<PAGE>
The One Group-Registered Trademark-
Family of Mutual Funds
--------------------------------------------------------
Institutional Money Market Funds Semi-Annual Report
FOR THE SIX MONTHS ENDED DECEMBER 31, 1995
Treasury Only Money Market Fund
Government Money Market Fund
<PAGE>
<TABLE>
<S> <C>
May Lose Value
NOT FDIC-INSURED No Bank Guarantee
</TABLE>
<PAGE>
- --------------------------------------------------------------------------------
Table of Contents
- -------------------------------------------------------------
THE ONE GROUP FAMILY OF MUTUAL FUNDS DECEMBER 31, 1995
<TABLE>
<S> <C>
Report From Your Investment Advisor................................................... 2
Schedules of Portfolio Investments.................................................... 4
Statements of Assets and Liabilities.................................................. 6
Statements of Operations.............................................................. 7
Statements of Changes in Net Assets................................................... 8
Notes to Financial Statements......................................................... 9
Financial Highlights.................................................................. 12
</TABLE>
----
1
<PAGE>
- --------------------------------------------------------------------------------
Report From Your Investment Advisor
- -------------------------------------------------------------
THE ONE GROUP FAMILY OF MUTUAL FUNDS DECEMBER 31, 1995
A MESSAGE TO THE ONE GROUP SHAREHOLDERS
We are pleased to present this semiannual report for The One Group Family of
Mutual Funds. As part of our continuing efforts to provide you with exceptional
investment management and high-quality service and communication, this report
provides an overview of the financial markets and your fund's performance for
the period from July 1, 1995, to December 31, 1995.
A STELLAR YEAR FOR INVESTORS
Neither stock nor bond investors had much to complain about in 1995. Modest
economic growth coupled with declining interest rates and steady inflation
provided the backdrop for one of the most successful years in the history of the
stock and bond markets.
We are pleased to report that The One Group equity and fixed-income funds
generally provided attractive returns during the six-month period. In fact, most
of our funds surpassed their average historical returns.
AN ABOUT-FACE IN THE BOND MARKET
Rebounding from a disastrous 1994, the bond market in 1995 generated returns
that rivaled those of stocks. The 30-year Treasury bond, for example, generated
returns of 34.15% for the year and 11.95% for the six months ended December 31,
according to Ryan Labs Inc. Other fixed-income securities followed suit, posting
returns that exceeded their historical averages.
The bond market rally began early in the year. As the economy slowed to a more
sustainable growth level with minimal inflation, the Federal Reserve ended the
series of interest rate increases it had implemented during 1994 and early 1995.
Several months later, when it appeared that growth may have been slowing a bit
too much, the Fed attempted to jump-start the sluggish economy by cutting
interest rates twice--once in July and once in December. This action caused bond
yields to fall and bond prices to rise.
The yield on the five-year Treasury fell from 7.83% on December 31, 1994, to
5.97% on June 30, 1995, and to 5.37% on December 31, 1995. The 30-year Treasury
yield fell from 7.88% on December 31, 1994, to 6.62% on June 30, 1995, and to
5.95% on December 31, 1995.
TAX REFORM TALK TAMES MUNI MARKET
Municipal securities also rebounded nicely from 1994's poor showing, posting
generally attractive returns. Despite such performance, though, returns on
municipal investments fell far short of the returns enjoyed in the taxable bond
and stock markets. With several tax-reform proposals on the table--including
some that would eliminate or reduce the tax break on munis--the long-term
attractiveness of this market remains in question. This caused many investors to
take their investment dollars elsewhere during 1995.
MONEY MARKET RATES RETURN TO 'NORMAL'
The only fixed-income investors who may have been somewhat disappointed during
1995 were those invested in money market securities. After surpassing the
average returns on both stock and bond mutual funds during 1994, money market
fund performance returned to "normal" during 1995. However, this was due
primarily to the phenomenal performance rebound in the equity and fixed-income
markets and not to any dramatic mishap in the short-term fixed-income market. As
is typical of a falling interest rate environment, yields on money market
instruments fell slightly during the period.
EQUITIES SOAR TO RECORD HIGHS
In the 1995 stock market, bigger was better. Bolstered by modest economic growth
and strong profits, large, multi-national companies offered the best returns.
The Dow Jones Industrial Average, for example, soared to two milestone levels
within nine months--4,000 in February and 5,000 in November. The S&P 500 Index
also posted spectacular gains. For the six-month period ended December 31, 1995,
the S&P 500 returned 14.44%, while for the year ended December 31, 1995 its
performance reached 34.11%.
While they lagged their larger counterparts, small company stocks nevertheless
posted historically attractive returns. As measured by the Russell 2000,
small-company stocks returned 11.40% for the six-month period and 26.21% for the
year ended December 31, 1995.
KEEPING PERFORMANCE IN PERSPECTIVE
While The One Group Funds participated in the market rallies during the past
year, few of our funds outperformed their benchmark indexes. It is important to
remember that the widely-publicized
- ----
2
<PAGE>
- --------------------------------------------------------------------------------
Report From Your Investment Advisor, continued
- --------------------------------------------------------------------------------
THE ONE GROUP FAMILY OF MUTUAL FUNDS DECEMBER 31, 1995
performance of market indexes typically is not indicative of the performance of
specific mutual funds. Except for our designated "index" funds, the composition
of The One Group Funds differs significantly from the broad-based market
indexes.
On the equity side, for example, the S&P 500 is comprised primarily of stocks of
large corporations with a bias toward growth-oriented issues. Most stock funds
have holdings in medium- and small-company stocks, which did not experience the
same level of results as their larger counterparts. Neither did value stocks,
which, in general, underperformed their growth-oriented peers. Consequently,
investors with exposure to various types of stocks should compare each component
of their portfolio to the most-appropriate benchmark index.
On the fixed-income side, investors may choose from bonds with short-,
intermediate- or long-term maturities with different degrees of quality and
risk. When selecting an appropriate performance benchmark, all of these
characteristics must be considered to obtain an accurate evaluation. During
1995, bond funds with greater duration, or interest-rate risk exposure,
performed the best. The One Group fixed-income funds typically maintain a
relatively conservative risk posture, which can make them less-sensitive to
interest rate swings. While this may inhibit the funds' price appreciation when
interest rates fall, it tends to protect against price depreciation when
interest rates increase.
OUR THANKS TO YOU
Thank you for continuing to invest with The One Group Family of Mutual Funds. We
appreciate your support and confidence as we strive to help you reach your
financial goals.
Sincerely,
[DAVID J. KUNDERT SIGNATURE]
David J. Kundert
PRESIDENT & CEO,
BANC ONE INVESTMENT ADVISORS CORPORATION
[PHOTO]
----
3
<PAGE>
- --------------------------------------------------------------------------------
The One Group Family of Mutual Funds
- -------------------------------------------------------------
STATEMENTS OF ASSETS AND LIABILITIES DECEMBER 31, 1995
(Unaudited)
<TABLE>
<CAPTION>
(Amounts in Thousands,
except Per Share Amounts)
<S> <C> <C>
TREASURY
ONLY GOVERNMENT
MONEY MARKET MONEY MARKET
FUND FUND
------------ ------------
ASSETS:
Investments, at value............................................................. $ 387,795 $ 467,994
Repurchase agreements............................................................. 258,941
------------ ------------
387,795 726,935
Interest receivable............................................................... 2,397 3,973
Prepaid expenses and other assets................................................. 10 3
Deferred organization costs....................................................... 9 52
------------ ------------
Total Assets...................................................................... 390,211 730,963
------------ ------------
LIABILITIES:
Dividends payable................................................................. 1,805 3,615
Accrued expenses and other payables:
Investment advisory fees...................................................... 27 52
Administration fees........................................................... 17 32
Other......................................................................... 122 451
------------ ------------
Total Liabilities................................................................. 1,971 4,150
------------ ------------
NET ASSETS:
Capital........................................................................... 388,283 726,886
Accumulated undistributed net realized losses from investment transactions........ (43) (73)
------------ ------------
Net Assets........................................................................ $ 388,240 $ 726,813
------------ ------------
------------ ------------
Outstanding shares of beneficial interest......................................... 388,283 726,886
------------ ------------
------------ ------------
Net asset value--offering and redemption price per share.......................... $1.00 $1.00
------------ ------------
------------ ------------
Investments, at amortized cost.................................................... $ 387,795 $ 726,935
------------ ------------
------------ ------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
- ----
6
<PAGE>
- --------------------------------------------------------------------------------
The One Group Family of Mutual Funds
- -------------------------------------------------------------
STATEMENTS OF OPERATIONS FOR THE SIX MONTHS ENDED DECEMBER 31, 1995
(Unaudited)
<TABLE>
<CAPTION>
(Amounts in Thousands)
<S> <C> <C>
TREASURY ONLY GOVERNMENT
MONEY MARKET MONEY MARKET
FUND FUND
------------- ------------
INVESTMENT INCOME:
Interest income................................................................... $ 9,257 $ 21,803
------ ------------
Total Income...................................................................... 9,257 21,803
------ ------------
EXPENSES:
Investment advisory fees.......................................................... 132 297
Administration fees............................................................... 83 186
Custodian and accounting fees..................................................... 9 49
Legal and audit fees.............................................................. 32 149
Organization costs................................................................ 2 11
Trustees' fees and expenses....................................................... 4 16
Transfer agent fees............................................................... 10 18
Registration and filing fees...................................................... 25 36
Printing costs.................................................................... 11 51
Other............................................................................. 5 5
------ ------------
Total expenses before waivers/reimbursements...................................... 313 818
Less waivers/reimbursements....................................................... (5)
------ ------------
Net Expenses...................................................................... 313 813
------ ------------
Net Investment Income............................................................. 8,944 20,990
------ ------------
REALIZED GAINS (LOSSES) FROM INVESTMENTS:
Net realized gains (losses) from investment transactions.......................... (43) 1
------ ------------
Net increase in net assets resulting from operations.............................. $ 8,901 $ 20,991
------ ------------
------ ------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
----
7
<PAGE>
- --------------------------------------------------------------------------------
The One Group Family of Mutual Funds
- -------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
(Amounts in Thousands)
<S> <C> <C> <C> <C>
TREASURY ONLY GOVERNMENT MONEY
MONEY MARKET FUND MARKET FUND
---------------------- -----------------------
<CAPTION>
SIX MONTHS SIX MONTHS
ENDED YEAR ENDED
DECEMBER ENDED DECEMBER YEAR ENDED
31, JUNE 30, 31, JUNE 30,
1995 1995 1995 1995
----------- --------- ----------- ----------
<S> <C> <C> <C> <C>
(UNAUDITED) (UNAUDITED)
FROM INVESTMENT ACTIVITIES:
OPERATIONS:
Net investment income............................... $ 8,944 $ 12,746 $ 20,990 $ 38,264
Net realized gains (losses) from investment
transactions...................................... (43 ) 29 1 (66)
----------- --------- ----------- ----------
Change in net assets resulting from operations.......... 8,901 12,775 20,991 38,198
----------- --------- ----------- ----------
DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income.......................... (8,944 ) (12,746) (20,990 ) (38,264)
From net realized gains from investments............ (21 )
----------- --------- ----------- ----------
Change in net assets from shareholder distributions..... (8,965 ) (12,746) (20,990 ) (38,264)
----------- --------- ----------- ----------
CAPITAL TRANSACTIONS:
Proceeds from shares issued......................... 532,716 894,833 1,405,094 2,818,461
Dividends reinvested................................ 864 1,574 5,470 12,982
Cost of shares redeemed............................. (433,973 ) (825,464) (1,404,451 ) (2,802,931)
----------- --------- ----------- ----------
Change in net assets from share transactions............ 99,607 70,943 6,113 28,512
----------- --------- ----------- ----------
Change in net assets.................................... 99,543 70,972 6,114 28,446
NET ASSETS:
Beginning of period................................. 288,697 217,725 720,699 692,253
----------- --------- ----------- ----------
End of period....................................... $ 388,240 $ 288,697 $ 726,813 $ 720,699
----------- --------- ----------- ----------
----------- --------- ----------- ----------
SHARE TRANSACTIONS:
Issued.............................................. 532,716 894,833 1,405,094 2,818,461
Reinvested.......................................... 864 1,574 5,470 12,982
Redeemed............................................ (433,973 ) (825,464) (1,404,451 ) (2,802,931)
----------- --------- ----------- ----------
Change in shares........................................ 99,607 70,943 6,113 28,512
----------- --------- ----------- ----------
----------- --------- ----------- ----------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
- ----
8
<PAGE>
- --------------------------------------------------------------------------------
The One Group Family of Mutual Funds
TREASURY ONLY MONEY MARKET FUND
- --------------------------------------------------------------------------------
SCHEDULE OF PORTFOLIO INVESTMENTS DECEMBER 31, 1995
(Amounts in Thousands)
(Unaudited)
<TABLE>
<CAPTION>
PRINCIPAL SECURITY AMORTIZED
AMOUNT DESCRIPTION COST
- ---------- ----------------------------------------- -----------
<C> <S> <C>
U.S. Treasury Bills (59.9%):
47,458 1/11/96.................................. $ 47,405
849 1/18/96.................................. 847
44,836 1/25/96.................................. 44,676
13,635 2/1/96................................... 13,572
84,487 2/8/96................................... 84,082
7,384 2/29/96.................................. 7,320
30,096 3/7/96................................... 29,803
5,000 8/22/96.................................. 4,822
-----------
Total U.S. Treasury Bills 232,527
-----------
<CAPTION>
PRINCIPAL SECURITY AMORTIZED
AMOUNT DESCRIPTION COST
- ---------- ----------------------------------------- -----------
<C> <S> <C>
U.S. Treasury Notes (40.0%):
5,000 9.25%, 1/15/96........................... $ 5,006
70,000 4.00%, 1/31/96........................... 69,916
25,000 9.38%, 4/15/96........................... 25,282
40,000 5.50%, 4/30/96........................... 40,023
10,000 5.88%, 5/31/96........................... 10,017
5,000 6.50%, 9/30/96........................... 5,024
-----------
Total U.S. Treasury Notes 155,268
-----------
Total (Cost--$387,795)(a) $ 387,795
-----------
-----------
</TABLE>
- ------------
Percentages indicated are based on net assets of $388,240.
<TABLE>
<C> <S>
(a) Cost for federal income tax and financial reporting purposes are the same.
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
- ----
4
<PAGE>
- --------------------------------------------------------------------------------
The One Group Family of Mutual Funds
GOVERNMENT MONEY MARKET FUND
- --------------------------------------------------------------------------------
SCHEDULE OF PORTFOLIO INVESTMENTS DECEMBER 31, 1995
(Amounts in Thousands)
(Unaudited)
<TABLE>
<CAPTION>
PRINCIPAL SECURITY AMORTIZED
AMOUNT DESCRIPTION COST
- ---------- ----------------------------------------- -----------
<C> <S> <C>
U.S. Government Agencies (63.0%):
Federal Farm Credit Bank:
5,000 5.18%, 3/4/96*........................... $ 4,948
10,000 5.44%, 3/7/96............................ 9,900
10,250 6.38%, 5/1/96............................ 10,250
10,000 5.35%, 5/3/96*........................... 9,802
17,405 5.67%, 7/17/96........................... 17,394
10,000 5.53%, 10/1/96........................... 9,979
Federal Home Loan Bank:
5,240 8.10%, 3/25/96........................... 5,260
13,300 6.00%, 8/16/96........................... 13,300
20,000 5.85%, 10/25/96.......................... 20,000
Federal Home Loan Mortgage Corp.:
14,000 5.15%, 3/29/96*.......................... 13,796
10,000.... 5.08%, 5/1/96*........................... 9,803
Federal National Mortgage Assoc.:
10,000 5.66%, 1/16/96........................... 9,976
20,000 5.50%, 1/31/96........................... 19,909
10,000 5.52%, 2/13/96........................... 9,934
10,000 5.44%, 3/14/96........................... 9,890
7,230 8.00%, 7/10/96........................... 7,320
20,000 5.13%, 8/9/96*........................... 19,315
20,000 5.64%, 10/2/96........................... 19,975
20,000 5.60%, 11/1/96........................... 19,974
8,320 7.70%, 12/10/96.......................... 8,484
4,000 5.26%, 6/2/99*........................... 4,000
20,000 5.26%, 7/26/99*.......................... 20,000
10,000 5.26%, 9/22/99*.......................... 10,000
Student Loan Marketing Assoc.:
30,000 5.22%, 10/14/97*......................... 29,988
40,000 5.22%, 11/24/97*......................... 40,000
25,000 5.27%, 9/28/98*.......................... 25,000
25,000 5.24%, 11/10/98*......................... 25,000
<CAPTION>
PRINCIPAL SECURITY AMORTIZED
AMOUNT DESCRIPTION COST
- ---------- ----------------------------------------- -----------
</TABLE>
U.S. GOVERNMENT AGENCIES, CONTINUED:
Student Loan Marketing Assoc.:, continued:
<TABLE>
<C> <S> <C>
10,000 5.26%, 1/13/99*.......................... $ 10,000
10,000 5.26%, 2/8/99*........................... 10,000
25,000 5.25%, 2/22/99*.......................... 25,000
10,000 5.24%, 8/2/99*........................... 9,997
-----------
Total U.S. Government Agencies 458,194
-----------
U.S. Treasury Bills (1.3%):
10,000 5/2/96................................... 9,800
-----------
Total U.S. Treasury Bills 9,800
-----------
Total Investments, at value 467,994
-----------
Repurchase Agreements (35.6%):
50,000 Donaldson, Lufkin & Jenrette 5.85%,
1/5/96 (collateralized by 48,802
various U.S. Government securities,
0.00% - 14.25%, 1/1/96 - 5/15/18,
market value $51,000).................. 50,000
58,941 Lehman Brothers, 5.96%, 1/2/96
(collateralized by 58,941 Federal
National Mortgage Assoc., 0.00%,
7/19/96, market value $60,120)......... 58,941
150,000 Prudential Securities, Inc., 6.00%,
1/2/96 (collateralized by 150,001
various U.S. Government Securities,
0.00% - 14.25%, 1/1/96 - 8/15/25,
market value $153,001)................. 150,000
-----------
Total Repurchase Agreements........................ 258,941
-----------
Total (Cost-$726,935).............................. $ 726,935
-----------
-----------
</TABLE>
- ------------
Percentages indicated are based on net assets of $726,813.
<TABLE>
<C> <S>
(a) Cost for federal income tax and financial reporting purposes are the same.
</TABLE>
<TABLE>
<C> <S>
* Variable rate securities that have interest rates that reset weekly based on the Treasury bill equivalent yield or
other market index. The final maturity date is stated; however, the maturity date for valuation purposes is the next
reset date. The rate shown on the Schedule of Portfolio Investments is the effective rate at December 31, 1995.
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
----
5
<PAGE>
- --------------------------------------------------------------------------------
The One Group Family of Mutual Funds
- -------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 1995
(Unaudited)
1. ORGANIZATION:
The One Group (the "Trust") is registered under the Investment Company Act
of 1940, as amended (the "1940 Act"), as an open-end investment company
established as a Massachusetts business trust. The Trust is registered to
offer four classes of shares: Fiduciary, Class A, Class B, and Service. The
Trust currently consists of twenty-three funds. The accompanying financial
statements and financial highlights are those of the Treasury Only Money
Market Fund and the Government Money Market Fund (individually, a "Fund"
collectively, the "Funds") only. The Funds are diversified mutual funds and
are not offered in multiple classes.
The Trust entered into an Agreement and Plan of Reorganization (the
"Agreement") with The Paragon Portfolio ("Paragon"), a Massachusetts
business trust. The Agreement contemplates the transfer of all of the assets
and liabilities of each Paragon Fund in exchange for shares of the
corresponding One Group Fund. The Trustees of Paragon intend to seek
approval of the Agreement at a special shareholder meeting to be held March
25, 1996.
2. SIGNIFICANT ACCOUNTING POLICIES:
The following is a summary of significant accounting policies followed by
the Trust in preparation of its financial statements. The policies are in
conformity with generally accepted accounting principles.
SECURITY VALUATION
Securities are valued utilizing the amortized cost method permitted in
accordance with Rule 2a-7 under the 1940 Act. Under the amortized cost
method, discount or premium is amortized on a constant basis to the
maturity of the security. In addition, the Funds may not (a) purchase any
instrument with a remaining maturity greater than thirteen months unless
such instrument is subject to a demand feature, or (b) maintain a
dollar-weighted-average maturity which exceeds 90 days.
REPURCHASE AGREEMENTS
The Funds may invest in repurchase agreements with institutions that the
Fund's investment adviser has determined are creditworthy. Each repurchase
agreement is recorded at cost. The Fund requires that the securities
purchased in a repurchase transaction be transferred to the custodian in a
manner sufficient to enable the Fund to obtain those securities in the
event of a counterparty default. The seller, under the repurchase
agreement, is required to maintain the value of the securities held at not
less than the repurchase price, including accrued interest.
SECURITY TRANSACTIONS AND RELATED INCOME
Security transactions are accounted for on a trade date basis. Net realized
gains or losses on sales of securities are determined on the specific
identification cost method. Interest income and expenses are recognized on
the accrual basis. Interest income, including any discount or premium, is
accrued as earned using the effective interest method.
SECURITIES LENDING
To generate additional income, the Funds may lend up to 33% of securities
in which they are invested pursuant to agreements requiring that the loan
be continuously secured by cash, U.S. Government or U.S. Government Agency
securities, shares of an investment trust or mutual fund, or any
combination of cash and such securities as collateral equal at all times to
at least 100% of the market value plus accrued interest on the securities
lent. The Funds continue to earn interest on securities lent while
simultaneously seeking to earn interest on the investment of collateral.
Collateral is marked to market daily to provide a level of collateral at
CONTINUED
----
9
<PAGE>
- --------------------------------------------------------------------------------
The One Group Family of Mutual Funds
- -------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS, CONTINUED DECEMBER 31, 1995
(Unaudited)
least equal to the market value of securities lent. There may be risks of
delay in recovery of the securities or even loss of rights in the
collateral should the borrower of the securities fail financially. However,
loans will be made only to borrowers deemed by the Adviser to be of good
standing and credit worthy under guidelines established by the Board of
Trustees and when, in the judgment of the Adviser, the consideration which
can be earned currently from such securities loans justifies the attendant
risk. Loans are subject to termination by the Funds or the borrower at any
time, and are, therefore, not considered to be illiquid investments. As of
December 31, 1995, the Funds had no securities on loan.
EXPENSES
Expenses directly attributable to a Fund are charged directly to that Fund,
while the expenses which are attributable to more than one fund of the
Trust are allocated among the respective Funds.
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS
Dividends from net investment income are declared daily and paid monthly.
Net income for this purpose consists of interest accrued and discount
earned (including both original issue discount and market discount) less
amortization of any market premium and accrued expenses. Net realized
capital gains, if any, are distributed at least annually.
Distributions from net investment income and from net capital gains are
determined in accordance with income tax regulations which may differ from
generally accepted accounting principles. These differences are primarily
due to differing treatments for expiring capital loss carryforwards and
deferrals of certain losses. Permanent book and tax basis differences,
which affect shareholder distributions, have been reclassified to
additional paid-in capital.
ORGANIZATION COSTS
Costs incurred by the Trust in connection with its organization, including
the fees and expenses of registering and qualifying its shares for
distribution have been deferred and are being amortized using the
straight-line method over a period of five years beginning with the
commencement of each Fund's operations. All such costs, which are
attributable to more than one fund, have been allocated among the Funds of
the Trust pro-rata, based on the relative net assets of each Fund. In the
event that any of the initial shares are redeemed during such period by any
holder thereof, the related Fund will be reimbursed by such holder for any
unamortized organization costs in the proportion as the number of initial
shares being redeemed bears to the number of initial shares outstanding at
the time of redemption.
FEDERAL INCOME TAXES
Each Fund intends to continue to qualify as a regulated investment company
by complying with the provisions available to certain investment companies
as defined in applicable sections of the Internal Revenue Code, and to make
distributions from net investment income and from net realized capital
gains sufficient to relieve it from all, or substantially all, federal
income taxes.
ESTIMATES
The preparation of financial statements requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities at the date of the financial statements and the reported
amounts of income and expenses for the period. Actual results could differ
from those estimates.
CONTINUED
- ----
10
<PAGE>
- --------------------------------------------------------------------------------
The One Group Family of Mutual Funds
- -------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS, CONTINUED DECEMBER 31, 1995
(Unaudited)
3. SHARES OF BENEFICIAL INTEREST:
The Trust has an unlimited number of shares of beneficial interest, with no
par value which may, without shareholder approval, be divided into an
unlimited number of series of such shares and any series may be classified
or reclassified into one or more classes. Currently, shares of the Trust are
registered to be offered through twenty-nine series and four classes:
Fiduciary, Class A, Class B and Service. Shareholders are entitled to one
vote for each full share held and will vote in the aggregate and not by
class or series, except as otherwise expressly required by law or when the
Board of Trustees has determined that the matter to be voted on affects only
the interest of shareholders of a particular class or series.
4. INVESTMENT ADVISORY AND ADMINISTRATION AGREEMENTS:
The Trust and Banc One Investment Advisors Corporation (the "Adviser") are
parties to an investment advisory agreement under which the Adviser is
entitled to receive an annual fee, computed daily and paid monthly, equal to
0.08% of the average daily net assets of each Fund.
The Trust and One Group Services Company (the "Administrator"), a
wholly-owned subsidiary of The BISYS Group, Inc., are parties to an
administration agreement under which the Administrator provides services for
a fee that is computed daily and payable monthly at an annual rate of 0.05%
of each Fund's average daily net assets. The Adviser also serves as
Sub-Administrator to each fund of the Trust, pursuant to an agreement
between the Administrator and the Adviser. Pursuant to this agreement, the
Adviser performs many of the Administrator's duties, for which the Adviser
receives a fee paid by the Administrator. Prior to November 30, 1995, The
Shareholder Services Group d/b/a 440 Financial served as administrator of
each Fund under essentially the same terms as the current administration
agreement.
The One Group Services Company (the "Distributor") and the Trust are parties
to a distribution agreement under which shares of the Funds are sold on a
continuous basis. No compensation is paid to the Distributor for
distribution services for the Funds.
Certain officers of the Trust are affiliated with the Adviser or the
Administrator. Such officers receive no compensation from the Funds for
serving in their respective roles.
The Adviser and the Administrator have voluntarily agreed to waive a portion
of their fees and to reimburse the Funds for certain expenses so that total
expenses of each Fund would not exceed certain annual expense limitations.
For the six months ended December 31, 1995, fees in the following amounts
were waived or reimbursed to the Funds (amounts in thousands):
<TABLE>
<CAPTION>
GOVERNMENT
MONEY MARKET
FUND
---------------
<S> <C>
INVESTMENT ADVISORY FEES:
Voluntary fee reductions....................................................... $ 5
</TABLE>
CONTINUED
----
11
<PAGE>
- --------------------------------------------------------------------------------
The One Group Family of Mutual Funds
- -------------------------------------------------------------
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
TREASURY ONLY MONEY MARKET FUND
----------------------------------------------------
FOR THE YEAR ENDED
JUNE 30, APRIL 16, 1993
------------------ TO
1995 1994 JUNE 30, 1993 (A)
FOR THE SIX -------- -------- -----------------
MONTHS ENDED
DECEMBER 31,
1995
------------
(UNAUDITED)
<S> <C> <C> <C> <C>
NET ASSET VALUE,
BEGINNING OF PERIOD....................................... $ 1.000 $ 1.000 $ 1.000 $ 1.000
------------ -------- -------- -------
Investment Activities
Net investment income..................................... 0.030 0.051 0.032 0.006
------------ -------- -------- -------
Distributions
Net investment income..................................... (0.030) (0.051) (0.032) (0.006)
------------ -------- -------- -------
NET ASSET VALUE,
END OF PERIOD............................................. $ 1.000 $ 1.000 $ 1.000 $ 1.000
------------ -------- -------- -------
------------ -------- -------- -------
Total Return................................................ 2.76%(c) 5.22% 3.23% 2.96%(b)
RATIOS/SUPPLEMENTARY DATA:
Net Assets at end of period (000)......................... $388,240 $288,697 $217,725 $60,330
Ratio of expenses to average net assets................... 0.19%(b) 0.20% 0.15% 0.07%(b)
Ratio of net investment income to average net assets...... 5.42%(b) 5.14% 3.23% 2.95%(b)
Ratio of expenses to average net assets*.................. 0.19%(b) 0.21% 0.22% 0.33%(b)
Ratio of net investment income to average net assets*..... 5.42%(b) 5.13% 3.16% 2.69%(b)
</TABLE>
- ------------
<TABLE>
<C> <S>
* During the period, certain fees were voluntarily reduced. If such voluntary fee reductions had not occurred, the ratios
would have been as indicated.
</TABLE>
<TABLE>
<C> <S>
(a) Period from commencement of operations.
</TABLE>
<TABLE>
<C> <S>
(b) Annualized.
</TABLE>
<TABLE>
<C> <S>
(c) Not annualized.
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
- ----
12
<PAGE>
- --------------------------------------------------------------------------------
The One Group Family of Mutual Funds
- -------------------------------------------------------------
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
GOVERNMENT MONEY MARKET FUND
----------------------------------------------------
FOR THE YEAR ENDED
JUNE 30, JUNE 14, 1993
------------------ TO
1995 1994 JUNE 30, 1993 (A)
FOR THE SIX -------- -------- -----------------
MONTHS ENDED
DECEMBER 31,
1995
------------
(UNAUDITED)
<S> <C> <C> <C> <C>
NET ASSET VALUE,
BEGINNING OF PERIOD....................................... $ 1.000 $ 1.000 $ 1.000 $ 1.000
------------ -------- -------- --------
Investment Activities
Net investment income..................................... 0.030 0.053 0.033 0.001
------------ -------- -------- --------
Distributions
Net investment income..................................... (0.030) (0.053) (0.033) (0.001)
------------ -------- -------- --------
NET ASSET VALUE,
END OF PERIOD............................................. $ 1.000 $ 1.000 $ 1.000 $ 1.000
------------ -------- -------- --------
------------ -------- -------- --------
Total Return................................................ 2.88%(c) 5.41% 3.40% 3.28%(b)
RATIOS/SUPPLEMENTARY DATA:
Net Assets at end of period (000)......................... $726,813 $720,699 $692,253 $244,991
Ratio of expenses to average net assets................... 0.22%(b) 0.21% 0.11% 0.07%(b)
Ratio of net investment income to average net assets...... 5.65%(b) 5.28% 3.41% 3.13%(b)
Ratio of expenses to average net assets*.................. 0.22%(b) 0.22% 0.20% 0.33%(b)
Ratio of net investment income to average net assets*..... 5.65%(b) 5.27% 3.32% 2.87%(b)
</TABLE>
- ------------
<TABLE>
<C> <S>
* During the period, certain fees were voluntarily reduced. If such voluntary fee reductions had not occurred, the ratios
would have been as indicated.
</TABLE>
<TABLE>
<C> <S>
(a) Period from commencement of operations.
</TABLE>
<TABLE>
<C> <S>
(b) Annualized.
</TABLE>
<TABLE>
<C> <S>
(c) Not annualized.
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
----
13
<PAGE>
Important Customer Information. Please Read:
Shares of The One Group:
- - are not deposits or obligations of, or guaranteed by BANC ONE CORPORATION or
its bank or non- bank affiliates,
- - are not insured or guaranteed by the FDIC or by any other governmental agency
or government sponsored agency of the federal government or any state,
- - are subject to investment risks, including possible loss of the principal
amount invested.
Banc One Investment Advisors Corporation, a registered investment advisor and an
indirect subsidiary of BANC ONE CORPORATION, serves as an investment advisor to
The One Group, for which it receives advisory fees. The One Group is distributed
by The One Group Services Company, 3435 Stelzer Road, Columbus, Ohio 43219,
which is not affiliated with BANC ONE CORPORATION and is not a bank.
For more complete information on any of The One Group Funds, including
management fees and expenses, you may obtain a prospectus from The One Group
Services Company. Read the prospectus carefully before investing.
THE COMPOSITION OF EACH FUND'S HOLDINGS IS SUBJECT TO CHANGE.
THIS MATERIAL MUST BE ACCOMPANIED OR PRECEDED BY A PROSPECTUS.
THE PERFORMANCE DATA QUOTED REPRESENTS PAST PERFORMANCE AND IS NOT AN INDICATION
OF FUTURE RESULTS. AN INVESTMENT IN THE MONEY MARKET FUNDS IS NEITHER INSURED
NOR GUARANTEED BY THE U.S. GOVERNMENT. YIELDS WILL FLUCTUATE AND THERE CAN BE NO
ASSURANCE THAT THE FUNDS WILL BE ABLE TO MAINTAIN A STABLE NAV OF $1.00 PER
SHARE.
<TABLE>
<S> <C>
TOG-F-039 [THE ONE GROUP LOGO]
</TABLE>
<PAGE>
(This page has been left blank intentionally)
