labor Department) was a
non-factor, up only 0.2% for the quarter. It was a period when
interest rates across the yield curve were rising. Volatility
was also present in the markets, and spreads that had
previously widened sharply between Treasuries and other bond
sectors (more than 50 to 100 basis points over normal levels)
showed some improvement, especially between better quality
mortgages, agencies, corporates and Treasuries.
Just prior to the start of fiscal year 1999, the Federal
Reserve, at its September 29th meeting, reduced the Fed Funds
rate to 5.25% from 5.50%. The Fed further cut the Funds rate to
5.00% in October and to 4.75% in November. The Fed similarly
lowered the discount rate to its current 4.50%. For the first
cut, the Federal Reserve cited the dampening effect of a global
slowdown on the U.S. economy, and for the additional cuts it
cited unsettling credit market conditions.
Positives in the fixed-income outlook during the period, in
addition to low inflation, included relatively high real
interest rates, lower commodity prices and low foreign yields,
which increased the attractiveness of U.S. bonds. 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, reflected a
5
<PAGE>
nominal return of 0.34% for the quarter. For the short- to
intermediate-term securities (represented by the Lehman
Brothers Government-Intermediate Bond Index), the total
quarterly return rose 0.25%; cash equivalent-type investments
(the 90-Day Treasury Bills) returned 1.06% for this period.
During the first quarter of 1999, interest rates backed up
strongly in February and then showed some improvement in March,
after being flat in December and January. The intermediate
sector of the curve, most responsive to perceived Federal
Reserve Monetary policy, increased about one percentage point
from its low of 4.20% in early October. Two-year Treasury notes
ended March at 4.98% versus 4.56% at December 31, 1998. The
five-year Treasury was 5.10% at March 31, 1999 versus a high of
5.22% at the end of February and 4.54% at year end 1998. The
ten-year Treasury peaked in February at 5.28%, lowering
modestly to 5.23% at March 31, but 57 basis points higher than
the 4.66% rate at December 31, 1998. The 30-year bond ended the
quarter at 5.62% versus 5.10% in December and 4.97% at the end
of September, 1998. Federal Reserve monetary policy has shifted
to a neutral stance from one of easing, and interest rates have
moved higher to a more normal relationship above the 4.75% Fed
Funds rate.
For the recent quarter, the CPI rose to 0.7%, but it
remains a non-issue. As a result of the interest rate movement
that prevailed during the first quarter of 1999, coupled with
modest results achieved during the last quarter of 1998, the
bond markets reflected lackluster results for the fiscal
half-year ending March 31, 1999. The Lehman Brothers Aggregate
Bond Index returned -0.17% (-0.51% for the recent quarter), and
the Lehman Brothers Government-Intermediate Bond Index was
about break-even at -0.02% (-0.27% for the latest quarter).
Cash equivalent-type securities (90-Day U.S. Treasury Bills)
returned 1.09% for the recent quarter and 2.16% for the six
months ended March 31, 1999.
INTERMEDIATE-TERM BOND FUND
For the six-month period ended March 31, 1999, the
Intermediate-Term Bond Fund returned 1.06%, compared to the
0.33% return of its benchmark, the Lipper Short-Intermediate
(one- to five-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,
1999, it returned 6.22% per year, compared to the 5.78% annual
return of its benchmark. For the 15 years ended March 31, 1999,
the Fund, at an annualized return of 8.85%, outperformed its
benchmark's return of 8.50%.
The Intermediate-Term Bond Fund continues to emphasize
quality of holdings, with over 87% in U.S. Government and other
AAA-rated securities. At March 31, 1999, the average maturity
and average duration of all portfolio holdings was 4.1 years
and 3.1 years, respectively, versus 5.0 years and 3.8 years,
respectively, at the start of fiscal year 1999.
6
<PAGE>
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, 1999. For the fiscal year-to-date, the Fund
returned 0.80% versus -1.62% for the Lipper benchmark. For the
one-year period ended March 31, 1999, the fund returned 7.49%,
compared to the 5.29% return of the benchmark. This placed the
fund in the top 2% (3rd out of 183 funds) of its Lipper
grouping. With an annualized return of 8.06% for the three
years ended March 31, 1999, the Fund ranked in the top 7% of
its Lipper grouping (9th out of 147 funds). For the five-year
period ended March 31, 1999, the Fund outpaced the benchmark
return of 6.57%, annualized, by 97 basis points per year, with
an annualized return of 7.54%. The Fund's annualized return was
9.64% for the 15 years ended March 31, 1999, while the Lipper
benchmark was 8.86% per year. For the period, the Fund was the
top performer (1st out of 7 funds) in its Lipper grouping.
The Fund continues to emphasize quality of holdings, with
more than 96% in U.S. Government and other AAA-rated
securities. At March 31, 1999, the average maturity and average
duration of portfolio holdings was 8.8 years and 6.1 years,
respectively, compared to 9.4 years and 6.5 years,
respectively, at the start of fiscal year 1999.
SHORT-TERM INVESTMENT FUND
For the six months ended March 31, 1999, the Short-Term
Investment Fund posted a return of 2.29%, versus the 2.20%
return of the Lipper Retail Money Funds Average (a
representative benchmark). The Fund achieved a 4.80% annual
return for the five-year period ended March 31, 1999,
comparable to the 4.85% return of the Lipper benchmark. For the
15 years ended March 31, 1999, the Fund produced an annual
return of 6.03%, exceeding the Lipper benchmark's annualized
return of 5.88%.
The Short-Term Investment Fund continues to emphasize
quality of holdings, with 98.7% in U.S. Government securities,
1.0% in A1/P1 or higher rated commercial paper and 0.3% in
A-rated issues. The average portfolio maturity was 179 days at
March 31, 1999, compared to 164 days as of September 30, 1998.
7
<PAGE>
EQUITY FUNDS
NET INVESTMENT PERFORMANCE1
FOR PERIODS ENDED MARCH 31, 1999
---------------------------------------------------------------
<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 26.92% 15.36% 25.34% 24.33% 17.37% 17.41%
VALUE EQUITY FUND 26.07 10.14 24.41 22.73 14.41 13.80
Lipper Growth &
Income Funds
Average2 19.87 5.47 19.49 19.53 14.92 14.88
EMERGING GROWTH
EQUITY FUND 20.35 (18.80) 4.26 13.86 14.32 14.05
Lipper Small
Company Growth
Funds Average2 12.00 (15.48) 8.03 12.11 13.60 12.86
INTERNATIONAL
EQUITY FUND3 16.95 1.61 6.83 7.74 6.71 11.91*
Lipper
International
Equity Funds
Average3 18.22 0.02 8.94 7.94 8.81 12.88*
</TABLE>
1. All performance results shown are net of management fees
and all related expenses, unless otherwise footnoted.
2. Lipper Analytical Services (a Reuters company) 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.
3. The International Equity Fund was started on May 1, 1984.
The inception date for all other funds was January 1, 1983,
or 16 1/4 years for the period ended March 31, 1999.
* Covers period since inception: May 1, 1984 - March 31,
1999, or 14 11/12 years.
---------------------------------------------------------------
8
<PAGE>
FIXED-INCOME FUNDS*
NET INVESTMENT PERFORMANCE1
FOR PERIODS ENDED MARCH 31, 1999
---------------------------------------------------------------
<TABLE>
<CAPTION>
Annualized
----------------------------------------------------
6 Months 1 Year 3 Years 5 Years 10 Years 15 Years
------------ ---------- ----------- ----------- ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
ACTIVELY MANAGED BOND
FUND 0.80% 7.49% 8.06% 7.54% 8.71% 9.64%
Lipper U.S.
Government Bond
Funds Average2 (1.62) 5.29 6.66 6.57 7.96 8.86
INTERMEDIATE-TERM
BOND FUND 1.06 5.77 6.36 6.22 7.64 8.85
Lipper Short-
Intermediate
(1 to 5 year
maturity) U.S.
Government Funds
Average2 0.33 5.33 5.92 5.78 7.38 8.50
SHORT-TERM INVESTMENT
FUND 2.29 4.92 4.88 4.80 5.05 6.03
Lipper Retail Money
Funds Average2 2.20 4.70 4.82 4.85 5.11 5.88
</TABLE>
* The inception date for all fixed-income funds was January
1, 1983, or 16 1/4 years for the period ended March 31,
1999.
1. All performance results shown are net of management fees
and all related expenses, unless otherwise footnoted.
2. Lipper Analytical Services (a Reuters company) 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.
---------------------------------------------------------------
9
<PAGE>
COMBINED FINANCIAL STATEMENTS
RSI RETIREMENT TRUST
Combined Statement of Assets and Liabilities March 31, 1999
(Unaudited)
---------------------------------------------------------------
<TABLE>
<S> <C> <C>
ASSETS:
Investments in securities at value (Cost
$484,275,602)--Note 2(A) $647,088,755
Cash 845,846
Receivable for investments sold 1,803,919
Receivable for units sold 498,428
Dividends and interest receivable 1,959,474
Collateral for securities loaned, at fair
value (Note 4) 6,589,084
Net gain on forward foreign currency
contracts 11,538
Other assets 85,246
------------
658,882,290
LIABILITIES:
Payable for fund investments purchased $3,285,515
Payable upon return of securities loaned
(Note 4) 6,589,084
Options written at value, (premiums
received $57,023) 68,437
Payable for units redeemed 127,113
Payable to investment managers 248,053
Accrued expenses 509,801 10,828,003
---------- ------------
NET ASSETS--See Note 5 $648,054,287
------------
------------
</TABLE>
Combined Statement of Operations Six Months Ended March 31,
1999 (Unaudited)
---------------------------------------------------------------
<TABLE>
<S> <C> <C>
INVESTMENT INCOME:
Income:
Interest $ 8,640,503
Dividends 2,136,670
-----------
Total Income $ 10,777,173
Expenses:
Investment manager's fees--Note 3(A) 1,529,806
Shareholder servicing fees and expenses
Note 3(B) 1,354,027
Custodian fees 147,261
Legal and auditing fees 82,797
Consultant fees 47,583
Trustees' fees and expenses--Note 3(C) 124,226
Printing and Postage 45,964
Pricing fees 42,013
Insurance 48,447
Other 107,155
-----------
Total Expenses 3,529,279
Less fees paid indirectly--Note 4 (15,000)
Less expense reimbursement--Note 3(A) (64,165)
Net Expenses 3,450,114
------------
INVESTMENT INCOME--NET 7,327,059
REALIZED AND UNREALIZED GAIN ON INVESTMENTS,
STOCK OPTIONS, AND FOREIGN CURRENCIES--Note
4:
Net realized gain (loss) on:
Investments 26,538,668
Options written 6,939
Foreign currency transactions (706,089)
-----------
25,839,518
-----------
Unrealized appreciation (depreciation) on:
Investments 48,710,688
Options written (11,414)
Foreign currency translations of other
assets 2,244
-----------
48,701,518
-----------
NET REALIZED AND UNREALIZED GAIN ON
INVESTMENTS, OPTIONS AND FOREIGN
CURRENCIES--Note 4: 74,541,036
------------
NET INCREASE IN NET ASSETS RESULTING FROM
OPERATIONS $ 81,868,095
------------
------------
</TABLE>
See Notes to Financial Statements
10
<PAGE>
RSI RETIREMENT TRUST (CONTINUED)
Combined Statement of Changes in Net Assets
---------------------------------------------------------------
<TABLE>
<CAPTION>
Six Months Year
Ended Ended
3/31/99 9/30/98
(Unaudited) (Audited)
------------- -------------
<S> <C> <C>
OPERATIONS:
Investment income--net $ 7,327,059 $ 15,336,152
Net realized gain 25,839,518 52,428,272
Net unrealized appreciation 48,701,518 (72,680,619)
------------- -------------
Net increase (decrease) in net assets resulting from operations 81,868,095 (4,916,195)
------------- -------------
CAPITAL TRANSACTIONS--Note 5:
Value of units sold 90,604,458 150,412,586
Value of units redeemed (108,542,999) (203,447,714)
------------- -------------
Net (decrease) in net assets resulting from capital
transactions (17,938,541) (53,035,128)
------------- -------------
Net increase (decrease) 63,929,554 (57,951,323)
NET ASSETS at beginning of year 584,124,733 642,076,056
------------- -------------
NET ASSETS at end of period $ 648,054,287 $ 584,124,733
------------- -------------
------------- -------------
</TABLE>
See Notes to Financial Statements
11
<PAGE>
FINANCIAL STATEMENTS OF INVESTMENT FUNDS
CORE EQUITY FUND
Statement of Investments
March 31, 1999 (Unaudited)
---------------------------------------------------------------
<TABLE>
<CAPTION>
Shares Value
- ----------- ------------
<C> <S> <C> <C>
COMMON STOCKS 99.7%
AEROSPACE AND DEFENSE 4.3%
151,000 AlliedSignal Inc. $ 7,427,312
34,600 Lockheed Martin Corp. 1,303,987
------------
8,731,299
------------
BANKING 8.3%
58,577 BankAmerica Corp. 4,137,001
65,576 Chase Manhattan Corp. 5,332,148
105,250 Citigroup Inc. 6,722,844
16,000 Washington Mutual Inc. 654,000
------------
16,845,993
------------
BUILDING PRODUCTS 3.7%
91,500 Armstrong World
Industries Inc. 4,134,656
22,000 Martin Marietta Materials
Inc. 1,255,375
39,000 Southdown, Inc. 2,093,813
------------
7,483,844
------------
CHEMICALS 2.3%
82,100 E.I. Du Pont De Nemours &
Company 4,766,931
------------
COMPUTER SYSTEMS 11.9%
113,800 EMC Corp.* 14,537,950
52,700 Hewlett-Packard Corp. 3,573,719
34,500 International Business
Machines Corp. 6,115,125
------------
24,226,794
------------
DRUG AND HEALTH CARE 10.5%
133,900 Johnson & Johnson 12,544,756
106,000 Merck & Company, Inc. 8,499,875
23,900 Twinlab Corp.* 221,075
------------
21,265,706
------------
ELECTRONICS & ELECTRICAL 11.4%
57,150 Cisco Systems, Inc.* 6,261,497
1,500 Dallas Semiconductor
Corp. 57,938
115,800 Emerson Electric Co. 6,130,162
90,400 Intel Corp. 10,746,300
------------
23,195,897
------------
<CAPTION>
Shares Value
- ----------- ------------
<C> <S> <C> <C>
<CAPTION>
ENERGY 11.5%
<C> <S> <C> <C>
50,153 B P Amoco PLC--Spons ADR $ 5,062,318
114,400 Halliburton Co. 4,404,400
144,600 Royal Dutch Petroleum Co. 7,519,200
113,800 Texaco Inc. 6,458,150
------------
23,444,068
------------
FINANCIAL SERVICES 5.0%
145,800 Fannie Mae 10,096,650
------------
HOUSEHOLD PRODUCTS 0.5%
10,500 Procter & Gamble Co. 1,028,344
------------
INSURANCE 5.6%
105,200 Allstate Corp. 3,898,975
61,721 American International
Group Inc. 7,445,096
------------
11,344,071
------------
MACHINERY & ENGINEERING 2.5%
99,900 Ingersoll-Rand Corp. 4,957,537
7,500 Milacron Inc. 118,125
------------
5,075,662
------------
MACHINERY/GENERAL 0.2%
14,000 Snap-On, Inc. 406,000
------------
METALS AND MINING 1.0%
9,600 Alcoa Inc. 395,400
30,900 Potash Corp.of
Saskatchewan 1,653,150
------------
2,048,550
------------
MULTI INDUSTRY 0.4%
17,100 Philip Morris Companies
Inc. 601,706
2,000 Time Warner Inc. 142,125
------------
743,831
------------
OFFICE AND BUSINESS
EQUIPMENT 4.7%
180,000 Xerox Corp. 9,607,500
------------
PHARMACEUTICALS 4.8%
70,800 Pfizer Inc. 9,823,500
------------
RETAIL 0.1%
2,600 Tiffany & Co. 194,350
------------
</TABLE>
See Notes to Financial Statements 12
<PAGE>
CORE EQUITY FUND (CONTINUED)
Statement of Investments
March 31, 1999 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Shares Value
- ----------- ------------
<C> <S> <C> <C>
SOFTWARE PRODUCTS 3.1%
44,000 BMC Software, Inc.* $ 1,630,750
25,500 Cadence Design Systems
Inc.* 656,625
60,375 Computer Associates
International, Inc. 2,147,086
59,600 Sterling Commerce, Inc.* 1,832,700
------------
6,267,161
------------
TELECOMMUNICATIONS 5.8%
38,700 GTE Corp. 2,341,350
87,682 Lucent Technologies, Inc. 9,447,736
------------
11,789,086
------------
TELECOMMUNICATIONS
EQUIPMENT 2.1%
700 Northern Telecom Ltd. 43,488
42,300 Tellabs Inc.* 4,134,825
------------
4,178,313
------------
Total Common Stocks (Cost $64,460,089) $202,563,550
------------
<CAPTION>
Principal
Amount
- -----------
<C> <S> <C> <C>
SHORT TERM INVESTMENTS
REPURCHASE AGREEMENT 0.3%
$ 712,323 Bear Stearns & Co. Inc.
Dated 3/31/1999 4.92%
Due 4/1/1999
Collateralized by
$1,457,000 United
States Treasury Strips
Due 11/15/2015 (Value
$537,720), $750,000
United States Treasury
Strips Due 2/15/2022,
(Value $190,080) $ 712,323
------------
Total Investments (Cost $65,172,413) 100.0% $203,275,873
------------
</TABLE>
<TABLE>
<CAPTION>
Expiration Date
# of /
Contracts Strike Price Value
- --------- --------------- ------------
<C> <S> <C> <C> <C>
WRITTEN COVERED CALL OPTIONS
Emerson Electric Co. April 1999 /
2 100 $ (61,750)
2 Fannie Mae June 1999 / 75 (3,750)
Intel Corp. April 1999 /
1 130 (1,500)
Intel Corp. April 1999 /
1 140 (437)
Lucent Technologies, Inc April 1999 /
1 120 (1,000)
------------
Total Written Call Options (Premiums Received $57,023) $ (68,437)
------------
Other Assets, Less Liabilities 0.0% 43,077
--- ------------
Net Assets 100.0% $203,250,513
--- ------------
--- ------------
</TABLE>
*Denotes non-income producing security.
See Notes to Financial Statements 13
<PAGE>
CORE EQUITY FUND (CONTINUED)
Statement of Assets and Liabilities March 31, 1999 (Unaudited)
---------------------------------------------------------------
<TABLE>
<S> <C> <C>
ASSETS:
Investments in securities at value (Cost
$65,172,413)--Note 2(A) $203,275,873
Receivable for units sold 113,163
Dividends and interest receivable 154,784
Collateral for securities loaned, at fair
value (Note 4) 24,352
Other assets 7,699
------------
203,575,871
LIABILITIES:
Payable upon return of securities loaned
(Note 4) $ 24,352
Options written at value, (premiums
received 57,023) 68,437
Payable for units redeemed 50,207
Payable to investment managers 89,035
Accrued expenses 93,327 325,358
-------- ------------
NET ASSETS at value, applicable to 2,016,494
outstanding units of
beneficial interest--Note 5 $203,250,513
------------
------------
NET ASSET VALUE offering and redemption price
per unit
($203,250,513 divided by 2,016,494 units) $ 100.79
------------
------------
</TABLE>
Statement of Operations Six Months Ended March 31, 1999
(Unaudited)
---------------------------------------------------------------
<TABLE>
<S> <C> <C>
INVESTMENT INCOME:
Income:
Dividends $ 1,284,869
Interest 86,341
-----------
Total Income $ 1,371,210
Expenses:
Investment manager's fees--Note 3(A) 519,869
Shareholder servicing fees and
expenses--Note 3(B) 348,791
Custodian fees 17,288
Legal and auditing fees 12,752
Consultant fees 6,793
Trustees' fees and expenses--Note 3(C) 15,665
Printing and Postage 6,577
Pricing fees 2,319
Insurance 18,944
Other 10,274
Net Expenses 959,272
------------
INVESTMENT INCOME--NET 411,938
REALIZED AND UNREALIZED GAIN--Note 4:
Net realized gain on:
Investments 12,282,583
Options written 33,876
-----------
12,316,459
-----------
Unrealized appreciation (depreciation) on:
Investments 33,481,616
Options written (11,414)
-----------
33,470,202
-----------
NET REALIZED AND UNREALIZED GAIN ON
INVESTMENTS 45,786,661
------------
NET INCREASE IN NET ASSETS RESULTING FROM
OPERATIONS $ 46,198,599
------------
------------
</TABLE>
See Notes to Financial Statements
14
<PAGE>
CORE EQUITY FUND (CONTINUED)
Statement of Changes in Net Assets
---------------------------------------------------------------
<TABLE>
<CAPTION>
Six Months
Ended Year Ended
3/31/99 9/30/98
(Unaudited) (Audited)
------------ ------------
<S> <C> <C>
OPERATIONS:
Investment income--net $ 411,938 $ 1,423,816
Net realized gain 12,316,459 39,334,232
Net unrealized appreciation (depreciation) 33,470,202 (31,400,154)
------------ ------------
Net increase in net assets resulting from operations 46,198,599 9,357,894
------------ ------------
CAPITAL TRANSACTIONS--Note 5:
Value of units sold 11,949,566 22,854,166
Value of units redeemed (31,264,611) (68,118,523)
------------ ------------
Net (decrease) in net assets resulting from capital transactions (19,315,045) (45,264,357)
------------ ------------
Net increase (decrease) 26,883,554 (35,906,463)
NET ASSETS at beginning of year 176,366,959 212,273,422
------------ ------------
NET ASSETS at end of period $203,250,513 $176,366,959
------------ ------------
------------ ------------
</TABLE>
See Notes to Financial Statements
15
<PAGE>
VALUE EQUITY FUND
Statement of Investments
March 31, 1999 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Shares Value
- ----------- ------------
<C> <S> <C> <C>
COMMON AND PREFERRED STOCKS 99.1%
AEROSPACE AND DEFENSE 1.1%
21,100 Lockheed Martin Corp. $ 795,206
------------
AUTOMOBILES 3.2%
12,199 DaimlerChrysler AG* 1,046,827
23,700 Ford Motor Co. 1,344,975
------------
2,391,802
------------
BANKING 13.4%
18,000 Banc One Corp. 991,125
27,694 BankAmerica Corp. 1,955,889
34,500 Chase Manhattan Corp. 2,805,281
23,700 Citigroup Inc. 1,513,838
8,700 Fleet Financial Group
Inc. 327,338
5,500 Mellon Bank Corp. 387,063
4,600 Royal Bank of Canada 217,063
32,400 Washington Mutual Inc. 1,324,350
13,600 Wells Fargo Co. 476,850
------------
9,998,797
------------
BUILDING PRODUCTS 4.5%
19,200 Martin Marietta Materials
Inc. 1,095,600
42,196 Southdown, Inc. 2,265,398
------------
3,360,998
------------
CHEMICALS 0.2%
2,500 E.I. Du Pont De Nemours &
Co. 145,156
------------
COMPUTER SYSTEMS 4.3%
9,000 International Business
Machines Corp. 1,595,250
12,700 Sun Microsystems Inc.* 1,587,500
------------
3,182,750
------------
DRUG AND HEALTH CARE 5.0%
1,000 Amgen Inc.* 74,875
49,400 Beverly Enterprises Inc.* 253,175
34,900 Bristol-Myers Squibb Co. 2,244,506
9,400 HCR Manor Care Inc.* 214,438
3,800 McKesson HBOC Inc. 250,800
36,300 Tenet Healthcare Corp.* 687,431
------------
3,725,225
------------
ELECTRONICS & ELECTRICAL 2.9%
15,000 Altera Corp.* 891,562
11,400 Dallas Semiconductor
Corp. 440,325
7,000 Intel Corp. 832,125
------------
2,164,012
------------
ENERGY 7.0%
15,143 BP Amoco PLC--Spons ADR 1,528,497
8,100 Diamond Offshore Drilling
Inc. 256,163
5,800 Exxon Corp. 409,262
<CAPTION>
Shares Value
- ----------- ------------
<C> <S> <C> <C>
20,500 Halliburton Co. $ 789,250
4,700 Mobil Corp. 413,600
18,200 Texaco Inc. 1,032,850
26,900 Transocean Offshore Inc. 775,056
------------
5,204,678
------------
FINANCIAL SERVICES 3.3%
4,400 Associates First Capital
Corp. 198,000
16,400 Fannie Mae 1,135,700
11,100 Morgan Stanley Dean
Witter & Co. 1,109,306
------------
2,443,006
------------
FOREST PRODUCTS AND PAPER 1.2%
28,400 Mead Corp. 873,300
------------
INSURANCE 4.5%
31,800 Allstate Corp. 1,178,587
15,635 American International
Group Inc. 1,885,972
5,200 Hartford Life Inc.--Class
A 286,000
------------
3,350,559
------------
MACHINERY AND ENGINEERING 1.1%
4,200 Honeywell Inc. 318,413
12,600 Milacron Inc. 198,450
24,300 Thermo Electron Corp.* 329,569
------------
846,432
------------
MACHINERY / GENERAL 1.0%
12,100 Maytag Corp. 730,537
------------
MERCHANDISING 1.4%
35,550 Hasbro Inc. 1,028,728
------------
METALS AND MINING 1.3%
19,700 Alcoa Inc. 811,394
3,800 Nucor Corp. 167,438
------------
978,832
------------
MULTI INDUSTRY 1.1%
23,400 Philip Morris Companies
Inc. 823,387
------------
OFFICE AND BUSINESS
EQUIPMENT 4.0%
27,000 Lexmark International
Group Inc.--Class A* 3,017,250
------------
OIL AND GAS 2.5%
20,700 Burlington Resources Inc. 826,706
31,400 Enron Oil & Gas Co. 522,025
45,400 Union Pacific Resources
Group Inc. 539,125
------------
1,887,856
------------
REIT 2.4%
136,000 HRPT Properties Trust 1,836,000
------------
</TABLE>
See Notes to Financial Statements 16
<PAGE>
VALUE EQUITY FUND (CONTINUED)
Statement of Investments
March 31, 1999 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Shares Value
- ----------- ------------
RETAIL 2.8%
<C> <S> <C> <C>
36,500 Kmart Corp. $ 613,656
20,900 Kmart Financing
Convertible Preferred 1,264,450
3,000 Tiffany & Co. 224,250
------------
2,102,356
------------
SOFTWARE PRODUCTS 5.7%
19,200 BMC Software, Inc.* 711,600
53,800 Cadence Design Systems
Inc.* 1,385,350
3,000 Computer Associates
International, Inc. 106,688
56,800 The Learning Co. Inc.* 1,647,200
12,200 Sterling Commerce, Inc.* 375,150
------------
4,225,988
------------
TELECOMMUNICATIONS 7.7%
29,700 AT&T Corp. 2,370,431
13,900 Bell Atlantic Corp. 718,456
28,300 GTE Corp. 1,712,150
20,200 SBC Communications Inc. 951,925
------------
5,752,962
------------
TELECOMMUNICATIONS
EQUIPMENT 6.9%
51,300 ADC Telecommunications
Inc.* 2,446,369
33,800 Northern Telecom Ltd. 2,099,825
6,300 Tellabs Inc.* 615,825
------------
5,162,019
------------
TRANSPORTATION 2.7%
13,000 FDX Corp.* 1,206,562
<CAPTION>
Shares Value
- ----------- ------------
<C> <S> <C> <C>
50,250 Werner Enterprises Inc. $ 791,437
------------
1,997,999
------------
UTILITIES 7.9%
12,400 Avista Corp. 201,500
10,000 Avista Corp. Convertible
Preferred 171,250
21,800 Duke Energy Corp. 1,190,825
23,400 MediaOne Group Inc.* 1,485,900
36,400 Peoples Energy Corp. 1,176,175
9,600 Texas Utilities Co. 400,200
21,100 Texas Utilities Co.
Convertible Preferred 1,124,894
6,000 United States Filter
Corp.* 183,750
------------
5,934,494
------------
Total Common and Preferred Stocks (Cost
$62,685,697) $ 73,960,329
------------
<CAPTION>
Principal
Amount
- -----------
<C> <S> <C> <C>
SHORT TERM INVESTMENTS
REPURCHASE AGREEMENT 0.6%
$ 430,290 Bear Stearns & Co. Inc.
Dated 3/31/1999 4.92%
Due 4/1/99
Collateralized by
$975,000 United States
Treasury Strips Due
11/15/2012 (Value
$439,364) $ 430,290
------------
</TABLE>
<TABLE>
<C> <S> <C> <C> <C>
Total Investments (Cost $63,115,987) 99.7% $ 74,390,619
------------
Other Assets, Less Liabilities 0.3% 210,567
----- ------------
Net Assets 100.0% $ 74,601,186
----- ------------
----- ------------
</TABLE>
*Denotes non-income producing security.
See Notes to Financial Statements 17
<PAGE>
VALUE EQUITY FUND (CONTINUED)
Statement of Assets and Liabilities March 31, 1999 (Unaudited)
---------------------------------------------------------------
<TABLE>
<S> <C> <C>
ASSETS:
Investments in securities at value (Cost
$63,115,987)--Note 2(A) $74,390,619
Receivable for investments sold 114,952
Receivable for units sold 71,064
Dividends and interest receivable 94,629
Collateral for securities loaned, at fair value (Note
4) 12,401
Other assets 12,899
-----------
74,696,564
LIABILITIES:
Payable upon return of securities loaned (Note 4) $ 12,401
Payable for units redeemed 1,370
Payable to investment managers 22,972
Accrued expenses 58,635 95,378
---------- -----------
NET ASSETS at value, applicable to 1,051,683 outstanding
units of
beneficial interest--Note 5 $74,601,186
-----------
-----------
NET ASSET VALUE offering and redemption price per unit
($74,601,186 divided by 1,051,683 units) $ 70.94
-----------
-----------
</TABLE>
Statement of Operations Six Months Ended March 31, 1999
(Unaudited)
---------------------------------------------------------------
<TABLE>
<S> <C> <C>
INVESTMENT INCOME:
Income:
Dividends $ 697,410
Interest 46,541
----------
Total Income $ 743,951
Expenses:
Investment manager's fees--Note 3(A) 136,628
Shareholder servicing fees and expenses--Note 3(B) 181,338
Custodian fees 14,598
Legal and auditing fees 11,591
Consultant fees 6,799
Trustees' fees and expenses--Note 3(C) 15,664
Printing and Postage 6,568
Pricing fees 3,710
Insurance 4,874
Other 9,983
----------
Total Expenses 391,753
----------
Net Expenses 391,753
----------
INVESTMENT INCOME--NET 352,198
REALIZED AND UNREALIZED GAIN (LOSS)--NOTE 4:
Net realized gain (loss) on:
Investments 4,238,908
Options written (26,937)
----------
4,211,971
----------
Unrealized appreciation on:
Investments 11,682,793
----------
11,682,793
----------
NET REALIZED AND UNREALIZED GAIN ON INVESTMENTS 15,894,764
----------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $16,246,962
----------
----------
</TABLE>
See Notes to Financial Statements
18
<PAGE>
VALUE EQUITY FUND (CONTINUED)
Statement of Changes in Net Assets
---------------------------------------------------------------
<TABLE>
<CAPTION>
Six Months Year
Ended Ended
3/31/99 9/30/98
(Unaudited) (Audited)
----------- ------------
<S> <C> <C>
OPERATIONS:
Investment income--net $ 352,198 $ 626,383
Net realized gain 4,211,971 11,453,123
Net unrealized appreciation (depreciation) 11,682,793 (14,028,220)
----------- ------------
Net increase (decrease) in net assets resulting
from operations 16,246,962 (1,948,714)
----------- ------------
CAPITAL TRANSACTIONS--Note 5:
Value of units sold 5,779,915 20,642,979
Value of units redeemed (11,356,355) (15,152,673)
----------- ------------
Net increase (decrease) in net assets resulting
from capital transactions (5,576,440) 5,490,306
----------- ------------
Net increase 10,670,522 3,541,592
NET ASSETS at beginning of year 63,930,664 60,389,072
----------- ------------
NET ASSETS at end of period $74,601,186 $ 63,930,664
----------- ------------
----------- ------------
</TABLE>
See Notes to Financial Statements
19
<PAGE>
EMERGING GROWTH EQUITY FUND
Statement of Investments
March 31, 1999 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Shares Value
- ---------- -----------
<C> <S> <C> <C>
COMMON STOCKS 97.2%
AEROSPACE & DEFENSE 1.3%
19,400 HEICO Corp. $ 465,600
12,200 Mercury Computer Systems,
Inc.* 218,075
2,200 Moog Inc.--CL A* 67,100
-----------
750,775
-----------
BROADCASTING & PUBLISHING 6.4%
42,900 Citadel Communications
Corp.* 1,426,425
42,600 Metro Networks, Inc.* 2,329,687
-----------
3,756,112
-----------
BUILDING & CONSTRUCTION 0.4%
1,200 Toll Brothers, Inc.* 21,750
18,250 White Cap Industries,
Inc.* 191,625
-----------
213,375
-----------
BUSINESS SERVICES 6.9%
3,700 Administaff, Inc.* 48,100
1,500 Concentric Network Corp. 112,313
2,800 Corporate Executive Board
Co.* 73,150
8,000 Critical Path, Inc.* 616,000
10,500 Diamond Tech Partners
Inc.* 240,844
5,700 ECsoft Group plc--Spons
ADR* 179,550
700 Exodus Communications,
Inc.* 93,713
2,800 Forrester Research, Inc.* 83,825
1,000 Hyperion Solutions Corp.* 14,500
3,500 Modem Media Poppe Tyson,
Inc.* 150,062
3,500 Network Solutions,
Inc.--CL A* 370,125
2,600 Pomeroy Computer
Resources, Inc. 33,475
38,100 Provant, Inc.* 695,325
6,000 Safeguard Scientifics,
Inc.* 406,875
5,100 Technology Solutions Co.* 36,337
22,000 Tier Technologies,
Inc.--CL B* 189,750
52,400 Towne Services, Inc.* 514,175
4,200 Verio Inc.* 193,200
-----------
4,051,319
-----------
CONSUMER GOODS &
COMMERCIAL SERVICES 7.8%
21,300 AHL Services, Inc.* 431,325
47,300 F.Y.I. Inc.* 1,501,775
9,900 Fossil, Inc.* 295,144
14,200 Global Imaging Systems,
Inc.* 184,600
2,900 P.F. Chang's China
Bistro, Inc.* 687,000
43,000 Quanta Services, Inc.* 1,093,812
3,000 SportsLine USA, Inc.* 136,875
13,300 THQ Inc.* 270,988
-----------
4,601,519
-----------
<CAPTION>
Shares Value
- ---------- -----------
<C> <S> <C> <C>
EDUCATION SERVICES 3.7%
33,300 Advantage Learning
Systems Inc.* $ 1,028,138
51,500 Bright Horizons Family
Solutions* 1,120,125
-----------
2,148,263
-----------
ELECTRONICS & ELECTRICAL 21.0%
27,500 Act Manufacturing Inc.* 443,437
23,500 Advanced Digital
Information Corp.* 389,219
38,800 Applied Micro Circuits
Corp.* 1,653,850
52,000 Applied Science &
Technology, Inc.* 663,000
34,900 Aware, Inc/Mass* 1,644,663
2,750 Dallas Semiconductor
Corp. 106,219
500 Exar Corp.* 8,062
25,300 The Kroll-O'Gara Co.* 676,775
7,700 Level One Communications,
Inc.* 374,412
21,500 MMC Networks, Inc.* 344,000
52,700 Power Integrations, Inc.* 1,666,637
18,700 Powerwave Technologies,
Inc.* 528,275
16,100 RF Micro Devices, Inc.* 1,537,550
75,100 Rayovac Corp. 2,069,944
13,050 Triquint Semiconductor,
Inc.* 241,425
-----------
12,347,468
-----------
FINANCIAL SERVICES 5.4%
64,100 The Profit Recovery Group
International* 2,523,937
8,300 TeleBanc Financial Corp.* 664,000
-----------
3,187,937
-----------
FOOD & SERVICES 1.5%
68,400 Gardenburger, Inc.* 675,450
18,000 Merkert American Corp.* 195,750
-----------
871,200
-----------
MEDICAL SERVICES AND
DRUGS 14.1%
6,600 Barr Laboratories, Inc.* 201,300
22,80 Chattem, Inc. 712,500
12,900 Closure Medical Corp.* 486,975
23,400 Colorado MEDtech, Inc.* 260,325
20,800 Dura Pharmaceuticals,
Inc.* 292,500
41,400 GelTex Pharmaceuticals,
Inc.* 577,012
49,000 Kendle International
Inc.* 983,062
3,400 Ligand Pharmaceuticals,
Inc.-CLB* 27,838
16,700 Perclose, Inc.* 519,788
33,600 QuadraMed Corp.* 256,200
57,350 Res-Care, Inc.* 1,290,375
28,000 Sunrise Assisted Living,
Inc.* 1,272,250
500 Twinlab Corp.* 4,625
</TABLE>
See Notes to Financial Statements 20
<PAGE>
EMERGING GROWTH EQUITY FUND (CONTINUED)
Statement of Investments
March 31, 1999 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Shares Value
- ---------- -----------
34,750 Xomed Surgical Products,
Inc.* $ 1,359,594
<C> <S> <C> <C>
-----------
8,244,344
-----------
COMPUTER SERVICES
SOFTWARE 24.9%
65,600 Ardent Software, Inc.* 1,049,600
18,700 AXENT Technologies, Inc.* 451,138
6,000 Bottomline Technologies,
Inc.* 382,500
31,800 Caere Corp.* 331,912
91,900 Computer Network
Technology Corp.* 1,476,144
29,400 Concord Communications
Inc.* 1,644,563
32,900 Digital River, Inc.* 1,313,943
31,200 Emulex Corp.* 1,023,750
27,500 Engineering Animation,
Inc.* 1,148,125
87,500 FVC.COM, Inc.* 1,110,156
4,800 NetGravity, Inc.* 197,700
1,000 Open Market, Inc.* 12,938
8,800 Pervasive Software Inc.* 158,400
27,800 Qlogic Corp.* 1,864,337
4,000 RWD Technologies Inc.* 69,500
6,050 Sanchez Computer
Associates, Inc.* 134,613
20,300 Security First
Technologies Corp.* 1,471,750
55,100 Smith-Gardner &
Associates, Inc.* 792,063
-----------
14,633,132
-----------
TELECOMMUNICATIONS 1.5%
9,000 CellStar Corp.* 93,375
17,000 CommScope, Inc.* 355,938
<CAPTION>
Shares Value
- ---------- -----------
<C> <S> <C> <C>
42,100 Tel-Save.Com Inc.* $ 434,156
-----------
883,469
-----------
TRANSPORTATION 2.3%
8,000 Frontier Airlines, Inc.* 79,000
65,850 Knight Transportation
Inc.* 1,259,381
-----------
1,338,381
-----------
Total Common Stocks (Cost
$51,311,125) $57,027,294
-----------
<CAPTION>
Principal
Amount
- ----------
<C> <S> <C> <C>
SHORT-TERM INVESTMENTS
REPURCHASE AGREEMENT 4.0%
$2,372,440 Bear Stearns & Co. Inc.
Dated 3/31/1999 4.92%
Due 4/1/1999
Collateralized by
$3,245,000 United
States Treasury Strips
Due 2/15/2022 (Value
$822,413) and
$6,305,000 United
States Treasury Strips
Due 2/15/2022 (Value
$1,597,939) $ 2,372,440
-----------
Total Investments (Cost
$53,683,565) 101.2% $59,399,734
Liabilities, Net of other assets (1.2%) (746,855)
----- -----------
Net Assets 100.0% $58,652,879
----- -----------
----- -----------
</TABLE>
*Denotes non-income producing security.
See Notes to Financial Statements 21
<PAGE>
EMERGING GROWTH EQUITY FUND (CONTINUED)
Statement of Assets and Liabilities March 31, 1999 (Unaudited)
---------------------------------------------------------------
<TABLE>
<S> <C> <C>
ASSETS:
Investments in securities at value (Cost
$53,683,565)--Note 2(A) $59,399,734
Receivable for investments sold 274,808
Receivable for units sold 49,672
Dividends and interest receivable 15,559
Collateral for securities loaned, at fair value (Note
4) 274,866
Other assets 8,020
-----------
60,022,659
LIABILITIES:
Payable for investments purchased $ 972,646
Payable upon return of securities loaned (Note 4) 274,866
Payable for units redeemed 3,200
Payable to investment managers 44,211
Accrued expenses 74,857 1,369,780
---------- -----------
NET ASSETS at value, applicable to 887,800 outstanding
units of beneficial interest--Note 5 $58,652,879
-----------
-----------
NET ASSET VALUE offering and redemption price per unit
($58,652,879 divided by 887,800 units) $ 66.07
-----------
-----------
</TABLE>
Statement of Operations Six Months Ended March 31, 1999
(Unaudited)
---------------------------------------------------------------
<TABLE>
<S> <C> <C>
INVESTMENT INCOME:
Income:
Interest $ 120,387
Dividends 7,886
----------
Total Income $ 128,273
Expenses:
Investment manager's fees--Note 3(A) 346,395
Shareholder servicing fees and expenses--Note 3(B) 170,159
Custodian fees and expenses 33,366
Legal and auditing fees 12,236
Consultant fees 6,798
Trustees' fees and expenses--Note 3(C) 30,237
Printing and Postage 6,565
Pricing fees 4,794
Insurance 5,997
Other 10,705
----------
Total Expenses 627,252
----------
Less fees paid indirectly--Note 4 (10,000)
----------
Net Expenses 617,252
----------
INVESTMENT (LOSS)--NET (488,979)
REALIZED AND UNREALIZED GAIN ON INVESTMENTS--Note 4:
Net realized gain on investments 5,344,822
Unrealized appreciation on investments 6,111,080
----------
NET REALIZED AND UNREALIZED GAIN ON INVESTMENTS, 11,455,902
----------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $10,966,923
----------
----------
</TABLE>
See Notes to Financial Statements
22
<PAGE>
EMERGING GROWTH EQUITY FUND (CONTINUED)
Combined Statement of Changes in Net Assets
---------------------------------------------------------------
<TABLE>
<CAPTION>
Six Months Year
Ended Ended
3/31/99 9/30/98
(Unaudited) (Audited)
------------ ------------
<S> <C> <C>
OPERATIONS:
Investment (loss)--net $ (488,979) $ (936,455)
Net realized gain (loss) 5,344,822 (4,262,493)
Net unrealized appreciation (depreciation) 6,111,080 (25,625,265)
------------ ------------
Net increase (decrease) in net assets resulting from operations 10,966,923 (30,824,213)
------------ ------------
CAPITAL TRANSACTIONS--Note 5:
Value of units sold 3,968,374 11,606,019
Value of units redeemed (11,568,927) (17,083,955)
------------ ------------
Net (decrease) in net assets resulting from capital transactions (7,600,553) (5,477,936)
------------ ------------
Net increase (decrease) 3,366,370 (36,302,149)
NET ASSETS at beginning of year 55,286,509 91,588,658
------------ ------------
NET ASSETS at end of period $ 58,652,879 $ 55,286,509
------------ ------------
------------ ------------
</TABLE>
See Notes to Financial Statements
23
<PAGE>
INTERNATIONAL EQUITY FUND
Statement of Investments
March 31, 1999 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Shares Value
- --------- -----------
<C> <S> <C> <C>
COMMON AND PREFERRED STOCKS 96.4%
AUTO PARTS & SUPPLIES 0.7%
5,275 Michelin "B" $ 236,619
-----------
AUTOMOBILES 2.0%
484 Bayerische Motoren Werke AG 317,168
8,000 Honda Motor Co. Ltd. 361,360
-----------
678,528
-----------
BANKING 13.9%
14,400 ABN Amro Holdings 300,037
19,950 Banco Santander Sa 409,216
25,822 Barclays Plc 742,400
6,020 Bayerische Hypo--Und Vereinsbank 360,049
38,000 Development Bank of Singapore 287,997
53,700 Lloyds Tsb Group Plc 812,266
33,700 National Australia Bank Ltd. 609,714
14,650 National Westminster Bank Plc 337,715
2,039 UBS AG 640,568
38,550 Westpac Banking Corp. 279,959
-----------
4,779,921
-----------
BROADCASTING & PUBLISHING 2.6%
9,480 Elsevier 141,235
80,350 News Corp. Ltd. 592,247
15,000 Singapore Press Holdings 165,751
-----------
899,233
-----------
CHEMICALS 1.5%
11,615 Hoechst Ag 503,455
-----------
COMMERCIAL SERVICES 0.0%
275 Brambles Industries Ltd. 6,961
-----------
CONSUMER GOODS & SERVICES 5.1%
8,000 Fuji Photo Film Co. 302,597
17,000 Kao Corporation 375,334
13,000 Shiseido Co. Ltd. 180,005
3,710 Vivendi 912,796
-----------
1,770,732
-----------
ELECTRONICS & ELECTRICAL 7.4%
3,160 Alcatel 363,323
30,000 Canon Inc. 742,140
8,000 Murata Mfg. Co. 425,527
2,000 Rohm Co. Ltd. 238,937
8,500 Sony Corp. 785,832
-----------
2,555,759
-----------
ENERGY 5.0%
28,350 ENI Spa 180,576
7,000 Royal Dutch Petroleum 372,186
75,300 Shell Transport & Trading 506,588
<CAPTION>
Shares Value
- --------- -----------
<C> <S> <C> <C>
5,250 Total SA 'B' $ 646,697
-----------
1,706,047
-----------
FINANCIAL SERVICES 3.4%
21,266 Ing Groep Nv 1,172,026
-----------
FOOD & SERVICES 8.0%
12,740 Ahold 488,263
50,050 Diageo Plc 562,338
26,600 Cadbury Schweppes Plc 386,034
30,700 Kingfisher Plc 387,056
412 Nestle SA 748,484
43,050 Safeway Plc 168,353
-----------
2,740,528
-----------
HEALTH 11.1%
26,770 Glaxo Wellcome Plc 895,843
457 Novartis Ag 741,316
59 Roche Holding Ag 719,489
20,000 Takeda Chemical Inds 775,067
14,340 Zeneca Group Plc 677,805
-----------
3,809,520
-----------
INSURANCE 8.4%
46,100 Allied Zurich Plc 621,401
5,220 AXA-UAP 692,029
56,490 Prudential Corp. Plc 736,374
374 Schw Rueckver 827,518
-----------
2,877,322
-----------
LEISURE 2.8%
34,500 Granada Group 698,952
54,150 Ladbroke Group Plc 247,601
-----------
946,553
-----------
MACHINERY & ENGINEERING 5.1%
78,450 Btr Siebe Plc 346,049
11,030 Mannesmann Ag 1,408,692
-----------
1,754,741
-----------
MULTI-INDUSTRY 2.3%
45,450 British American Tobacco Plc 378,589
7,880 Veba Ag 414,296
-----------
792,885
-----------
TELECOMMUNICATIONS 13.5%
42,800 Cable & Wireless Plc 534,772
2,565 Ericsson LM-B 62,386
9,700 Koninklijke Kpn 385,891
13 NTT Mobile Communication Network
Inc. 642,090
1,820 Tele Danmark A/S 180,294
</TABLE>
See Notes to Financial Statements 24
<PAGE>
INTERNATIONAL EQUITY FUND (CONTINUED)
Statement of Investments
March 31, 1999 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Shares Value
- --------- -----------
<C> <S> <C> <C>
12,300 Telecom Corp Of New Zealand $ 59,823
96,000 Telecom Italia 1,019,816
7,305 Telefonica SA 309,855
63,600 Telstra Corp. Ltd. 331,548
60,753 Vodafone Group Plc 1,128,827
-----------
4,655,302
-----------
METALS FABRICATOR 0.9%
292 Alusuisse Lonza Group 321,168
-----------
TRANSPORTATION 0.7%
11,152 Railtrack Group Plc 255,997
-----------
<CAPTION>
Shares Value
- --------- -----------
<C> <S> <C> <C>
UTILITIES 2.0%
8,000 Electricidade De Portugal $ 157,878
6,628 National Power Plc 51,037
8,725 Tnt Post Group 262,800
385 Viag Ag 212,350
-----------
684,065
-----------
Total Investments (Cost $30,545,467) 96.4% 33,147,362
Other Assets, Less Liabilities 3.6% 1,243,472
------ -----------
100.0% $34,390,834
------ -----------
------ -----------
</TABLE>
*Denotes non-income producing security.
Geographical Diversification March 31, 1999 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Percent of
Net Assets
-------------
Country Total
- ------------------------- -------------
<S> <C>
United Kingdom 30.5%
Japan 14.0
Switzerland 11.6
Germany 9.4
Netherlands 9.0
France 8.3
Australia 5.3
Italy 3.5
Spain 2.1
Singapore 1.3
Denmark 0.5
Portugal 0.5
Sweden 0.2
New Zealand 0.2
---
Total Investments 96.4%
Other Assets Less
Liabilities 3.6%
---
Total 100.0%
---
---
</TABLE>
See Notes to Financial Statements 25
<PAGE>
INTERNATIONAL EQUITY FUND (CONTINUED)
Statement of Assets and Liabilities March 31, 1999 (Unaudited)
---------------------------------------------------------------
<TABLE>
<S> <C> <C>
ASSETS:
Investments in securities at value (Cost
$30,545,467)--Note 2(A) $33,147,362
Cash 1,282,652
Receivable for investments sold 365,565
Net gain on forward foreign currency contracts 11,538
Receivable for units sold 14,178
Dividends and interest receivable 103,453
Collateral for securities loaned, at fair value
(Note 4) 602,075
Other assets 10,344
-----------
35,537,167
LIABILITIES:
Payable for investments purchased $439,650
Payable upon return of securities loaned (Note
4) 602,075
Payable for units redeemed 4
Payable to investment managers 17,378
Accrued expenses 87,226 1,146,333
-------- -----------
NET ASSETS at value, applicable to 647,165
outstanding units of
beneficial interest--Note 5 $34,390,834
-----------
-----------
NET ASSET VALUE offering and redemption price per
unit
($34,390,834 divided by 647,165 units) $ 53.14
-----------
-----------
</TABLE>
See Notes to Financial Statements
26
<PAGE>
INTERNATIONAL EQUITY FUND (CONTINUED)
Statement of Operations Six Months Ended March 31, 1999
(Unaudited)
---------------------------------------------------------------
<TABLE>
<S> <C> <C>
INVESTMENT INCOME:
Income:
Interest $ 10,743
Dividends 146,505
----------
Total Income $ 157,248
Expenses:
Investment manager's fees--Note 3(A) 108,837
Shareholder servicing fees and expenses--Note
3(B) 103,163
Custodian fees and expenses 58,226
Legal and auditing fees 12,237
Consultant fees 6,800
Trustees' fees and expenses--Note 3(C) 15,665
Printing and Postage 6,557
Pricing fees 13,210
Insurance 2,628
Other 46,221
----------
Total Expenses 373,544
Less fees paid indirectly--Note 4 (5,000)
----------
Net Expenses 368,544
-----------
INVESTMENT (LOSS)--NET (211,296)
REALIZED AND UNREALIZED GAIN (LOSS)--Note 4:
Net realized gain (loss) on:
Investments 4,418,297
Foreign currency transactions (706,089)
----------
3,712,208
----------
Unrealized appreciation on:
Investments 2,152,671
Foreign currency translations of other assets
and liabilities 2,244
----------
2,154,915
----------
NET REALIZED AND UNREALIZED GAIN ON INVESTMENTS
AND FOREIGN CURRENCIES 5,867,123
-----------
NET INCREASE IN NET ASSETS RESULTING FROM
OPERATIONS $ 5,655,827
-----------
-----------
</TABLE>
Statement of Changes in Net Assets
---------------------------------------------------------------
<TABLE>
<CAPTION>
Six Months
Ended Year Ended
3/31/99 9/30/98
(Unaudited) (Audited)
----------- -----------
<S> <C> <C>
OPERATIONS:
Investment (loss)--net $ (211,296) $ (100,696)
Net realized gain 3,712,208 1,791,647
Net unrealized appreciation (depreciation) 2,154,915 (5,778,005)
----------- -----------
Net increase (decrease) in net assets resulting from
operations 5,655,827 (4,087,054)
----------- -----------
CAPITAL TRANSACTIONS--Note 5:
Value of units sold 1,443,852 9,648,430
Value of units redeemed (6,791,461) (6,755,055)
----------- -----------
Net increase (decrease) in net assets resulting from
capital transactions (5,347,609) 2,893,375
----------- -----------
Net increase (decrease) 308,218 (1,193,679)
NET ASSETS at beginning of year 34,082,616 35,276,295
----------- -----------
NET ASSETS at end of period $34,390,834 $34,082,616
----------- -----------
----------- -----------
</TABLE>
See Notes to Financial Statements
27
<PAGE>
ACTIVELY MANAGED BOND FUND
Statement of Investments
March 31, 1999 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Principal
Amount Value
- ----------- ------------
<C> <S> <C> <C>
CORPORATE BONDS 3.3%
$ 1,000,000 CNA Financial Corp.
6.75% Due 11/15/2006 $ 992,673
1,000,000 TSY-Linked Call Strips
0.000% Due 11/15/2024 140,781
590,000 Deutsche Bank Financial
Medium Term Note
0.000% Due 7/18/2017 162,110
657,000 Merrill Lynch
Medium Term Note
0.000% Due 2/25/2027 71,711
1,000,000 PMI Group Inc Note
6.75% Due 11/15/2006 1,029,342
2,000,000 J.C. Penney Co. DEB
8.25% Due 08/15/2022 2,131,100
320,000 Public Service Electric and Gas
6.375% Due 05/01/2008 320,046
3,000,000 Transamerica Financial Corp.
0.000% Due 09/01/2012 1,252,896
------------
Total Corporate Bonds (Cost $5,975,601) $ 6,100,659
------------
MORTGAGES 12.2%
$ 1,899,862 ABN Amro Mortgage Corp
Remic 98-5 A11
9.17165% Due 1/25/2029 $ 1,950,920
997,893 Chase Mortgage Finance
Remic 98-S2 A12
7.00% Due 7/25/2028 902,764
1,948,673 Chase Mortgage Finance
Remic 94-G A13
7.00% Due 4/25/2025 1,929,284
1,000,000 First Bank System Mortgage Corp.
Remic 93-C A10
7.25% Due 7/25/2024 1,009,040
1,000,000 First Union Residential Trust
Remic 98-B 1A8
6.75% Due 08/25/2028 990,010
1,012,427 General Electric Capital Mortgage Services
Remic 98-12 2A8
6.75% Due 06/25/2028 862,430
4,304,289 General Electric Capital Mortgage Services
Remic 97-7 A9
7.50% Due 08/25/2027 4,357,934
4,900,000 PNC Mortgage Securities
Remic 98-4 3A2
6.75% Due 05/25/2028 4,876,578
<CAPTION>
Principal
Amount Value
- ----------- ------------
<C> <S> <C> <C>
MORTGAGES (Continued)
$ 1,001,810 Prudential Home Mortgage Securities
Remic 94-21 A8
7.80% Due 06/25/2024 $ 1,014,845
1,116,688 Residential Funding Mortgage Securities
Remic 93-S47 A15
9.00% Due 12/25/2023 949,140
2,000,000 Residential Funding Mortgage Securities I
Remic 98-S13 A14
6.75% Due 06/25/2028 1,949,920
2,000,000 Residential Accredit Loans, Inc.
Remic 97-QS8 A9
7.375% Due 08/25/2027 2,029,082
------------
Total Mortgages (Cost $23,028,502) $ 22,821,947
------------
UNITED STATES GOVERNMENT AND AGENCY
OBLIGATIONS 83.8%
$ 48,653 Collateralized Mortgage Security Corp.
Remic X1
7.00% Due 6/1/2006 $ 48,490
8,000,000 Federal Home Loan Bank
0.00% Due 06/25/2012 2,873,128
10,000,000 Federal Home Loan Bank
0.00% Due 06/26/2017 2,503,620
10,000,000 Federal Home Loan Bank
0.00% Due 07/02/2012 3,604,340
15,000,000 Federal Home Loan Bank
0.00% Due 07/14/2017 3,708,420
28,000,000 Federal Home Loan Bank
0.00% Due 07/25/2017 7,307,356
5,000,000 Federal Home Loan Bank
0.00% Due 07/28/2017 1,200,300
3,000,000 Federal Home Loan Bank
0.00% Due 07/07/2017 748,029
1,400,000 Federal Home Loan Bank
6.76% Due 01/29/2014 1,378,434
2,620,000 Federal Home Loan Bank
6.55% Due 03/20/2009 2,598,891
1,000,000 Federal Home Loan Bank
6.30% Due 05/26/2008 983,600
15,000,000 Federal Home Loan Mortgage Corp.
0.00% Due 02/02/2023 2,599,560
2,000,000 Federal Home Loan Mortgage Corp.
6.50% Due 03/05/2009 1,990,468
1,500,000 Federal Home Loan Mortgage Corp.
6.58% Due 12/02/2013 1,467,455
</TABLE>
See Notes to Financial Statements 28
<PAGE>
ACTIVELY MANAGED BOND FUND (CONTINUED)
Statement of Investments
March 31, 1999 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Principal
Amount Value
- ----------- ------------
UNITED STATES GOVERNMENT AND AGENCY
OBLIGATIONS (Continued)
<C> <S> <C> <C>
$ 2,000,000 Federal Home Loan Mortgage Corp.
7.00% Due 03/19/2014 $ 2,002,084
2,000,000 Federal Home Loan Mortgage Corp.
7.01% Due 03/12/2014 2,002,710
1,135,943 Federal Home Loan Mortgage Corp.
Remic 1574V
6.50% Due 03/15/2023 1,123,063
1,956,724 Federal Home Loan Mortgage Corp.
Remic 1574U
6.50% Due 09/15/2023 1,961,460
2,482,800 Federal Home Loan Mortgage Corp.
Remic 1591SH
6.29074% Due 09/15/2022 2,244,915
519,802 Federal Home Loan Mortgage Corp.
Remic 15PZ
7.00% Due 07/25/2023 490,668
750,060 Federal Home Loan Mortgage Corp.
Remic 1290H
7.50% Due 06/15/2021 773,717
4,023,026 Federal Home Loan Mortgage Corp.
Remic 1527OZ
7.50% Due 05/15/2023 4,054,217
478,493 Federal Home Loan Mortgage Corp.
Pool #141001
7.75% Due 9/1/2016 493,819
324,103 Federal Home Loan Mortgage Corp.
Pool #533624
8.50% Due 12/01/2007 338,652
115,394 Federal Home Loan Mortgage Corp.
Pool #297625
8.50% Due 6/1/2017 121,238
5,000,000 Federal Home Loan Mortgage Corp.
Remic 2092DL
8.50% Due 9/15/2027 5,392,545
1,019,560 Federal Home Loan Mortgage Corp.
Remic 2101ZA
6.00% Due 11/15/2028 1,021,526
1,840,444 Federal Home Loan Mortgage Corp.
Remic 2123KE
8.50% Due 2/15/2027 1,995,980
326,054 Federal Home Loan Mortgage Corp.
Remic 1560N
7.00% Due 11/15/2022 323,241
<CAPTION>
Principal
Amount Value
- ----------- ------------
<C> <S> <C> <C>
UNITED STATES GOVERNMENT AND AGENCY
OBLIGATIONS (Continued)
$ 353,577 Federal Home Loan Mortgage Corp.
Remic 1583OB
7.00% Due 06/15/2023 $ 346,833
1,324,619 Federal Home Loan Mortgage Corp.
Remic 1671Z
7.00% Due 02/15/2024 1,303,156
1,799,220 Federal Home Loan Mortgage Corp.
Remic 1663-ZA
7.00% Due 01/15/2024 1,768,885
2,959,958 Federal Home Loan Mortgage Corp.
Remic 29ZC
8.00% Due 04/25/2024 2,994,084
690,000 Federal Home Loan Mortgage Corp.
Remic 1790C-E
8.00% Due 11/15/2023 706,000
676,000 Federal Home Loan Mortgage Corp.
Remic 1814D
6.50% Due 02/15/2026 665,517
136,110 Federal Home Loan Mortgage Corp.
Remic 2018ZA
6.50% Due 01/15/2028 135,866
925,000 Federal Home Loan Mortgage Corp.
Remic 2036B
7.00% Due 03/15/2028 909,297
925,000 Federal Home Loan Mortgage Corp.
Remic 2064U
7.00% Due 06/15/2028 887,062
3,088,527 Federal Home Loan Mortgage Corp.
Remic 2089 ZB
7.00% Due 08/15/2026 3,051,366
5,000,000 Federal National Mortgage Association
Medium Term Note
0.00% Due 07/13/2017 1,187,385
200,000 Federal National Mortgage Association
Medium Term Note
6.69% Due 02/02/2011 199,225
150,000 Federal National Mortgage Association
Medium Term Note
6.77% Due 9/09/2013 147,412
1,300,000 Federal National Mortgage Association
Medium Term Note
6.29% Due 01/22/2008 1,286,000
1,855,000 Federal National Mortgage Association
Medium Term Note
6.36% Due 07/16/2008 1,835,600
</TABLE>
See Notes to Financial Statements 29
<PAGE>
ACTIVELY MANAGED BOND FUND (CONTINUED)
Statement of Investments
March 31, 1999 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Principal
Amount Value
- ----------- ------------
UNITED STATES GOVERNMENT AND AGENCY
OBLIGATIONS (Continued)
<C> <S> <C> <C>
$ 41,142 Federal National Mortgage Association
Remic 1991-169M
8.40% Due 12/25/2021 $ 45,076
420,000 Federal National Mortgage Association
Remic 1992-161H
7.50% Due 9/25/2022 437,217
2,945,332 Federal National Mortgage Association
Remic 93-199Z
7.00% Due 10/25/2023 2,914,713
2,145,951 Federal National Mortgage Association
Remic 93-247Z
7.00% Due 03/25/2023 2,149,103
4,772,948 Federal National Mortgage Association
Remic 1994-36UA
7.00% Due 08/25/2023 4,772,179
685,000 Federal National Mortgage Association
Remic 1994-65LL
7.375% Due 04/25/2024 705,679
2,739,000 Federal National Mortgage Association
Remic 1994-61E
7.50% Due 04/25/2024 2,839,357
6,865,695 Federal National Mortgage Association
Remic G97-5ZB
7.05% Due 03/25/2024 6,739,552
442,168 Federal National Mortgage Association
Remic 1997-49B
10.00% Due 06/17/2027 478,615
900,000 Federal National Mortgage Association
Remic 1997-34YL
7.00% Due 06/18/2027 904,695
7,863 Federal National Mortgage Association
Remic 1997-34C
7.00% Due 06/18/2027 7,860
1,361,920 Federal National Mortgage Association
Remic 1998-45ZB
7.00% Due 8/18/2028 1,285,278
5,931,815 Federal National Mortgage Association
Remic 1998-62DC
9.00% Due 11/25/2028 6,585,175
2,450,060 Federal National Mortgage Association
Pool #050965
6.50% Due 1/1/2024 2,443,078
885,660 Federal National Mortgage Association
Pool #50966
7.00% Due 1/1/2024 899,379
<CAPTION>
Principal
Amount Value
- ----------- ------------
<C> <S> <C> <C>
UNITED STATES GOVERNMENT AND AGENCY
OBLIGATIONS (Continued)
$ 716,906 Federal National Mortgage Association
Pool#239024
7.00% Due 10/1/2023 $ 728,011
372,649 Federal National Mortgage Association
Pool #87277
7.50% Due 4/1/2018 383,907
4,863,933 Federal National Mortgage Association
Remic 93-255E
7.10% Due 12/25/2023 4,939,032
621,752 Federal National Mortgage Association
Remic 93-250DZ
7.00% Due 12/25/2023 625,368
385,000 Federal National Mortgage Association
Remic G96-1PK
7.50% Due 06/17/2026 407,022
3,820,119 Federal National Mortgage Association
Remic 1993-247C
7.00% Due 03/25/2023 3,840,614
4,169,520 Federal National Mortgage Association
Remic 1994-69 Class CA
7.25% Due 03/25/2023 4,204,957
17,748 Government National Mortgage Association
Backed Trust
Remic 1A
0.00% Due 5/20/2017 15,945
19,384 Government National Mortgage Association
Pool #1350
6.50% Due 3/15/2002 19,568
20,857 Government National Mortgage Association
Pool #011192
7.25% Due 4/15/2006 21,543
580,599 Government National Mortgage Association
Pool #377003
8.00% Due 8/15/2024 604,653
490,894 Government National Mortgage Association
Pool #364979
8.00% Due 04/15/2024 511,232
852 Government National Mortgage Association
Pool #010855
8.00% Due 07/15/2006 895
327,878 Government National Mortgage Association
Pool #152027
8.00% Due 10/20/2016 342,672
</TABLE>
See Notes to Financial Statements 30
<PAGE>
ACTIVELY MANAGED BOND FUND (CONTINUED)
Statement of Investments
March 31, 1999 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Principal
Amount Value
- ----------- ------------
UNITED STATES GOVERNMENT AND AGENCY
OBLIGATIONS (Continued)
<C> <S> <C> <C>
$ 865,085 Government National Mortgage Association
Pool #377341
8.00% Due 11/15/2024 $ 900,925
202,013 Government National Mortgage Association
Pool #000675
8.00% Due 12/20/2016 211,128
1,219 Government National Mortgage Association
Pool #002919
8.00% Due 2/15/2004 1,274
36,623 Government National Mortgage Association
Pool #000710
8.00% Due 2/20/2017 38,300
104,574 Government National Mortgage Association
Pool #193256
8.00% Due 3/15/2017 110,263
9,346 Government National Mortgage Association
Pool #209105
8.00% Due 3/20/2017 9,773
124,196 Government National Mortgage Association
Pool #213606
8.00% Due 4/15/2017 130,952
86,894 Government National Mortgage Association
Pool #202887
8.00% Due 4/15/2017 91,621
8,096 Government National Mortgage Association
Pool #216159
8.00% Due 4/15/2017 8,536
4,486 Government National Mortgage Association
Pool #290013
8.00% Due 4/15/2020 4,707
46,809 Government National Mortgage Association
Pool #291195
8.00% Due 5/15/2020 49,111
217,581 Government National Mortgage Association
Pool #218150
8.00% Due 6/15/2017 229,417
52,863 Government National Mortgage Association
Pool #290123
8.00% Due 6/15/2020 55,463
31,810 Government National Mortgage Association
Pool #05214
8.00% Due 7/15/2005 33,336
5,621 Government National Mortgage Association
Pool #247493
8.00% Due 7/15/2018 5,918
<CAPTION>
Principal
Amount Value
- ----------- ------------
<C> <S> <C> <C>
UNITED STATES GOVERNMENT AND AGENCY
OBLIGATIONS (Continued)
$ 414,935 Government National Mortgage Association
Pool #385850
8.00% Due 8/15/2024 $ 432,126
573,942 Government National Mortgage Association
Pool #373826
8.00% Due 9/15/2023 598,955
247,619 Government National Mortgage Association
Pool #196754
8.50% Due 2/15/2017 263,801
62,955 Government National Mortgage Association
Pool #205624
8.50% Due 3/15/2017 67,069
141,641 Government National Mortgage Association
Pool #169957
8.50% Due 7/15/2016 150,913
8,417 Government National Mortgage Association
Pool #025811
9.00% Due 1/15/2009 9,086
284,215 Government National Mortgage Association
Pool #226673
9.50% Due 07/15/2017 306,943
176,802 Government National Mortgage Association
Pool #010260
8.00% Due 06/15/2006 185,787
179,884 Government National Mortgage Association
Pool #346560
8.00% Due 04/15/2023 187,723
3,885 Government National Mortgage Association
Pool #026113
9.00% Due 08/15/2008 4,194
11,597 Government National Mortgage Association
Pool #035238
9.50% Due 09/15/2009 12,542
9,853 Government National Mortgage Association
Pool #157799
9.00% Due 07/15/2016 10,625
13,699 Government National Mortgage Association
Pool #158361
9.50% Due 06/15/2016 14,803
1,239 Government National Mortgage Association
Pool #179930
9.50% Due 12/15/2016 1,339
3,543 Government National Mortgage Association
Pool #173806
9.00% Due 10/15/2016 3,821
</TABLE>
See Notes to Financial Statements 31
<PAGE>
ACTIVELY MANAGED BOND FUND (CONTINUED)
Statement of Investments
March 31, 1999 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Principal
Amount Value
- ----------- ------------
UNITED STATES GOVERNMENT AND AGENCY
OBLIGATIONS (Continued)
<C> <S> <C> <C>
$ 4,506 Government National Mortgage Association
Pool #176069
9.00% Due 08/15/2016 $ 4,859
23,933 Government National Mortgage Association
Pool #177254
9.00% Due 09/15/2016 25,808
31,387 Government National Mortgage Association
Pool #211434
9.50% Due 04/15/2017 33,897
22,915 Government National Mortgage Association
Pool #199032
9.50% Due 01/15/2017 24,747
5,175 Government National Mortgage Association
Pool #237572
9.50% Due 12/15/2017 5,589
5,033 Government National Mortgage Association
Pool #226855
9.50% Due 07/15/2017 5,436
19,223 Government National Mortgage Association
Pool #226651
9.50% Due 06/15/2018 20,755
1,668 Government National Mortgage Association
Pool #262208
9.50% Due 08/15/2018 1,801
92,508 Government National Mortgage Association
Pool #319342
8.50% Due 03/15/2022 98,114
<CAPTION>
Principal
Amount Value
- ----------- ------------
<C> <S> <C> <C>
UNITED STATES GOVERNMENT AND AGENCY
OBLIGATIONS (Continued)
$ 1,000,000 Government National Mortgage Association
Remic 97-18J
7.00% Due 11/20/2027 $ 1,007,854
1,000,000 Government National Mortgage Association
Remic 98-1A
7.00% Due 01/20/2028 972,297
1,477,000 Government National Mortgage Association
Remic 99-C
7.00% Due 02/16/2029 1,467,769
460,000 Government National Mortgage Association
Remic 1997-8PE
7.50% Due 05/16/2027 478,449
6,020,000 United States Treasury Bonds
9.25% Due 2/15/2016 8,183,438
6,800,000 United States Treasury Zero Coupon Strips
0.00% Due 2/15/2006 4,695,189
19,180,000 United States Treasury Zero Coupon Strips
0.00% Due 2/15/2010 10,353,538
------------
Total United States Government and Agency Obligations
(Cost $151,380,349) $156,137,982
------------
Total Investments (Cost $180,384,451) 99.3% $185,060,587
Other Assets, Less Liabilities 0.7% 1,371,439
------ ------------
Net Assets 100.0% $186,432,026
------ ------------
------ ------------
</TABLE>
See Notes to Financial Statements 32
<PAGE>
ACTIVELY MANAGED BOND FUND
Statement of Assets and Liabilities March 31, 1999 (Unaudited)
---------------------------------------------------------------
<TABLE>
<S> <C> <C>
ASSETS:
Investments in securities at value (Cost
$180,384,451)--Note 2(A) $185,060,587
Cash (568,942)
Receivable for investments sold 1,048,594
Receivable for units sold 54,077
Interest receivable 993,072
Collateral for securities loaned, at fair value (Note
4) 4,189,080
Other assets 14,026
------------
190,790,494
LIABILITIES:
Payable for investments purchased $ 9,016
Payable upon return of securities loaned (Note 4) 4,189,080
Payable for units redeemed 16,843
Payable to investment managers 48,476
Accrued expenses 95,053 4,358,468
-------- ------------
NET ASSETS at value, applicable to 4,901,952
outstanding units of beneficial interest--Note 5 $186,432,026
------------
------------
NET ASSET VALUE offering and redemption price per unit
($186,432,026 divided by 4,901,952 units) $ 38.03
------------
------------
</TABLE>
Statement of Operations Six Months Ended March 31, 1999
(Unaudited)
---------------------------------------------------------------
<TABLE>
<S> <C> <C>
INVESTMENT INCOME:
Income:
Interest $5,737,957
--------
Total Income $ 5,737,957
Expenses:
Investment manager's fees--Note 3(A) 270,732
Shareholder servicing fees and expenses--Note 3(B) 314,447
Custodian fees and expenses 12,377
Legal and auditing fees 12,368
Consultant fees 6,798
Trustees' fees and expenses--Note 3(C) 15,665
Printing and Postage 6,565
Pricing fees 8,531
Insurance 10,090
Other 9,984
--------
Net Expenses 667,557
------------
INVESTMENT INCOME--NET 5,070,400
REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS--Note 4:
Net realized gain on investments 239,856
Unrealized (depreciation) on investments (3,785,634)
--------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS (3,545,778)
------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 1,524,622
------------
------------
</TABLE>
See Notes to Financial Statements
33
<PAGE>
ACTIVELY MANAGED BOND FUND (CONTINUED)
Statement of Changes in Net Assets (Unaudited)
---------------------------------------------------------------
<TABLE>
<CAPTION>
Six Months
Ended Year Ended
3/31/99 9/30/98
(Unaudited) (Audited)
------------ ------------
<S> <C> <C>
OPERATIONS:
Invesment income--net $ 5,070,400 $ 9,298,989
Net realized gain 239,856 3,247,694
Net unrealized appreciation (depreciation) (3,785,634) 3,846,747
------------ ------------
Net increase in net assets resulting from operations 1,524,622 16,393,430
CAPITAL TRANSACTIONS--Note 5:
Value of units sold 37,148,139 26,734,278
Value of units redeemed (14,595,784) (27,911,465)
------------ ------------
Net increase/(decrease) in net assets resulting from capital
transactions 22,552,355 (1,177,187)
------------ ------------
Net increase 24,076,977 15,216,243
NET ASSETS at beginning of year 162,355,049 147,138,806
------------ ------------
NET ASSETS at end of period $186,432,026 $162,355,049
------------ ------------
------------ ------------
</TABLE>
See Notes to Financial Statements
34
<PAGE>
INTERMEDIATE-TERM BOND FUND
Statement of Investments
March 31, 1999 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Principal
Amount Value
- ----------- -----------
<C> <S> <C> <C>
CORPORATE BONDS 1.3%
$ 755,000 Old Republic International Corp.
7.00% Due 06/15/2007 $ 795,390
-----------
Total Corporate Bonds (Cost $799,904)
MORTGAGES 5.9%
$ 160,219 Collateralized Mortgage Obligation Trust
Remic 27A
7.25% Due 04/23/2017 $ 162,709
136 Citicorp
Mortgage Remic 1997-1A2
7.25% Due 02/25/2027 135
476,725 Citicorp
Mortgage Remic 1997-3A4
9.00% Due 08/25/2027 485,664
300,000 General Electric Capital Management Service
Remic 1996-3A4
7.00% Due 03/25/2026 303,196
1,055,799 General Electric Capital Management Service
Remic 1998-2 A12
7.00% Due 01/25/2028 1,064,518
500,000 General Electric Capital Management Service
Remic 1997-9 2A5
7.00% Due 10/25/2027 504,374
330,000 General Electric Capital Management Service
Remic 1996-HE3 A4
7.485% Due 09/25/2026 340,996
332,934 Prudential Home Mortgage Securities
Remic 1992-50 A5
7.625% Due 02/25/2023 336,478
7,971 John J. Matterer
8.50% Due 01/01/2005 7,970
456,000 Capstead Securities Corp. IV
CMO 93-1E
7.50% Due 02/01/2023 464,224
-----------
Total Mortgages (Cost $3,660,554) 3,670,264
-----------
UNITED STATES GOVERNMENT AND AGENCY
OBLIGATIONS 81.2%
$ 560,0000 Federal Home Loan Bank Note
5.125% Due 09/15/2003 $ 550,558
1,000,000 Federal Home Loan Bank Note
6.75% Due 03/18/2009 994,970
1,000,000 Federal Home Loan Bank Structured Note
6.30% Due 05/26/2008 983,600
1,200,000 Federal Home Loan Mortgage Corp.
Structured Note
5.50% Due 02/10/2009 1,172,233
<CAPTION>
Principal
Amount Value
- ----------- -----------
<C> <S> <C> <C>
UNITED STATES GOVERNMENT AND AGENCY
OBLIGATIONS (Continued)
$ 1,000,000 Federal Home Loan Mortgage Corp. Note
6.54% Due 08/26/2008 $ 991,543
1,500,000 Federal Home Loan Mortgage Corp. Note
6.91% Due 06/20/2005 1,520,757
1,000,000 Federal Home Loan Mortgage Corp. Note
6.41% Due 01/20/2009 987,763
4,439 Federal Home Loan Mortgage Corp.
Pool #200030
9.00% Due 03/01/2001 4,583
15,979 Federal Home Loan Mortgage Corp.
Pool #200034
8.50% Due 05/01/2001 16,475
7,451 Federal Home Loan Mortgage Corp.
Pool #200035
9.00% Due 05/01/2001 7,693
28,620 Federal Home Loan Mortgage Corp.
Pool #200040
9.00% Due 06/01/2001 29,549
30,572 Federal Home Loan Mortgage Corp.
Pool #200070
7.50% Due 04/01/2002 31,144
49,035 Federal Home Loan Mortgage Corp.
Pool #200071
7.50% Due 05/01/2002 49,953
29,525 Federal Home Loan Mortgage Corp.
Pool #212242
7.50% Due 07/01/2001 30,011
5,674 Federal Home Loan Mortgage Corp.
Pool #212719
7.50% Due 08/01/2001 5,767
47,383 Federal Home Loan Mortgage Corp.
Pool #213857
7.50% Due 11/01/2001 48,162
16,946 Federal Home Loan Mortgage Corp.
Pool #214040
7.50% Due 12/01/2001 17,225
84,276 Federal Home Loan Mortgage Corp.
Pool #290143
8.50% Due 08/01/2006 87,296
21,962 Federal Home Loan Mortgage Corp.
Pool #320139
8.00% Due 09/01/2001 22,388
328,883 Federal Home Loan Mortgage Corp.
Remic 1316Z
8.00% Due 06/15/2022 345,965
</TABLE>
See Notes to Financial Statements 35
<PAGE>
INTERMEDIATE-TERM BOND FUND (CONTINUED)
Statement of Investments
March 31, 1999 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Principal
Amount Value
- ----------- -----------
UNITED STATES GOVERNMENT AND AGENCY
OBLIGATIONS (Continued)
<C> <S> <C> <C>
$ 25,292 Federal Home Loan Mortgage Corp.
Remic 1468-O
7.00% Due 10/15/2022 $ 25,356
621,374 Federal Home Loan Mortgage Corp.
Remic 1552M
6.50% Due 07/15/2022 621,752
30,162 Federal Home Loan Mortgage Corp.
Remic 157A
8.75% Due 07/15/2000 30,869
922,019 Federal Home Loan Mortgage Corp.
Remic 1587Z
6.50% Due 10/15/2008 927,924
225,000 Federal Home Loan Mortgage Corp.
Remic 1663C
7.00% Due 01/15/2024 226,282
418,740 Federal Home Loan Mortgage Corp.
Remic 1681K
7.00% Due 08/15/2023 419,842
140,000 Federal Home Loan Mortgage Corp.
Remic 1692K
7.20% Due 09/15/2023 137,345
317,000 Federal Home Loan Mortgage Corp.
Remic 1695EA
7.00% Due 12/15/2023 326,020
264,082 Federal Home Loan Mortgage Corp.
Remic 32E
7.50.% Due 03/25/2005 263,177
410,447 Federal Home Loan Mortgage Corp.
Remic 1706LB
7.00% Due 06/15/2023 414,512
97,968 Federal Home Loan Mortgage Corp.
Remic 1754B
8.50% Due 02/15/2022 98,264
85,000 Federal Home Loan Mortgage Corp.
Remic 1753D
8.50% Due 09/15/2024 90,706
500,000 Federal Home Loan Mortgage Corp.
Remic 1770PH
8.00% Due 08/15/2023 515,373
200,000 Federal Home Loan Mortgage Corp.
Remic 1900N
7.50% Due 11/15/2024 205,125
1,440,000 Federal Home Loan Mortgage Corp.
Remic 1932B
7.00% Due 06/15/2025 1,465,001
<CAPTION>
Principal
Amount Value
- ----------- -----------
<C> <S> <C> <C>
UNITED STATES GOVERNMENT AND AGENCY
OBLIGATIONS (Continued)
$ 1,235,448 Federal Home Loan Mortgage Corp.
Remic 2046PZ
6.50% Due 02/15/2028 $ 1,241,286
510,811 Federal Home Loan Mortgage Corp.
Remic 2062Z
6.50% Due 06/15/2028 511,056
1,500,000 Federal Home Loan Mortgage Corp.
Remic 2092DL
8.50% Due 09/15/2027 1,617,764
59,832 Federal National Mortgage Association
Remic 93-244A
0.00% Due 11/25/2023 57,816
500,000 Federal National Mortgage Association
Medium Term Note
7.65% Due 10/06/2006 507,171
400,000 Federal National Mortgage Association
Medium Term Note
7.43% Due 06/13/2007 409,008
320,000 Federal National Mortgage Association
Medium Term Note
6.50% Due 03/19/2008 319,225
1,895,000 Federal National Mortgage Association
Medium Term Note
6.48% Due 04/02/2008 1,888,635
385,000 Federal National Mortgage Association
Medium Term Note
6.87% Due 10/02/2007 387,340
450,000 Federal National Mortgage Association
Medium Term Note
6.90% Due 08/21/2007 458,994
500,000 Federal National Mortgage Association
Medium Term Note
6.61% Due 04/10/2008 499,072
1,500,000 Federal National Mortgage Association
Medium Term Note
6.44% Due 01/07/2008 1,501,683
86,002 Federal National Mortgage Association
Pool #355656
7.00% Due 08/01/2003 88,031
207,027 Federal National Mortgage Association
Pool #87277
7.50% Due 04/01/2018 213,282
52,143 Federal National Mortgage Association
Pool #46609
8.00% Due 05/01/2002 53,660
</TABLE>
See Notes to Financial Statements 36
<PAGE>
INTERMEDIATE-TERM BOND FUND (CONTINUED)
Statement of Investments
March 31, 1999 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Principal
Amount Value
- ----------- -----------
UNITED STATES GOVERNMENT AND AGENCY
OBLIGATIONS (Continued)
<C> <S> <C> <C>
$ 84,951 Federal National Mortgage Association
Pool #46872
8.00% Due 05/01/2002 $ 87,160
5,032 Federal National Mortgage Association
Pool #47137
8.00% Due 05/01/2002 5,179
94,760 Federal National Mortgage Association
Pool #47402
8.00% Due 05/01/2002 97,517
70,371 Federal National Mortgage Association
Pool #47932
8.00% Due 05/01/2002 72,419
41,034 Federal National Mortgage Association
Pool #48103
8.00% Due 05/01/2002 42,228
9,983 Federal National Mortgage Association
Pool #7242
8.50% Due 07/01/2001 10,306
2,289 Federal National Mortgage Association
Pool #29658
8.50% Due 07/01/2001 2,363
44,384 Federal National Mortgage Association
Pool #30409
8.50% Due 09/01/2001 45,819
12,276 Federal National Mortgage Association
Pool #26607
9.00% Due 05/01/2001 12,702
6,525 Federal National Mortgage Association
Pool #26707
9.00% Due 05/01/2001 6,752
76,203 Federal National Mortgage Association
Pool #28785
9.00% Due 06/01/2001 78,846
48,067 Federal National Mortgage Association
Pool #28645
9.00% Due 06/01/2001 49,734
14,038 Federal National Mortgage Association
Pool #29470
9.00% Due 07/01/2001 14,525
436,130 Federal National Mortgage Association
Pool #82407
9.00% Due 03/01/2004 454,569
252,244 Federal National Mortgage Association
Remic 1990-132Z
7.00% Due 11/25/2020 251,995
<CAPTION>
Principal
Amount Value
- ----------- -----------
<C> <S> <C> <C>
UNITED STATES GOVERNMENT AND AGENCY
OBLIGATIONS (Continued)
$ 177,000 Federal National Mortgage Association
Remic G-41PT
7.50% Due 10/25/2021 $ 186,333
582,261 Federal National Mortgage Association
Remic 1992-131H
7.50% Due 06/25/2021 588,091
1,000,000 Federal National Mortgage Association
Remic 1992-138P
7.50% Due 08/25/2022 1,011,619
225,000 Federal National Mortgage Association
Remic 1992-202J
7.50% Due 04/25/2020 231,257
244,000 Federal National Mortgage Association
Remic 1993-1G
7.50% Due 01/25/2022 250,306
700,000 Federal National Mortgage Association
Remic 1993-89D
7.00% Due 06/25/2023 699,910
1,200,000 Federal National Mortgage Association
Remic 1994-38J
7.00% Due 11/25/2012 1,223,549
1,000,000 Federal National Mortgage Association
Remic 1994-75N
7.00% Due 04/25/2024 1,005,505
260,888 Federal National Mortgage Association
Remic 1997-7U
7.00% Due 08/18/2022 262,066
2,780,000 Federal National Mortgage Association
Remic 92-135J
7.50% Due 02/25/2021 2,836,298
711,000 Federal National Mortgage Association
Remic 92-174H
7.25% Due 09/25/2021 722,295
192,000 Federal National Mortgage Association
Remic 93-4LA
8.00% Due 01/25/2023 205,199
645,000 Federal National Mortgage Association
Remic 93-54J
6.75% Due 10/25/2022 638,223
538,268 Federal National Mortgage Association
Remic G92-40ZC
7.00% Due 07/25/2022 544,692
1,000,000 Federal National Mortgage Association
Remic G93-32J
6.75% Due 05/25/2009 1,022,458
</TABLE>
See Notes to Financial Statements 37
<PAGE>
INTERMEDIATE-TERM BOND FUND (CONTINUED)
Statement of Investments
March 31, 1999 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Principal
Amount Value
- ----------- -----------
UNITED STATES GOVERNMENT AND AGENCY
OBLIGATIONS (Continued)
<C> <S> <C> <C>
$ 1,821,293 Federal National Mortgage Association
Remic 1993-188QZ
6.00% Due 10/25/2008 $ 1,802,459
230,000 Federal National Mortgage Association
Remic G93-38H
6.50% Due 12/25/2023 229,514
429,144 Federal National Mortgage Association
Remic G93-40ZC
6.50% Due 12/25/2023 412,341
331,876 Federal National Mortgage Association
Remic 94-32Z
6.50% Due 03/25/2009 334,114
292,738 Federal National Mortgage Association
Remic 94-20Z
6.50% Due 02/25/2009 293,819
665,249 Federal National Mortgage Association
Remic 98-34AV
6.50% Due 06/18/2028 666,360
2,718,944 Federal National Mortgage Association
Remic 94-76KB
0.00% Due 04/25/2024 2,292,861
15,982 Federal National Mortgage Association Strips
0.00% Due 03/01/2018 13,192
542,173 Government National Mortgage Association
Pool #002326
8.50% Due 11/20/2026 568,115
318,726 Government National Mortgage Association
Pool #9257
8.25% Due 06/20/2025 332,642
8,574 Government National Mortgage Association
Pool #008881
8.25% Due 03/15/2006 9,046
991 Government National Mortgage Association
Pool #009335
8.25% Due 04/15/2006 1,046
770,532 Government National Mortgage Association
Pool #409781
8.25% Due 08/15/2025 810,916
<CAPTION>
Principal
Amount Value
- ----------- -----------
<C> <S> <C> <C>
UNITED STATES GOVERNMENT AND AGENCY
OBLIGATIONS (Continued)
$ 368,035 Government National Mortgage Association
Pool #427291
8.25% Due 12/15/2027 $ 387,011
387,387 Government National Mortgage Association
Pool #453323
8.25% Due 09/15/2027 407,361
503,934 Government National Mortgage Association
Pool #453336
8.25% Due 09/15/2027 529,917
1,625,476 Government National Mortgage Association
Pool #440640
8.25% Due 06/15/2027 1,709,285
200,000 United States Treasury Notes
7.75% Due 02/15/2001 209,625
4,000,000 United States Treasury Strips
0.00% Due 08/15/2002 3,365,756
-----------
Total United States Government and Agency Obligations
(Cost $50,075,548) $50,454,493
-----------
SHORT TERM INVESTMENTS
COMMERCIAL PAPER 11.3%
$ 1,000,000 Duke Energy Corp.
5.00% Due 04/01/1999 $ 1,000,000
3,000,000 Merrill Lynch
5.00% Due 04/01/1999 3,000,000
3,000,000 Mobil Corp.
5.00% Due 04/01/1999 3,000,000
-----------
Total Commercial Paper (Cost $7,000,000) $ 7,000,000
-----------
Total Investments (Cost $61,536,007) 99.7% 61,920,147
Other Assets, Less Liabilities 0.3% 185,912
----- -----------
Net Assets 100.0% $62,106,059
----- -----------
----- -----------
</TABLE>
See Notes to Financial Statements 38
<PAGE>
INTERMEDIATE-TERM BOND FUND (CONTINUED)
Statement of Assets and Liabilities March 31, 1999 (Unaudited)
---------------------------------------------------------------
<TABLE>
<S> <C> <C>
ASSETS:
Investments in securities at value (Cost
$61,536,007)--Note 2(A) $61,920,147
Cash 91,080
Receivable for units sold 19,687
Interest receivable 457,234
Collateral for securities loaned, at fair value (Note
4) 1,486,310
Other assets 9,835
-----------
63,984,293
LIABILITIES:
Payable for investments purchased $292,343
Payable upon return of securities loaned (Note 4) 1,486,310
Payable for units redeemed 22,195
Payable to investment managers 20,017
Accrued expenses 57,369 1,878,234
-------- -----------
NET ASSETS at value, applicable to 1,802,320 outstanding
units of beneficial interest--Note 5 $62,106,059
-----------
-----------
NET ASSET VALUE offering and redemption price per unit
($62,106,059 divided by 1,802,320 units) $ 34.46
-----------
-----------
</TABLE>
Statement of Operations Six Months Ended March 31, 1999
(Unaudited)
---------------------------------------------------------------
<TABLE>
<S> <C> <C>
INVESTMENT INCOME:
Income:
Interest $1,894,817
----------
Total Income $1,894,817
Expenses:
Investment manager's fees--Note 3(A) 112,795
Shareholder servicing fees and expenses--Note 3(B) 154,549
Custodian fees and expenses 6,458
Legal and auditing fees 10,921
Consultant fees 6,798
Trustees' fees and expenses--Note 3(C) 15,665
Printing and Postage 6,565
Pricing fees 7,062
Insurance 4,359
Other 10,004
----------
Net Expenses 335,176
----------
INVESTMENT INCOME--NET 1,559,641
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS--Note
4:
Net realized gain on investments 35,700
Unrealized (depreciation) on investments (950,083)
----------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS (914,383)
----------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 645,258
----------
----------
</TABLE>
See Notes to Financial Statements
39
<PAGE>
INTERMEDIATE-TERM BOND FUND (CONTINUED)
Statement of Changes in Net Assets (Unaudited)
---------------------------------------------------------------
<TABLE>
<CAPTION>
Six Months Year
Ended Ended
3/31/99 9/30/98
(Unaudited) (Audited)
----------- -----------
<S> <C> <C>
OPERATIONS:
Investment income--net $ 1,559,641 $ 3,815,398
Net realized gain 35,700 864,694
Net unrealized appreciation (depreciation) (950,083) 282,393
----------- -----------
Net increase in net assets resulting from operations 645,258 4,962,485
----------- -----------
CAPITAL TRANSACTIONS--Note 5:
Value of units sold 9,908,213 7,479,124
Value of units redeemed (8,165,828) (21,111,961)
----------- -----------
Net increase (decrease) in net assets resulting from capital
transactions 1,742,385 (13,632,837)
----------- -----------
Net increase (decrease) 2,387,643 (8,670,352)
NET ASSETS at beginning of year 59,718,416 68,388,768
----------- -----------
NET ASSETS at end of period $62,106,059 $59,718,416
----------- -----------
----------- -----------
</TABLE>
See Notes to Financial Statements
40
<PAGE>
SHORT-TERM INVESTMENT FUND
Statement of Investments
March 31, 1999 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Principal
Amount Value
- ---------- -----------
<C> <S> <C> <C>
CORPORATE BONDS 0.3%
$ 75,000 Potomac Electric Power Co.
4.50% Due 05/15/1999 $ 75,000
-----------
Total Corporate Bonds (Cost $75,000) 75,000
-----------
COMMERCIAL PAPER 1.0%
$ 300,000 Ford Motor Credit Co.
4.83% Due 04/05/1999 $ 299,838
-----------
Total Commercial Paper (Cost $299,838) 299,838
-----------
UNITED STATES GOVERNMENT AND AGENCY
OBLIGATIONS 50.6%
$1,345,000 Federal Home Loan Bank
6.10% Due 10/12/2000 $ 1,352,223
500,000 Federal Home Loan Bank
5.21% Due 10/20/2000 498,521
500,000 Federal Home Loan Bank
5.29% Due 10/27/2000 498,871
250,000 Federal Home Loan Mortgage Corp.
5.52% Due 01/08/2001 249,844
500,000 Federal Home Loan Mortgage Corp.
5.50% Due 01/08/2001 499,593
250,000 Federal Home Loan Mortgage Corp.
5.48% Due 02/26/2001 249,698
322,365 Federal Home Loan Mortgage Corp.
Pool #50337
7.50% Due 10/01/2000 325,931
56,145 Federal Home Loan Mortgage Corp.
Pool #90119
7.00% Due 05/01/1999 56,126
227,946 Federal Home Loan Mortgage Corp.
Pool #91909
6.50% Due 09/01/1999 229,423
80,921 Federal Home Loan Mortgage Corp.
Pool #80095
7.50% Due 05/01/1999 80,921
160,005 Federal Home Loan Mortgage Corp.
Pool #80120
7.00% Due 08/01/1999 161,450
186,042 Federal Home Loan Mortgage Corp.
Pool #80157
7.00% Due 03/01/2000 189,548
152,472 Federal Home Loan Mortgage Corp.
Pool #90345
7.00% Due 05/01/1999 152,552
<CAPTION>
Principal
Amount Value
- ---------- -----------
<C> <S> <C> <C>
UNITED STATES GOVERNMENT AND AGENCY
OBLIGATIONS (Continued)
$ 43,078 Federal Home Loan Mortgage Corp.
Pool #90352
7.50% Due 05/01/1999 $ 43,108
275,160 Federal Home Loan Mortgage Corp.
Pool #90337
6.00% Due 05/01/1999 275,132
115,863 Federal Home Loan Mortgage Corp.
Pool #90345
7.50% Due 08/01/1999 117,145
444,007 Federal Home Loan Mortgage Corp.
Pool #90360
7.50% Due 09/01/1999 448,918
436,621 Federal Home Loan Mortgage Corp.
Pool #90366
7.50% Due 10/01/1999 441,450
305,963 Federal Home Loan Mortgage Corp.
Pool #90397
7.50% Due 04/01/2000 311,241
68,665 Federal Home Loan Mortgage Corp.
Pool #93400
6.50% Due 04/01/2000 69,580
226,660 Federal Home Loan Mortgage Corp.
Pool #99025
7.50% Due 01/01/2000 229,183
679,582 Federal Home Loan Mortgage Corp.
Pool #99023
7.50% Due 01/01/2000 687,146
175,721 Federal Home Loan Mortgage Corp.
Pool #72494
7.50% Due 06/01/1999 177,665
11,102 Federal Home Loan Mortgage Corp.
Pool #72804
7.50% Due 09/01/1999 11,225
467,635 Federal Home Loan Mortgage Corp.
Pool #73383
6.50% Due 10/01/2000 472,471
214,246 Federal Home Loan Mortgage Corp.
Pool #40001
7.00% Due 08/01/2000 218,283
97,845 Federal Home Loan Mortgage Corp.
Pool #40009
6.50% Due 09/01/2000 99,149
341,124 Federal Home Loan Mortgage Corp.
Pool #50192
6.50% Due 09/01/1999 343,353
</TABLE>
See Notes to Financial Statements 41
<PAGE>
SHORT-TERM INVESTMENT FUND (CONTINUED)
Statement of Investments
March 31, 1999 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Principal
Amount Value
- ---------- -----------
UNITED STATES GOVERNMENT AND AGENCY
OBLIGATIONS (Continued)
<C> <S> <C> <C>
$ 40,971 Federal Home Loan Mortgage Corp.
Pool #80044
6.00% Due 11/01/2000 $ 41,132
40,467 Federal Home Loan Mortgage Corp.
Pool #90122
7.00% Due 07/01/1999 40,824
152,185 Federal Home Loan Mortgage Corp.
Pool #90155
7.00% Due 01/01/2000 153,526
489,200 Federal Home Loan Mortgage Corp.
Remic 1674 VA
4.95% Due 07/15/2000 487,655
300,000 Federal National Mortgage Association
Medium Term Note
5.16% Due 12/22/2000 298,712
9,566 Federal National Mortgage Association
Pool #50649
8.00% Due 08/01/1999 9,679
48,870 Federal National Mortgage Association
Pool #50702
7.50% Due 01/01/2000 49,745
1,086,184 Federal National Mortgage Association
Pool #50754
6.50% Due 06/01/2000 1,098,534
42,341 Federal National Mortgage Association
Pool #124368
8.00% Due 06/01/1999 42,840
12,740 Federal National Mortgage Association
Pool #124590
8.00% Due 08/01/1999 12,890
84,694 Federal National Mortgage Association
Pool #124643
7.50% Due 01/01/2000 85,507
1,538,649 Federal National Mortgage Association
Pool #124673
7.00% Due 02/01/2000 1,562,129
84,844 Federal National Mortgage Association
Pool #124789
7.50% Due 04/01/2000 86,362
<CAPTION>
Principal
Amount Value
- ---------- -----------
<C> <S> <C> <C>
UNITED STATES GOVERNMENT AND AGENCY
OBLIGATIONS (Continued)
$ 118,099 Federal National Mortgage Association
Pool #124833
7.50% Due 05/01/2000 $ 119,233
332,067 Federal National Mortgage Association
Pool #190781
7.50% Due 05/01/2000 335,256
112,792 Federal National Mortgage Association
Pool #190808
7.50% Due 04/01/2000 113,875
789,247 Federal National Mortgage Association
Pool #303072
7.50% Due 07/01/2000 796,824
288,366 Federal National Mortgage Association
Pool #303581
7.00% Due 01/01/2000 290,535
37,486 Federal National Mortgage Association
Remic 1992-79LB
7.00% Due 09/25/1999 37,496
80,202 Federal National Mortgage Association
Remic 1992-106G
7.00% Due 06/25/1999 79,961
236,531 Federal National Mortgage Association
Remic 1993-33E
6.25% Due 05/25/2000 237,130
-----------
Total United States Government and Agency
Obligations (Cost $14,412,874) $14,469,595
-----------
REPURCHASE AGREEMENT 52.6%
$15,050,000 Cantor Fitzgerald, Inc. Dated 3/31/1999 4.90%
Due 4/1/99 Collateralized by $12,766,000
United States Treasury Bond Due 2/15/2003
(Value $15,351,115) $15,050,000
-----------
Total investments (Cost $29,837,712) 104.5% $29,894,434
Liabilities, net of other assets (4.5%) (1,273,644)
----- -----------
Net Assets 100.0% $28,620,790
----- -----------
----- -----------
</TABLE>
See Notes to Financial Statements 42
<PAGE>
SHORT-TERM INVESTMENT FUND (CONTINUED)
Statement of Assets and Liabilities March 31, 1999 (Unaudited)
---------------------------------------------------------------
<TABLE>
<S> <C> <C>
ASSETS:
Investments in securities at value (Cost
$29,837,712)--Note 2(A) $29,894,433
Cash 41,056
Receivable for units sold 176,585
Interest receivable 140,743
Other assets 22,423
-----------
30,275,240
LIABILITIES:
Payable for securities purchased $1,571,860
Payable for units redeemed 33,293
Payable to investment managers 5,964
Accrued expenses 43,333 1,654,450
-------- -----------
NET ASSETS at value, applicable to 1,253,942 outstanding
units of beneficial interest--Note 5 $28,620,790
-----------
-----------
NET ASSET VALUE offering and redemption price per unit
($28,620,790 divided by 1,253,942 units) $ 22.82
-----------
-----------
</TABLE>
Statement of Operations Six Months Ended March 31, 1999
(Unaudited)
---------------------------------------------------------------
<TABLE>
<S> <C> <C>
INVESTMENT INCOME:
Income:
Interest $ 743,717
---------
Total Income $ 743,717
Expenses:
Investment manager's fees--Note 3(A) 34,550
Shareholder servicing fees and expenses--Note 3(B) 81,580
Custodian fees and expenses 4,948
Legal and auditing fees 10,692
Consultant fees 6,797
Trustees' fees and expenses--Note 3(C) 15,665
Printing and Postage 6,567
Pricing fees 2,387
Insurance 1,555
Other 9,984
---------
Total Expenses 174,725
Less expense reimbursement--Note 3(A) (64,165)
Net Expenses 110,560
---------
INVESTMENT INCOME--NET 633,157
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS--Note 4:
Net realized (loss) on investments (21,498)
Unrealized appreciation on investments 18,245
---------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS (3,253)
---------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 629,904
---------
---------
</TABLE>
See Notes to Financial Statements
43
<PAGE>
SHORT-TERM INVESTMENT FUND (CONTINUED)
Combined Statement of Changes in Net Assets
---------------------------------------------------------------
<TABLE>
<CAPTION>
Six Months Year
Ended Ended
3/31/99 9/30/98
(Unaudited) (Audited)
----------- -----------
<S> <C> <C>
OPERATIONS:
Investment income--net $ 633,157 $ 1,208,717
Net realized (loss) (21,498) (625)
Net unrealized appreciation 18,245 21,885
----------- -----------
Net increase in net assets resulting from operations 629,904 1,229,977
----------- -----------
CAPITAL TRANSACTIONS--Note 5:
Value of units sold 20,406,399 51,447,590
Value of units redeemed (24,800,033) (47,314,082)
----------- -----------
Net increase (decrease) in net assets resulting from capital
transactions (4,393,634) 4,133,508
----------- -----------
Net increase (decrease) (3,763,730) 5,363,485
NET ASSETS at beginning of year 32,384,520 27,021,035
----------- -----------
NET ASSETS at end of period $28,620,790 $32,384,520
----------- -----------
----------- -----------
</TABLE>
See Notes to Financial Statements
44
<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,
1999 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-").
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 equity security is valued at its closing
price obtained from the respective primary exchange on
which the security is listed, or, if there were no sales
on that day, at its last reported current closing price;
(2)each unlisted equity security quoted on the NASDAQ is
valued at the last current bid price obtained from the
NASDAQ;
(3)United States Government and agency and instrumentality
obligations are valued based upon bid quotations from
various market makers for identical or similar
obligations;
(4)short-term money market instruments (such as
certificates of deposit, bankers' acceptances and
commercial paper) are most often valued by bid quotation
or by reference to bid quotations of available yields
for similar instruments of issuers with similar credit
ratings.
45
<PAGE>
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, assets are valued at their
fair value as determined by the officers of the Fund using
methods and procedures reviewed and approved by the Trustees.
Investments denominated in foreign currencies are
translated to United States dollars at the prevailing rate 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 plus one basis.
Realized gain and loss from securities transactions are
recorded on a First In-First Out (FIFO) 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) SECURITIES LOANS: The Investment Funds lend their
securities to other market participants and receive
compensation in the form of fees or they retain a portion
of interest on the investment of any cash received as
collateral. The Investment Funds also continue to receive
interest or dividends on the securities loaned. The loans
are secured by collateral at least equal, at all times, to
the fair value of the securities loaned plus accrued
interest. Gain or loss in the fair value of the securities
loaned that may occur during the term of the loan will be
for the account of the Investment Funds.
(D) DIVIDENDS TO UNITHOLDERS: RSI does not normally declare
nor pay dividends on its net investment income or capital
gains.
(E) FEDERAL INCOME TAXES: RSI has received a determination
letter from the Internal Revenue Service stating that it is
exempt from taxation under Section
46
<PAGE>
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.
(F) 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 year. Actual results could differ from those
estimates.
(G) 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.
(H) 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 a portion of the remaining Trust
Investment Funds and a portion of the Emerging Growth
Equity Fund, and in the case of all Investment Funds,
exercises general oversight with respect to the portfolio
47
<PAGE>
management, including reporting of manager performance to
the Trustees and Investment Committee, compliance matters,
sub-advisory portfolio analysis, and presentations to
unitholders.
Beginning February 8, 1999, Investors, Inc. assumed
portfolio management of a portion of the Emerging Growth
Equity Fund, replacing Friess Associates, Inc. HLM
Management Company, Inc. continues as sub-advisor to the
balance of the Emerging Growth Equity Fund.
Beginning March 1, 1999, Bank of Ireland Asset Management
(U.S.) Limited became the sub-advisor to the International
Equity Fund, replacing Morgan Grenfell Investment Services
Limited.
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 basis
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 .60% on first $50 million
Investors Inc. .50% on next $150
million,
and .40% over $200
million
Value Equity Fund Retirement System .60% on first $10
Investors Inc. 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, 1.00%
Equity Fund Inc.
(Sub-adviser
through 2/7/99)
Retirement System 1.00%
Investors, Inc.
(Portfolio manager
beginning 2/8/99)
HLM Management 1.00% on first $25
Company, Inc. million
(Sub-adviser) .80% on next $25 million,
and .60% over $50 million
International Morgan Grenfell .60% on first $50
Equity Fund Investment million,
Services Limited and .50% over $50 million
(Sub-adviser
through 2/28/99)
Bank of Ireland .60% on first $50
Asset million,
Management (U.S.) and .50% over $50 million
Limited
(Sub-adviser
beginning 3/1/99)
</TABLE>
48
<PAGE>
<TABLE>
<CAPTION>
INVESTMENT FUND INVESTMENT MANAGER FEE
- ------------------------- -------------------- -------------------------
<S> <C> <C>
*.75% on first $20
million,
.50% on next $30 million,
and .35% over $50 million
</TABLE>
Actively Managed Retirement System .40% on first $50
Bond Fund Investors, Inc. million,
.30% on next $100
million,
and .20% over $150
million
Intermediate-Term Retirement System .40% on first $50
Bond Fund Investors Inc. million,
.30% on next $100
million,
and .20% over $150
million
Short-Term Retirement System .25 on first $50 million,
Investment Fund Investors Inc. and .20% over $50 million
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 March
31, 1999, Investors has voluntarily waived a portion of its
investment manager's fee from the Short-Term Investment
Fund amounting to $64,165, to limit the Fund's annual
expenses to 0.80% of average net assets.
(B) Shareholder servicing fees and expenses for the year 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%
Over $75 million .30%
</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. Several 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.
- --------------------------
* Fee structure change, effective 4/26/99, as approved by unitholders.
49
<PAGE>
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, 1999:
<TABLE>
<CAPTION>
PURCHASES SALES
-------------- --------------
<S> <C> <C>
Core Equity Fund $ 3,275,212 $ 19,525,217
Value Equity Fund 22,093,657 27,313,724
Emerging Growth Equity Fund 81,949,753 88,769,448
International Equity Fund 32,792,631 39,909,827
Actively Managed Bond Fund 67,051,251 45,673,721
Intermediate-Term Bond Fund 16,214,367 20,877,244
</TABLE>
Net unrealized appreciation (depreciation) consisting of
gross unrealized appreciation and gross unrealized depreciation
at March 31, 1999 for each of the Investment Funds was as
follows:
<TABLE>
<CAPTION>
GROSS GROSS
NET UNREALIZED UNREALIZED UNREALIZED
APPRECIATION APPRECIATION DEPRECIATION
---------------- ---------------- --------------
<S> <C> <C> <C>
Core Equity Fund $ 138,092,047 $ 140,311,819 $ (2,219,772)
Value Equity Fund 11,274,632 15,628,508 (4,353,876)
Emerging Growth Equity Fund 5,716,169 9,872,156 (4,155,987)
International Equity Fund 2,658,653 3,361,426 (702,773)
Actively Managed Bond Fund 4,676,136 5,501,382 (825,246)
Intermediate-Term Bond Fund 384,140 557,573 (173,433)
Short-Term Investment Fund 56,722 61,771 (5,049)
</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, 1999:
<TABLE>
<CAPTION>
VALUE OF
SECURITIES VALUE OF
LOANED COLLATERAL
-------------- --------------
<S> <C> <C>
Core Equity Fund $ 1,324,522 $ 1,399,479
Value Equity Fund 2,666,128 2,858,312
Emerging Growth Equity Fund 8,613,973 9,265,820
International Equity Fund 570,023 602,075
Actively Managed Bond Fund 13,994,728 14,289,295
Intermediate Term Bond Fund 3,816,644 3,889,463
Short-Term Investment Fund 0 0
</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
50
<PAGE>
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 and its adoption had no effect on the net assets of the
Investment Funds.
For the period ended March 31, 1999 the Emerging Growth
Equity Fund, Value Equity Fund, and the International Equity
Fund each had expenses paid through brokerage/service
arrangements which amounted to $10,000, $0 and $5,000
respectively.
51
<PAGE>
NOTE 5--CAPITAL TRANSACTIONS:
At March 31, 1999 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 year ended March 31, 1999 were as
follows:
<TABLE>
<CAPTION>
Core Equity Value Equity
Fund Fund
------------------------ -----------------------
Units Amount Units Amount
---------- ------------ --------- ------------
<S> <C> <C> <C> <C>
Units sold 127,479 $ 11,949,566 85,982 $ 5,779,915
Units redeemed (332,045) (31,264,611) (170,357) (11,356,355)
---------- ------------ --------- ------------
Net (decrease) (204,566) $(19,315,045) (84,375) $ (5,576,440)
---------- ------------ --------- ------------
---------- ------------ --------- ------------
</TABLE>
<TABLE>
<CAPTION>
Emerging Growth International
Equity Fund Equity Fund
------------------------ -----------------------
Units Amount Units Amount
---------- ------------ --------- ------------
<S> <C> <C> <C> <C>
Units sold 63,288 $ 3,968,374 27,864 $ 1,443,852
Units redeemed (182,505) (11,568,927) (130,828) (6,791,461)
---------- ------------ --------- ------------
Net (decrease) (119,217) $ (7,600,553) (102,964) $ (5,347,609)
---------- ------------ --------- ------------
---------- ------------ --------- ------------
</TABLE>
<TABLE>
<CAPTION>
Actively Managed Intermediate-Term
Bond Fund Bond Fund
------------------------ --------------------------
Units Amount Units Amount
---------- ------------ ------------ ------------
<S> <C> <C> <C> <C>
Units sold 984,745 $ 37,148,139 289,747 $ 9,908,213
Units redeemed (385,997) (14,595,784) (238,717) (8,165,828)
---------- ------------ ------------ ------------
Net increase 598,748 $ 22,552,355 51,030 $ 1,742,385
---------- ------------ ------------ ------------
---------- ------------ ------------ ------------
</TABLE>
<TABLE>
<CAPTION>
Short-Term
Investment Fund
------------------------
Units Amount
---------- ------------
<S> <C> <C>
Units sold 901,971 $ 20,406,399
Units redeemed (1,099,504) (24,800,033)
---------- ------------
Net (decrease) (197,533) $ (4,393,634)
---------- ------------
---------- ------------
</TABLE>
52
<PAGE>
Transactions in the units of beneficial interest of each
Investment Fund for the year ended September 30, 1998 were as
follows:
<TABLE>
<CAPTION>
Core Value
Equity Fund Equity Fund
------------------------ -----------------------
Units Amount Units Amount
---------- ------------ --------- ------------
<S> <C> <C> <C> <C>
Units sold 276,487 $ 22,854,166 334,572 $ 20,642,979
Units redeemed (844,421) (68,118,523) (251,265) (15,152,673)
---------- ------------ --------- ------------
Net increase
(decrease) (567,934) $(45,264,357) 83,307 $ 5,490,306
---------- ------------ --------- ------------
---------- ------------ --------- ------------
</TABLE>
<TABLE>
<CAPTION>
Emerging Growth International
Equity Fund Equity Fund
------------------------ -----------------------
Units Amount Units Amount
---------- ------------ --------- ------------
<S> <C> <C> <C> <C>
Units sold 153,746 $ 11,606,019 195,365 $ 9,648,430
Units redeemed (231,027) (17,083,955) (135,770) (6,755,055)
---------- ------------ --------- ------------
Net increase
(decrease) (77,281) $ (5,477,936) 59,595 $ 2,893,375
---------- ------------ --------- ------------
---------- ------------ --------- ------------
</TABLE>
<TABLE>
<CAPTION>
Actively Managed Intermediate-Term
Bond Fund Bond Fund
------------------------ -----------------------
Units Amount Units Amount
---------- ------------ --------- ------------
<S> <C> <C> <C> <C>
Units sold 744,236 $ 26,734,278 227,648 $ 7,479,124
Units redeemed (782,105) (27,911,465) (643,793) (21,111,961)
---------- ------------ --------- ------------
Net (decrease) (37,869) $ (1,177,187) (416,145) $(13,632,837)
---------- ------------ --------- ------------
---------- ------------ --------- ------------
</TABLE>
<TABLE>
<CAPTION>
Short-Term
Investment Fund
------------------------
Units Amount
---------- ------------
<S> <C> <C>
Units sold 2,372,449 $ 51,447,590
Units redeemed (2,193,734) (47,314,082)
---------- ------------
Net increase 178,715 $ 4,133,508
---------- ------------
---------- ------------
</TABLE>
53
<PAGE>
Net Assets at March 31, 1999 are comprised as follows:
<TABLE>
<CAPTION>
Emerging
Growth
Core Equity Equity Value International
Fund Fund Equity Fund Equity Fund
------------- ------------ ------------ -----------
<S> <C> <C> <C> <C>
Paid-in capital (deficit) $(166,770,328) $(48,344,849) $(33,507,568) $(7,555,720)
Accumulated income (loss) 49,081,020 (4,386,739) 19,685,777 (1,418,143)
Accumulated realized gain 182,847,774 105,668,298 77,148,345 40,736,182
Unrealized appreciation 138,092,047 5,716,169 11,274,632 2,628,515
------------- ------------ ------------ -----------
$ 203,250,513 $ 58,652,879 $ 74,601,186 $34,390,834
------------- ------------ ------------ -----------
------------- ------------ ------------ -----------
</TABLE>
<TABLE>
<CAPTION>
Short-Term Actively
Investment Intermediate-Term Managed
Fund Bond Fund Bond Fund
-------------- --------------- ------------
<S> <C> <C> <C>
Paid-in capital (deficit) $(15,455,444) $ (82,594,721) $(26,651,554)
Accumulated income 42,711,725 128,181,692 170,947,589
Accumulated realized gain 1,307,787 16,134,948 37,459,854
Unrealized appreciation 56,722 384,140 4,676,137
-------------- --------------- ------------
$ 28,620,790 $ 62,106,059 $186,432,026
-------------- --------------- ------------
-------------- --------------- ------------
</TABLE>
54
<PAGE>
NOTE 6--FINANCIAL INSTRUMENTS WITH OFF-BALANCE SHEET RISK:
The Investment Funds activity during the year 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 year follows:
<TABLE>
<CAPTION>
Number of
Options Premiums
Contracts Received
------------- -----------
<S> <C> <C>
Core Equity Fund
Contracts outstanding at September 30, 1998 3 $ 2,622
Options written 160 88,277
Options exercised 0 0
Options expired (93) (33,876)
--- -----------
Contracts outstanding at March 31, 1999 70 $ 57,023
--- -----------
--- -----------
</TABLE>
As of March 31, 1999, the International Equity Fund had
outstanding forward currency contracts as set forth below.
These contracts are reported in the financial statements at the
Fund's net gain of $11,538 which is the difference between the
forward foreign exchange rates at the dates of entry into the
contracts and the forward rates at March 31, 1999.
<TABLE>
<CAPTION>
Contracts to sell
-------------------------------
<S> <C> <C> <C>
48,453,000 Japanese Yen for U.S. $412,191 05/18/99 $ 2,238
42,981,000 Japanese Yen for U.S. $365,933 05/24/99 $ 2,147
34,579,000 Japanese Yen for U.S. $294,555 05/28/99 $ 1,813
39,619,000 Japanese Yen for U.S. $338,035 06/09/99 $ 2,384
75,573,000 Japanese Yen for U.S. $645,322 06/15/99 $ 4,840
48,662,000 Japanese Yen for U.S. $410,927 07/02/99 $ (1,883)
</TABLE>
55
<PAGE>
NOTE 7--FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
CORE EQUITY FUND
--------------------------------------------------------------
Six
Months
Ended Year Year Year Year Year
3/31/99 Ended Ended Ended Ended Ended
(Unaudited) 9/30/98 9/30/97 9/30/96 9/30/95 9/30/94
------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C>
Per Unit Operating
Performance:*
(for a unit outstanding
throughout the period)
Net Asset Value, Beginning of
Period $79.41 $76.11 $56.57 $46.71 $35.57 $34.49
------- ------- ------- ------- ------- -------
Income from Investment
Operations:
Investment income--net 0.19 0.58 0.60 0.72 0.74 0.54
Net realized and unrealized gain
on investments 21.19 2.72 18.94 9.14 10.40 0.54
------- ------- ------- ------- ------- -------
Total from Investment Operations 21.38 3.30 19.54 9.86 11.14 1.08
------- ------- ------- ------- ------- -------
Net Asset Value, End of the
Period $100.79 $79.41 $76.11 $56.57 $46.71 $35.57
------- ------- ------- ------- ------- -------
------- ------- ------- ------- ------- -------
Total Return+ 26.92 % 4.34% 34.54% 21.11% 31.32% 3.13%
Ratios/Supplemental Data
Ratios to Average Net Assets++
Expenses (0.97)% (0.94)% (0.90)% (0.92)% (0.98)% (1.01)%
Investment income--net 0.41 % 0.72% 0.92% 1.40% 1.86% 1.56%
Portfolio Turnover Rate+ 1.67 % 5.62% 5.68% 9.95% 7.91% 6.47%
Net Assets at End of the Period
($1,000's) $203,251 $176,367 $212,273 $217,356 $189,942 $141,544
</TABLE>
* Using average units basis.
+ Not annualized for periods of less than a year.
++ Annualized for periods of less than a year.
56
<PAGE>
<TABLE>
<CAPTION>
VALUE EQUITY FUND
--------------------------------------------------------------
Six
Months
Ended Year Year Year Year Year
3/31/99 Ended Ended Ended Ended Ended
(Unaudited) 9/30/98 9/30/97 9/30/96 9/30/95 9/30/94
------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C>
Per Unit Operating
Performance:*
(for a unit outstanding
throughout the period)
Net Asset Value, Beginning of Period $56.27 $57.36 $39.67 $32.63 $27.05 $26.48
------- ------- ------- ------- ------- -------
Income from Investment Operations:
Investment income--net 0.32 0.57 0.60 0.72 0.93 0.79
Net realized and unrealized gain
(loss) on investments 14.35 (1.66) 17.09 6.32 4.65 (0.22)
------- ------- ------- ------- ------- -------
Total from Investment Operations 14.67 (1.09) 17.69 7.04 5.58 0.57
------- ------- ------- ------- ------- -------
Net Asset Value, End of the Period $70.94 $56.27 $57.36 $39.67 $32.63 $27.05
------- ------- ------- ------- ------- -------
------- ------- ------- ------- ------- -------
TOTAL RETURN+ 26.07 % (1.90)% 44.59% 21.58% 20.63% 2.15%
Ratios/Supplemental Data
Ratios to Average Net Assets++
Expenses (1.08)% (1.11)% (1.20)% (1.20)% (1.32)% (1.41)%
Investment income--net 0.97 % 0.93% 1.26% 1.98% 3.24% 3.02%
Portfolio Turnover Rate+ 30.90 % 95.66% 99.25% 61.53% 67.06% 40.41%
Net Assets at End of the Period
($1,000's) $74,601 $63,931 $60,389 $52,231 $43,824 $35,603
</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>
EMERGING GROWTH EQUITY FUND
--------------------------------------------------------------
Six
Months
Ended Year Year Year Year Year
3/31/99 Ended Ended Ended Ended Ended
(Unaudited) 9/30/98 9/30/97 9/30/96 9/30/95 9/30/94
------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C>
Per Unit Operating
Performance:*
(for a unit outstanding
throughout the period)
Net Asset Value, Beginning of Period $54.90 $84.47 $67.07 $52.58 $35.96 $35.52
------- ------- ------- ------- ------- -------
Income from Investment Operations:
Investment (loss)--net (0.50) (0.90) (0.95) (0.90) (0.67) (0.57)
Net realized and unrealized gain on
investments 11.67 (28.67) 18.35 15.39 17.29 1.01
------- ------- ------- ------- ------- -------
Total from Investment Operations 11.17 (29.57) 17.40 14.49 16.62 0.44
------- ------- ------- ------- ------- -------
Net Asset Value, End of the Period $66.07 $54.90 $84.47 $67.07 $52.58 $35.96
------- ------- ------- ------- ------- -------
------- ------- ------- ------- ------- -------
Total Return+ 20.35 % (35.01)% 25.94% 27.56% 46.22% 1.24%
Ratios/Supplemental Data
Ratios to Average Net Assets++
Expenses** (2.09)% (1.94)% (1.98)% (1.91)% (2.12)% (2.08)%
Investment income--net (1.65)% (1.22)% (1.39)% (1.54)% (1.61)% (1.64)%
Portfolio Turnover Rate+ 144.47 % 204.41% 177.68% 150.40% 170.54% 114.15%
Net Assets at End of the Period
($1,000's) $58,653 $55,287 $91,589 $92,136 $74,625 $48,293
</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>
INTERNATIONAL EQUITY FUND
--------------------------------------------------------------
Six
Months
Ended Year Year Year Year Year
3/31/99 Ended Ended Ended Ended Ended
(Unaudited) 9/30/98 9/30/97 9/30/96 9/30/95 9/30/94
------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C>
Per Unit Operating
Performance:*
(for a unit outstanding
throughout the period)
Net Asset Value, Beginning of
Period $45.44 $51.09 $45.25 $40.25 $38.08 $34.36
------- ------- ------- ------- ------- -------
Income from Investment
Operations:
Investment (loss)--net (0.27) (0.14) (0.14) (0.08) (0.02) (0.09)
Net realized and unrealized gain
(loss) on investments 7.97 (5.51) 5.98 5.08 2.19 3.81
------- ------- ------- ------- ------- -------
Total from Investment Operations 7.70 (5.65) 5.84 5.00 2.17 3.72
------- ------- ------- ------- ------- -------
Net Asset Value, End of the
Period $53.14 $45.44 $51.09 $45.25 $40.25 $38.08
------- ------- ------- ------- ------- -------
------- ------- ------- ------- ------- -------
Total Return+ 16.95 % (11.06)% 12.91% 12.42% 5.70% 10.83%
Ratios/Supplemental Data
Ratios to Average Net Assets++
Expenses** (2.03)% (1.94)% (1.96)% (1.93)% (1.90)% (1.96)%
Investment income--net (1.11)% (0.27)% (0.29)% (0.20)% (0.07)% (0.25)%
Portfolio Turnover Rate+ 92.25 % 92.82% 61.87% 51.29% 51.40% 44.25%
Net Assets at End of the Period
($1,000's) $34,391 $34,083 $35,276 $39,602 $31,143 $28,672
</TABLE>
* Using average units basis.
+ Not annualized for periods of less than a year.
++ Annualized for periods of less than a year.
59
<PAGE>
<TABLE>
<CAPTION>
ACTIVELY MANAGED
BOND FUND
--------------------------------------------------------------
Six
Months
Ended Year Year Year Year Year
3/31/99 Ended Ended Ended Ended Ended
(Unaudited) 9/30/98 9/30/97 9/30/96 9/30/95 9/30/94
------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C>
Per Unit Operating Performance:*
(for a unit outstanding
throughout the period)
Net Asset Value, Beginning of
Period $37.73 $33.89 $30.79 $29.58 $26.06 $27.43
------- ------- ------- ------- ------- -------
Income from Investment
Operations:
Investment income--net 1.02 2.19 2.04 1.80 1.64 1.47
Net realized and unrealized gain
(loss) on investments (0.72) 1.65 1.06 (0.59) 1.88 (2.84)
------- ------- ------- ------- ------- -------
Total from Investment Operations 0.30 3.84 3.10 1.21 3.52 (1.37)
------- ------- ------- ------- ------- -------
Net Asset Value, End of the
Period $38.03 $37.73 $33.89 $30.79 $29.58 $26.06
------- ------- ------- ------- ------- -------
------- ------- ------- ------- ------- -------
Total Return+ 0.80 % 11.33% 10.07% 4.09% 13.51% (4.99)%
Ratios/Supplemental Data
Ratios to Average Net Assets++
Expenses (0.78)% (0.81)% (0.81)% (0.80)% (0.84)% (0.82)%
Investment income--net 5.90 % 6.16% 6.32% 5.94% 5.95% 5.51%
Portfolio Turnover Rate+ 26.98 % 71.12% 69.29% 17.14% 18.21% 8.54%
Net Assets at End of the Period
($1,000's) $186,432 $162,355 $147,139 $150,304 $140,127 $136,210
</TABLE>
* Using average units basis.
+ Not annualized for periods of less than a year.
++ Annualized for periods of less than a year.
60
<PAGE>
<TABLE>
<CAPTION>
INTERMEDIATE-TERM
BOND FUND
--------------------------------------------------------------
Six
Months
Ended Year Year Year Year Year
3/31/99 Ended Ended Ended Ended Ended
(Unaudited) 9/30/98 9/30/97 9/30/96 9/30/95 9/30/94
------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C>
Per Unit Operating Performance:*
(for a unit outstanding
throughout the period)
Net Asset Value, Beginning of
Period $34.10 $31.55 $29.30 $28.01 $25.40 $25.95
------- ------- ------- ------- ------- -------
Income from Investment
Operations:
Investment income--net 0.87 1.93 1.78 1.74 1.66 1.46
------- ------- ------- ------- ------- -------
Net realized and unrealized gain
(loss) on investments (0.51) 0.62 0.47 (0.45) 0.95 (2.01)
------- ------- ------- ------- ------- -------
Total from Investment Operations 0.36 2.55 2.25 1.29 2.61 (0.55)
------- ------- ------- ------- ------- -------
Net Asset Value, End of the
Period $34.46 $34.10 $31.55 $29.30 $28.01 $25.40
------- ------- ------- ------- ------- -------
------- ------- ------- ------- ------- -------
Total Return+ 1.06 % 8.08% 7.68% 4.61% 10.28% (2.12)%
Ratios/Supplemental Data
Ratios to Average Net Assets++
Expenses (1.14)% (1.10)% (1.04)% (0.98)% (0.98)% (0.95)%
Investment income--net 5.30 % 5.92% 5.86% 6.06% 6.27% 5.68%
Portfolio Turnover Rate+ 28.76 % 107.30% 67.95% 13.20% 15.95% 17.92%
Net Assets at End of the Period
($1,000's) $62,106 $59,718 $68,389 $74,754 $90,482 $89,780
</TABLE>
* Using average units basis.
+ Not annualized for periods of less than a year.
++ Annualized for periods of less than a year.
61
<PAGE>
<TABLE>
<CAPTION>
SHORT-TERM INVESTMENT FUND
--------------------------------------------------------------
Six
Months
Ended Year Year Year Year Year
3/31/99 Ended Ended Ended Ended Ended
(Unaudited) 9/30/98 9/30/97 9/30/96 9/30/95 9/30/94
------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C>
Per Unit Operating
Performance:*
(for a unit outstanding
throughout the period)
Net Asset Value, Beginning of
Period $22.31 $21.23 $20.24 $19.31 $18.36 $17.83
------- ------- ------- ------- ------- -------
Income from Investment
Operations:
Investment income--net 0.51 1.06 0.97 0.94 0.93 0.53
Net realized and unrealized gain
(loss) on investments 0.00 0.02 0.02 (0.01) 0.02 0.00
------- ------- ------- ------- ------- -------
Total from Investment Operations 0.51 1.08 0.99 0.93 0.95 0.53
------- ------- ------- ------- ------- -------
Net Asset Value, End of the
Period $22.82 $22.31 $21.23 $20.24 $19.31 $18.36
------- ------- ------- ------- ------- -------
------- ------- ------- ------- ------- -------
Total Return+ 2.29 % 5.09% 4.89% 4.82% 5.17% 2.97%
Ratios/Supplemental Data
Ratios to Average Net Assets++
Expenses (0.80)% (0.80)% (0.80)% (0.80)% (0.80)% (0.80)%
Investment income--net 4.58 % 4.89% 4.67% 4.76% 4.94% 2.92%
Decrease in above expense ratio
due to fee waiver 0.46 % 0.50% 0.45% 0.39% 0.34% 0.32%
Net Assets at End of the Period
($1,000's) $28,621 $32,385 $27,021 $25,668 $27,360 $29,975
</TABLE>
* Using average units basis.
+ Not annualized for periods of less than a year.
++ Annualized for periods of less than a year.
62
<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, First Vice President and Treasurer
John F. Meuser, Senior Vice President
Durando J. Saccente, Senior Vice President
Veronica A. Fisher, Vice President and Assistant Treasurer
Chris R. Kaufman, Vice President
Stephen A. Hughes, First Vice President
Herbert Kuhl, Jr., C.F.A., First Vice President
Deborah A. Modzelewski, First Vice President
G. Michael Morgenroth, Second Vice President
CONSULTANTS
---------------------------------------------------------------
Actuarial--Retirement System Consultants Inc.
Administrative and Recordkeeping--Retirement System Consultants
Inc.
Investments--Hewitt Investment Group (a Division of Hewitt
Associates, LLC)
INVESTMENT MANAGERS
---------------------------------------------------------------
Bank of Ireland Asset Management (U.S.) Limited
HLM Management Company, Inc.
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
---------------------------------------------------------------
Swidler Berlin Shereff Friedman, LLP
63
<PAGE>
BOARD OF TRUSTEES
---------------------------------------------------------------
Herbert G. Chorbajian
Vice Chairman
Charter One Financial, Inc.
Cleveland, OH
Candace Cox
Managing Director
Emerald Capital Advisors, NY, NY
James P. Cronin
President, Treasurer and Chief Executive Officer
The Dime Savings Bank of Norwich, Norwich, CT
William Dannecker
President and Chief Executive Officer
Retirement System Group Inc., NY
Ralph L. Hodgkins, Jr.
Retired Chief Executive Officer
Mid Maine Savings Bank, FSB, Auburn, ME
Maurice E. Kinkade
Director of Development
Maplebrook School, Amenia, NY
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 Bank of Utica, NY
William E. Swan
President and Chief Executive Officer
Lockport Savings Bank, NY
Raymond L. Willis
Private Investments
64
<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>
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
1999
BROKER/DEALER
[LOGO]
RETIREMENT SYSTEM
Distributors Inc.
P.O. Box 2064
Grand Central Station
New York, NY 10163-2064
